The New Goldrush: Domain Names
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The New Goldrush: Domain Names


There’s a gold rush going on. Get ya some of that! I was recently running on my treadmill — because
it’s the middle of winter here in Seattle and there’s snow on the ground — and I had
this brainstorm, so I’m going to share it. Maybe the night before I was watching Gold
Rush, the television program on the Discovery Channel, so it was stuck in my head. I’m not sure. But here goes. Two types of domain name investors:
1. Prospectors
2. Miners Mis-classsifying yourself as either of them
will leave you unsatisfied, unfulfilled, unhappy, and — most importantly — without money in
your pocket. Prospectors go out looking for the rich veins
of gold to turn into gold mines. They’re searching, looking for changes in
rock formations, exploring, putting their money in harms way packing up their tools,
mule and heading out into the great outdoors looking for gold. The miners are the people that came in once
the prospectors had found something. They’re the people that worked from sun-up
until sun-down, digging holes, looking for bedroock, and separating the gold from the
ground. How well they did, how much gold they put
in their pocket, was a function of how efficient their processes were. Heck, if they could have used automated sluice
boxes like miners do today instead of having to pan for gold, they could have increased
their throughput by 1,000 — 10,000 times an hour. Now in domain name investing, you have the
same type of situation. Domain name prospectors are the ones looking
for opportunities. They’re following the trends and act faster
than anyone else. They find an opportunity, maybe drones, recreational
marijuana, autonomous cars. Maybe it’s in established and upwardly trending
areas like three letter .coms, or four leter CVCV brandable domains. Often, prospectors will go to each website,
look to see if the website is outdated or not operational, and they contact the owner
to make an offer. Prospectors LOVE it when they get a bounce-back
email because that’s opportunity. Lots of other prospectors likely sent emails
and then walked away when they got a bounce-back. But real prospectors find another email. Or they get on the phone and call. And they follow-up and they follow-up and
they follow-up. And they negotiate. And they buy the domain name for under market
value. The person selling the domain is totally happy
because they likely bought it for $10, probably paid $160 in renewal fees 16 years, and maybe
they’re making 10, 20, 50 times their investment in that domain name. Plus, maybe they just want to be done running
their website. They want to move on and put some cash in
their pocket. That’s the prospector. They find that rich vein of valuable domains. They buy low. They turn around and flip them because they
know the market. They know there are miners that want to do
the work, and the prospectors are in it for the thrill of the chase, the glory of the
acquisition, and the fast cash in their pocket for the quick flip. So let’s talk about the miners. The person who does the work, day in and day
out. Looks at the drop lists because they already
prospected and know what they’re looking for. Gets in the auctions, does the research to
determine the number of companies that might be willing to buy it, does a ton of outreach,
over and over again by emailing, by calling, by letter writing, does the negotiation, doesn’t
take NO for an answer. Gets in there everyday and hustles. Yes, the miner may buy the domain name from
a prospector at a higher rate than the prospector paid, but they know they can put in the work
and sell it for 5 or 10 times what they paid for it given time and proper marketing. Now, you can have domain investors that get
in there and do both prospecting and mining. It might be a little more work. Might take a little more time to find an area,
segment, industry, focus where the domain name values are high. By doing both, they maximize their return
on investment. And that might take time. It might take money. Do you think the prospectors went out every
day and found gold every time they dug a hole? No. And they’re spending money by digging that
hole that might have been a mistake. You’re spending money by buying a domain name
that might have been a mistake, and later realize that it doesn’t have any resale value. There are things that prospectors do to minimize
digging holes where there isn’t any gold. The same thing is true for domain names. What makes a gold rush? People rushing to do something. Where people can find gold, they have an opportunity
to make a lot of money based on their knowledge, investment, time and energy. More than 100,000 domain names expire every
day and go to auction or are simply just dropped and available to register by the fastest fingers
or computers. Just today, the day I filmed this, I picked
up a single word surname used by 300,000 people in the United States and hundreds of companies. It was a 1989 registration, with only one
owner. If you’re into collectible cars, that’s a
barn find like you’ve never seen before. So the first gold rush was actual gold. The second gold rush was physical real estate,
and it continues today. And the third gold rush — that nobody understands
outside this industry — is internet real estate. And I’ll leave you with this: knowing yourself,
what you like, what you’re good at, will help you be more fulfilled as you’re determining
your area of specialization, and whether you want to be a domain name prospector, a miner
or both.

4 Comments

  • H W Glascock

    Great analogy, Michael! I' really enjoy watching The Gold Rush Show on Discovery Channel. I'd like to develop more insight into the approach, tools and study habits necessary to be either a successful prospector or miner. First the archetype person. Would you agree that Ali Zandi is more of a miner than a prospector? I would have thought so until he mentioned going after 'catch phrase' domain names during one of your interviews.
    Anyway, there should be a way to set up a check list for prospecting and another one for mining.
    Domain Name Prospecting seems to be more time intensive but possibly less capital intensive.
    I hope you go into more detail on this in future videos and thanks for your informative video series!

  • Nina Adams

    Great video, i did some researching and one of my domain names – I found it kinda being used in Australia on a toy box. … from the 90's- I almost resold it, but I changed my mind… cause the registrar company said if they didn't get the domain name for it yet. … I'm okay… Question for you! Should I get a registered domain name ""trademarked"" even if i know I'm going to sell it , eventually ???? Does that add more value ???

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