Startup Monday: Domains and Startups

I’ve been doing Startup Monday for a while now and thought it was time to discuss domains and Startups as I think this will be an increasingly hot topic. The first thing to understand, which shouldn’t come as much of a surprise is that Domainers and Startup Companies view domain names differently. Now I’m not saying they completely disagree on the topic of domains, both sides see value, there’s just a different view on where that value lies.

Let’s talk about Domainers first. I think that as Domainers most of us feel that to own your brand online you need to have the .COM. This doesn’t mean you can’t build a brand on a .NET or a .ORG, many successful brands have been build on these TLDs. However, if you look at successful companies, while they may start on another TLD, they eventually buy the .COM. A good example here is, a company that started on the brand and then bought in April of this year for $70,000.

I think most Startups agree that having a great .COM would be ideal…but most also know that their brand name .COM (or the exact match of the niche they’re targeting) is probably taken and out of their price range. Many Startups are so busy building their product, reaching out to investors, hiring new team-members, that they don’t have time to email domain owners to see if a name’s for sale and then go through the negotiation process. In many cases, when getting started they want to quickest path and opt for registering names often in other TLDs. I’ve seen TLDs like .IO used by Startups that still want to have their keywords and don’t care as much about the TLD.

Now I think there is a middle ground. In talking with Startups at a few conferences and events this year it seems like there is an interest in names between $2,500 – $25,000. The problem is, in so many cases Startups that do email someone about a name end-up emailing someone who wants six-figures for their name. The experience may turn them away from making offers on domains or assume that names they would want are out of their price range. It’s not that there’s a problem with Domainers, there’s no reason you should sell a name that’s worth six-figures for less than it’s worth. For Startups there has to be an understanding of Domain Name Value, how much a domain name is really worth, fair market value.

Of course this is where the major challenge comes in. The value of a domain name really depends on the buyer and how much it’s worth to them. Since domain owners know this, if they have a truly phenomenal domains, they’ll wait until the right buyer comes along. At the same time Startup companies should do some research on how much domains cost and pick a great domain that is in their price range. If they have a budget of $15,000 for a domain and their top-choice is taken it doesn’t mean hand-registering a name is the next best choice. It may just mean finding a name that is in your price range and still allows you to get the incredible value of having a good domain name for your business.

Here’s the problem that I see. Right now Startups and Domainers don’t connect at all, yet they both have so much synergy. Startups looking for great domain names don’t attend domain name conferences. Domainers that have great brandable domains don’t attend Startup Conferences. There has to be a way to help connect the two worlds. Sure Startups interact with Domainers through domain marketplaces but in many cases they never get to know each other, it’s a very cold and impersonal process.

These are still the early days of the Domain Industry. I think we’ll find over the years that our connection with real end users, with businesses looking for good domains for their brands, will help to grow our space. Right now we spend a lot of time with each other when the customer is out there, creating great things and looking for a great domain for their brand.

My point here is simple – the Domain Industry is almost completely unknown to Startups, heck to most people! It is our job to spread the word and let people know about the space. Let them know that we’re not just a group of Trademark and Typo-Squatters, that many of us own great brands, strong domains that could be instrumental in a Startup branding it’s business. The opportunity is huge for both Domainers and Startups, let’s connect the dots and work together!

Morgan Linton

Morgan Linton