Shane Warne is an Australian domainer/developer with a great portfolio of domains, and in the interview below, he was kind enough to share some gems of wisdom from his years of experience buying, selling and developing domains. A partial list of his domains, and additional background information on Shane, can be found on his main site at Labyrinth.com.
Your Labyrinth.com site says you’re a “Programmer\Developer….sometimes.” Do you work full time on internet-related ventures? Roughly what percent of your time is spent “domaining”?
I had to put “Programmer\Developer” in the description, because there wasn’t enough room to write, “One of those lazy, good-for-nothing squatters who uses money to steal generic names from deluded people in the future who believe they’re entitled to them.” 🙂
Seriously, though, a healthy portion of profits come from the proceeds of domain sales. This was never the original intention. I used to buy names for personal use, so would completely ignore purchasing enquiries. However, at some point, I realized that I could take the profits and use them to buy better names than the ones I had.
I haven’t worked on full-time development projects for ages. I’m working on a couple of esoteric, realtime, graphics-related projects in the background that I’m pretty excited about, but if the expression on my other half’s face was anything to go by, no one else would be, so I’ll spare you.
In regards to the amount of time I spend domaining: I spend about an hour each day monitoring the market, and that’s usually enough. When I first started, I spent a lot more. I received my first decent introduction to the world of domains by reading the material on “eRealEstate.com,” and I’m really grateful for that.
On domains, you seem to go for quality over quantity, with the WHOIS showing you owning just over 100 domains, but the domains are great ones, such as Ales.com, Stews.com, Postpone.com, and XXZ.com. What is your domaining strategy? Are you a net buyer or seller?
People with large portfolios have much more information upon which to base their decisions, which would definitely give them an advantage, but I’m more comfortable owning fewer names. Like many others, I built the portfolio I have with the proceeds of domain sales, via the “trading up” method. It’s a simple, but effective, strategy. I’m not looking to increase my portfolio size.
I’ve learned over time to identify a so-called, good purchasing opportunity, so I try to keep cash on hand for the rare times when it happens. I’ve found – through trial-and-error – that I prefer to keep an amount of cash equal to the reseller cost of my portfolio. Dropping below that threshold makes me nervous.
Technically speaking, I like shortish dot-coms with higher exact match stats, preferably aged. I know people argue the merits of using domain statistics, but I have to go with the figures I have on hand, and those types of names seem to perform best for me. I’ve consistently noticed a linear relation – albeit, a loose one – between exact-match stats and intrinsic visitor numbers. That, in turn, usually converts to higher enquiry numbers, parking, and ultimately turnover. I remember Acro mentioning that positive meaning matters too, and I can testify to that also. “Stagnant.com” sounds pretty good stats-wise, yet stagnates on fewer than 2 UVs a day. I really dislike that name. 🙂
Liquidity is almost mandatory for me. End user sales, and better yet, development success is great, but if that doesn’t pan out (and it often doesn’t), then it’s nice to be able to liquidate and reinvest. However, even so-called liquid names take time to liquidate. Liquid domain assets are definitely not as liquid as money.
Do you actively market your domains for sale, or do you take the sit-back-and-wait approach?
I’ve never approached a buyer, but that’s not necessarily a good thing. It’s just not my style. However, I at least list my names for sale on various market places. Sedo, GoDaddy, DNS, “4.cn”, etc, are all just potential revenue streams to me. All have their merits, and all have made me money, so I don’t favor one over the other.
You recently bought Weights.com from another domainer/developer, Eric Borgos. What’s your plan?
Like everyone else, I’m a fan of Mr Borgos. His development of the “Bored.com” network, and consequent sale, is pretty inspiring.
“Weights.com” wouldn’t appeal to every domainer, but it’s pretty close to the perfect name for me. Back in my mid to late teens, I used to race BMX, and attented the World Titles a couple of times. I did really well at my first one, then spent most of my time the following year bragging about it to the girls at my local BMX track when I should have been training. I bombed out at the next. Anyway, lifting weights were a huge part of the training process, and weights have been a big part of my life ever since.
For now, at least, my plans for the name are pretty simple. I know a lot of people in the industry, so I’m going to put up a basic site, write a few articles, then make some extra friends via email – One of the benefits associated with owning a fancy domain name is getting your emails answered. The end goal is obviously monetization. I have a few friends already making money in this area, so that should help.
If nothing else, I’m hoping when one of the authors on this particular site does his “Update On The Top 10 Sales From A Year Ago” list – several months from now – that there’s not a picture of a parked page. 🙂
Bonus Question: If you had one (or more) piece(s) of advice to give to new domainers, what would it be?
It’s difficult to give advice without sounding condescending, but I’ll give it a go:
One of the first things I’d suggest is to go to DnJournal and read about some of the featured domainers in the archives: Their stories are pretty inspiring. The pure-play domainers among them also happen to be the people you should be learning from.
This one’s common sense, but monitor as much of the domain market as you can every single day: On an average day, at the very least, I’ll check through the pre-orders, pending-deletes, etc, on NameJet and Snapnames, then I’ll check the auction boards at GoDaddy and Sedo. I’ll also usually check any new BIN listings for various categories at a bunch of marketplaces. Flippa is increasingly becoming a great source for premium names, so I’ll check there too.
The chance that you’ll come across a so-called “sure thing” is pretty low, but if you scan thousands of names on a daily basis, enter lots of auctions (entry is essentially free), that chance goes up. By “sure thing,” I mean something you can purchase and turn around for a quick profit, or sell to an end-user for a healthy profit. For example, there was a $3k “LLL.com” on Sedo not too long ago, and I still see the occasional, mediocre “CVCV.com” for $500. My best deals always seem to come up when I’ve just about fallen asleep from domain search boredom.
This one’s common sense also: Don’t spend money on a name, unless you’re prepared to lose it.
It’s possible to gain a decent understanding of the market pretty quickly, but there are some things that require a few years. For instance, understanding how often a particular kind of name comes onto the market at a particular price point can take a while.
Partners, casual acquaintances, friends, etc, can be a really objective domain evaluation tool. Most don’t care about names, so if I mention one I own, and get back more than a blank stare, I know I might have something. Your bank account is the most objective domain evaluation tool of all.
A lot of people say you should buy names that evoke desire, and I agree. A name that elicits an emotional response can be good too.
Lastly – and this is just a personal opinion, I believe every domainer, whether they’re starting out or otherwise, should buy at least one domain they’re genuinely proud of.
OK, one more for the road: Don’t spend you and your partners holiday money on a domain name without consulting them, even if it’s an “NNN.com” going for a killer bargain. I know this, um, guy who did it once, and his girlfriend didn’t appreciate it. Having said that, I heard he regretted nothing. 🙂
Thanks again to Shane for generously sharing his experiences and expertise. If you have a question for him or just want to say thanks, please leave a comment below. If one of his domains catches your eye, reach out to him via the contact information on his Labyrinth.com site.