I have been floating the idea of dabbling in the domain game. As I discuss domaining with fellow entrepreneurs I get the usual talk, it is hyper competitive, all the low hanging fruit is gone…blah. This is a common question many entrepreneurs face when trying to find an industry or idea to attack next, is it too late to in get in?
The majority of entrepreneurs most likely wouldn’t want to tackle the search engine industry. Who would want to compete against Google? If Sergy and Larry had this mindset about Yahoo in the 90’s we wouldn’t have Google. I know the counter argument, for every Google there are 1,000 failed attempts. But what fun is that?
I just read an article about Frank Shilling on DN Journal. If you don’t know Frank, then get ready for a great story. The short version is about a German immigrant in Canada read about the money that could be made selling domains. He got into the domain game 2002, not 1997. Frank was told not to waste his time. All the good domains were gone and the industry was super competitive. So where did Frank end up?
Frank now owns a small company called Name Administration Inc. that has $20 million a year in revenue all from his domain portfolio, and that revenue is not from selling domains. Read Frank’s blog, Seven Mile, if you get a chance.
So the big question is, is it too late to get in?
Honestly, having read the article as well,I think you should just ask Mr. Shilling yourself. He’ll probably give you an insightful answer.
Comment by Dave P — December 20, 2007 @ 4:28 pm
Probably only too late for some who don’t have the capital.
Comment by Andrew — December 20, 2007 @ 11:32 pm
Hi Tyler,
It’s never too late — but it’s too late to repeat the approach that worked in the past. For example, I got a gaggle of great names for free in 1993 (bar.com, place.com, television.com, etc.). That approach worked great for me, but it won’t work for you because the names are way expensive and your ROI will be crummy.
Frank vacuumed up a bunch of names that were super undervalued (because he figured out that parked names could cashflow). That approach worked great for him, but it won’t work now because domain names are priced to reflect that cashflow so again your ROI will be crummy.
So you have to figure out the *next* thing to do with domains. Something that hasn’t already been figured out, and factored into the domain price. Based on your insight, buy a bunch of domains really cheap, wait for the market to figure out what you already did. That will be the approach that will work great for you.
Comment by Mike O'Connor — January 4, 2008 @ 2:03 pm