Domains Are a Tailwind

Jul 23 2011

It’s a quote that LS Morgan wrote in the comment section of TheDomains and I don’t think I’ve ever heard a better one line description of the value of domains.

The true value of a domain is not in the domain itself but rather the added value to the business or entity you are trying to promote.  The reason an end user purchases a domain is to increase the effectiveness of the entity behind the domain.  A domain can be bought and resold but the transactions are all based on the fact that someday somebody is going to use that to monetize or draw awareness in a way that is superior to other domains.  Most domains on their own will not get you the land of great riches but it’s going to give you some tailwind.

One of my biggest criticism of domain investors is I think too many have their business model backwards.  They buy a domain and then build a business on it.  This may work for the top “category killer” domains that can stand on their own but in most cases I think it’s better to build your business and then find the best domain you can.  A great domain without a good business behind is valued on opportunity. An opportunity to gain tailwind. If you have a good business plan you can still make money with a lesser quality name.  But add a great domain and you have an opportunity that no other company will have because you own the best name in the category.

Perhaps I am business first then domains because I am a brick and mortar guy.  I get criticized all the time for thinking I’m better than online business owners and that is absolutely not true.  I merely point out that the skills of owning a brick and mortar business can easily translate to online but not always the same in reverse. I think understanding how to effectively use a domain to build an online business gives me an advantage over many “land based” owners.  Apps, Facebook, and Twitter are wonderful complementary online presences but the home base of their domain will always be a critical part of how and where people find them.  There are so many challenges in building an online presence that the tailwind of the perfect domain is something all businesses could use.

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Outsmarting the Dumb, Outworking the Smart

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  1. Troy

    How many “big” domainers can we count that have created successful businesses on major premium domains? I am not talking about businesses that cater to other domainers like Latona used to do, I am talking about a nationwide business that has seen great success?

    Two I can think of are and

    Can anyone else think of other examples?

    Many domainers are really prideful in many ways. They have this idea that 90% of the success of an online business is in the domain name and 10% is in the business plan. Truth of the matter is at least 90% is in the business plan and at most 10% is in the domain, no matter how loud Rick S shouts at times.

    Lets be honest here. The most successful domain “investors” are salesmen, nothing more and nothing less. Being a salesman can be a great way to make money and live in the world, but you won’t change the world as a salesman, only innovators change the world. Domainer’s are not innovators. They wan’t nothing to change online, but the truth is things have changed, are changing and will change more in the future.

    Online one thing is valuable… the speed of thought.

    In 1995 the Rick Schwartz’s of the world had the speed of thought on their side. They saw where the internet was going before anyone else did and it made them rich. In 2011 Rick Schwartz no longer has the speed of thought on his side, the internet is changing and it will leave him and his domains behind. Rick knows this, they both do. That is why domains are being sold now that have been held for years.

    A good domain will never be priceless, but it will certainly go down in value over the next few years as they bring fewer and fewer type ins and have a smaller influence on branding.

    I know this comment started as one thought and moved to another… the only thread holding the two ideas together is that the average domainer today (averagely successful) has no idea how to make money online but they think for some reason that they are holding all the cards with their “premium” domains. When the flips stop being so easy (as I am finding) it will be time to shit or get off the pot. Either build something innovative or shut up, but stop telling the rest of the world that they don’t “get it”.

    I am not comparing the “average” domainer to you Shane. I think you are much smarter than that.

  2. RH

    Troy your comment was better than the article, (no offense Shane) that was one of the best written on a domain blog. Again IMO

  3. Pingback: Guest Post: How Many Successful Domainers Have Created Successful Businesses? | Domain Shane

  4. Michael Cyger

    Great article and comments.

    It’s true that great domainers are great salespeople. But the same is true for any industry. When I was in corporate America, the people who climbed the ladder the fastest were the ones who could “sell” an idea, tactic or strategy. Sales is a critical aspect of being successful in any industry.

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