Morning Folks!!
So now everyone can clearly see that valuating domains by ppc earnings was silly at best. There was NEVER any correlation though many correlated them anyway. Made no sense then and I wrote about it time and time again. Now it is clear what I meant.
So if you bought a domain on a flawed equation, you have to recalibrate that and find something to base it on that is constant. Or at least in tune with reality.
So folks always ask how do you valuate a domain name? My answer is always at a bare minimum, compare to real world costs. That is a basis. That is a starting point. That is a foundation. That is before you even get to the domain name itself. It does not matter what the domain is, if somebody else wants it, it has value and ost sell way short of what the buyer is willing to pay.
After 15 years of being told I am wrong on everything up and down the line let’s start by saying it was just not understood. Or it was just a little early for the masses to get their heads around. Or maybe I was just right all along and had to be patient for 20 years for everyone to clearly see it.
You decide to open a small store in your town. Every town has different rents and housing prices. If you have prime domains then compare to prime retail space in a big city. If it is off the beaten path, then find out what rents are in a more rural area.
So rent is only the FIRST basis. Then you need at least one employee besides yourself. Even if part time. So let’s say 20 hours a week. You need insurance. You need electric. You need garbage pickup. You’ll need a burglar alarm. You will need to buy shelves and decorate the space so it is useable. You may even have to buy inventory to put on those shelves. (Pictures are much cheaper)
You will need a cleaning service. You will need lots of other “Stuff” that all costs money. Permits, fees, taxes, inspectors, where does it stop?
So a domain is only worth the idea behind the offer. Small idea, small price. Big idea, big price. So while everyone is looking a million ways to valuation, to me, this is where you start. This direction. The discussion.
In “The Social Network” there were some really good scenes. But one I like was the story about 14 trout or one gigantic fish and which one do you get your picture taken with or something like that. With the exception of the “Sting” and the “Cuckoos Nest” and maybe a handful of others, I don’t go to see a movie twice. I will for this one. The trick is to get into the minds of those watching and be a part of their dream.
When I grew up you went to Harvard to become a Doctor or a Lawyer. Are those days over? I believe they are to the degree that the website dream is in forefront of all their other dreams and ambitions. I believe this movie changes the game.
Today, no matter where you are going to school and in nearly every sector, these folks are all thinking what they can develop on the web that will revolutionize their industry, their hobby, their product and they can make a lot of money. This movie not only reinforces that, it gives you a pathway to get there even if it is a loose outline.
The movie the Social Network is simple and powerful. Everything starts with a domain name. And when you get big, it is okay to buy the better domain.
Have a GREAT Day!
Rick Schwartz
Shane
It’s always been about the business behind the domain. The domain just makes it a better package
Shay
Haven’t had time to see the movie yet but I’ve been waiting some time and believe it will have some impact on a lot of people who do see it. Anyway, always interesting to read how you analyze and create an analogy for things. Sometimes a bit of a riddle but makes sense most of the times.
Arbel Arif
Thank You, I will go to see the movie.
forensic engineers
sounds good
although i will prob wait for it to come onto dvd
i’d rather watch russel crowe in robin hood at the cinema with my girlfriend!
you’re right though Rick, i think not only will it help domains, domain owners, but also create more netrepreneurs!
Ronald B
I think the best part of the movie is when Mark shows frustration about getting good domains:”Those scum domainers sitting on prime real estate are holding back a revolution”
Pat
This is not a dime, Martini. THIS is a dime.
If you break it in half, you don’t get two nickels, you get pigeon shit.
Anunt
Call me a geek and a nerd…but i watched this Social Network movie 3 times already…
I was thinking that this movie would be watched by atleast 500 million facebook friends…but guess not…
More people are watching”Jackass 3D”…i guess people just love comedy!
Chadi
Haven’t seen the movie, but its good to hear every New from you Rick.
I don’t have the long yrs of experience in the Domain industry; but, judging from my experience in realestate, I agree.
If the Domain industry is today as ripe and mature as is the realestate one, everyone would be in it, and we wouldn’t call what we few are experiencing as an opportunity.
I say”few”, because it amazes me how much oblivion there is to the significance of this industry and how many business owners do not take domain names seriously – how many big real-life businesses end up with a lousy domain name and presence, and how much money they spend not to think about this and to rely instead on some clueless employee to do the thinking and choosing on their behalf.
However, if all of them are to wakeup, I doubt it if good domains could still be acquired even in the aftermarket.
I do not know what originally attracted me to this industry… Maybe its the notion of e-realestate. To think that I do not have to transport my assets or be physically tied to them. All I carry with me is a username and a password, and the promise to thrive anywhere I head in this world.
Something Sufi about it, almost spiritual. But isn’t the notion of trading numbers for letters spiritual in a way?….
Just a few thoughts…
Dan
it is a good movie and would watch it again too, but not sure if I would let a young teen watch it due to the drug references. The movie does inspire dreams of a successful online business, but only for us geeky type of people. I don’t think my wife would sit through almost 3 hrs again :)
Overall, I agree.. it is good for our space.
Chris Nielsen
If you want to learn about Facebook, don’t see the movie. If you know about Facebook and want to see one version of the story behind it that is very entertaining, then you will love it.
The question on everyone’s mind now is when the movie”Cybersquatter” is released, who are they going to get to play all the main players? I’m thinking Nick Nolte as Rick, Nicolas Cage as Frank Schelling, and Jackie Chan as Kevin Ham (Jackie’s first serious role). :-)
STEROIDS UK
are there any cases of owners of catergory killer domains failing ? or is a great domain really the golden ticket.
Rahul
I loved the movie, especually that scence you reference – alsi maybe because I owned and sold FaceMash.com.
James
@Chris Nielsen -“The question on everyone’s mind now is when the movie”Cybersquatter” is released, who are they going to get to play all the main players? I’m thinking Nick Nolte as Rick, Nicolas Cage as Frank Schelling, and Jackie Chan as Kevin Ham (Jackie’s first serious role). :-)”
Nah – Al Pacino as Rick; Johnny Depp at FS, and a CGI’d Bruce Lee as KH