Jeffrey Gabriel: Strategic domain name acquisition and the evolving value of digital real estate

welcome to another coo wisdom podcast founder wisdom podcast.com you have Jeffrey Gabriel with us today we're gonna have fun today because he's the founder of sa.com which is a very epic domain name I'm a domain uh named fiend self-described fiend self-described addict you know I have my list of domain names and the more memorable they are the better I do buy at least $1 per day even

if they're not uh Investments even if they're pure collection pieces um and yeah Jeff is sort of my predecessor or ancestor and he does it way better than I am because he was responsible for the sale of notedly sex.com $13 million uh that one was sold for poker.org ai.com m.com and obviously his his current domain name is quite epic s.com so we're going to talk about that

today and the value of of these domain names which to me is one of the most uh and and most simple and best growth hack there is out there we've seen people like Sam ens with consulting.com we've seen Alex oroszi with acquisitions.com I mean it's still quite trendy to buy a domain name and make good money out of it so this podcast is brought to you by

my podcasting a gency it's called pod.com if you want to start scale or be invited to podcast if you want to find sponsors if you want to monetize your podcast and scale it to the sky and really create an evergreen um printing a ATM that will generate tons of money large en large your network uh and will grow your brains that's everything that a podcast can do

I call it the best version of a Niki guy uh personally speaking so ppar.com if you need help with that Jeff welcome to the Pod tell me a bit more about yourself and about sa.com yeah thanks for having me thanks for the opportunity um I really appreciate it so uh just a little bit about myself I've been in sales for about 20 years um and part of that experience I've had almost 14 years of being in the domain industry um I started my career at at sedo.com and that's when I sold uh sex.com back way back in 2013 I can't believe it was 10 years ago and and that was a great sale um I worked there for a number of years and I've always had kind of like an entrepreneurial itch and wanting to

do my own thing um I really appreciate everything cedo did and I I left and started a business with two of my colleagues it was doing great um things are going in the right direction but I think what a lot of people a lot of entrepreneurs realize that cash a lot of the times is the blood of a business and and things are going well but the the cost of development and advertising and all of those things even back in you know 200 uh not 20 yeah 2010 2011 12 quite expensive and one of my clients was a person named Frank Schilling who owned about 365,000 domains and he decided that he wanted to ramp up selling his domains and uh said I want you to come and do this for me full-time and so

I ended up uh moving my family down to the Cayman Islands and I lived there for about seven years and I I built up brand it was domain name sales at first but we changed it to UNI registry which was also a domain registar and and I built the sales team from four of us to about uh 50 with some of my other colleagues of course I didn't do it all myself and uh during my tenure there we did about I'd say about 450 million in domain sales and building up the portfolios so you mentioned in your in your summary of yourself in your I like to call you maybe like a digital hoarder because you just love domain names well there's thousands of other people on this planet that own tens of thousands of

domains themselves again the person I worked for own 360,000 mostly TW word.com but single word.com and then we had thousands of other people that would work with us to sell domains and on a monthly basis we would sell hundreds of domains in in the millions of dollars and I did that for seven years um at the end of my time there I said you know to myself

I was still itching to do my own thing and I moved home from Cayman in October of 2019 and and launched my business in December of 2019 and um as a domain brokerage which focuses on helping companies acquire a domain name that fits their business we help them name their business sometimes name a product or service and find them the domain that's within their uh budget it

involves a lot of Education where we have a lot of startups that will say hey we want to own you know podast . and you say well there's already a business on that or that domain is going to cost you $100,000 and they're like well our budget's 20,000 it's like okay well let's find you something else so we educate them and help them find something else or you know on the flip side is we work with portfolio owners or individuals that own premium names and we bring them to market

help people sell them and then we have uh help people value them because there's always a big question on what names are worth um in launching the business in 2019 uh things went well and talking about an entrepreneurial podcast and and we can get into I guess the nuts and bolts of the industry and selling domains if you'd like um but just basic story of of s.com

it was myself and and a colleague um Amanda Waltz who got the business started and then I ended up hiring um a few people that I've known from the industry for quite a while and and they've been in sales for a long time themselves and in in the domain business which you could really make a lot of analogies being a domain broker to being like a real estate firm so like a Century 21 or Remax but it's worldwide and it's Multicultural so and it's every industry you can imagine I mean I've sold domains at obviously with sex.com as adult related um I've talked to plenty of people in the adult business I've spoken to people in fintech I've worked with people in AI I've worked with people in baking I mean name it chocolate like

name whatever it is I've probably spoken to somebody in some of these Oddball Industries and I love hearing their stories and I love hearing how they got in that business and and that opportunity and seeing a domain name and then hearing about what they want to do with it is always interesting right and that that keeps me interested in selling domains and working with these companies and

instead of really using the word selling it's it's more like problem solving so when we went out and and started the business we really focused on working with uh a lot of VCS a lot of startups and helping them get the the right names for their business uh the business really started to ramp up um I lent the business a considerable amount of my own personal money

and and at the same time you know leaving a well-paying prestigious job in the Cayman Islands was a very large uh big decision I had a house there I had friends there I had my whole life was there my my children were born there mov back to Boston just bought a house spending all my money on the on the house decorating it and on starting a business that was you know taking some time to build and and get cooking spending a lot of money on technology and things like that and developers and and all of that and then March came and as we were building a pipeline February was quite good January was okay March started to look good and then mid-march hit and then the pandemic hit and then the business kind of like

fell on its face when everyone was slightly panicking and um you know I really started to question the business and what I was doing and then I had people who left you know similar consistent paying jobs on um goals and dreams and excitement that I have today but I had it at the same time for the business but it was a little more unknown and it was at a point you know like in April where they were saying Jeff like what the hell are we going to do nobody's buying domain names you know we had people making offers on that made offers on domains and the sell would counter and then the buyer would say oh thank God they didn't accept my offer we're we're out we're not buying and um I was writing checks

to to run the business and I remember paying everybody um for their time anyway even though we weren't really selling and I said guys like the world has stopped but what we need to do as salespeople is we need to get out there and when the when the world gets going again and people start buying again we're going to be first in [ __ ] line for them to spend their money and we got to go and do it and um I felt that I kind of buried myself in my work when the world seemed like it was melting down and and you'd hear about people dying in Italy and then people are dying over here and you know they're closing down the roads they're not their schools are closed football's cancelled basketball's cancelled no

one's flying you know you remember all that I don't even remind you and um I just kind of buried myself in the in the business and trying to make it successful and then all of a sudden it was like a switch in mid June and sales just started happening uh the world kind of adapted to the the new world that we were then in at the time and the business you know kind of took off and and we really haven't looked back from there and you know um as a company we were actually looking at the numbers a week ago and from our Inception until uh a week ago we did just we've done just under $70 million in sales since uh we opened the business four years ago so the domain business has been

great it's been challenging and um it's something that I've been lucky enough to fall into and um enjoy and I have you know countless stories about domain Acquisitions and sales that some people might find is interesting um but you know I think um you know it's it's definitely something that a lot of people don't really think about and when I explain what I do to people at

work or not at work at like a bar or in a social setting when someone asks me what I do and I bring it up a lot of the times they say how do you make any money when GoDaddy sells what you sell for $10 right and and they just don't know and and I've also talked to very large players that they've named the business they've done the press release they've they got their series a they've put all the news out and then guess what the domain name was an afterthought and then they come to me and say oh by the way we need this name and you're like Wella now you're going to have to pay dearly for it because you know you've you've kind of queed the band and and they just think

it's just you know just a like buying a copy machine it's not really a big deal and so um I know I've kind of dumped a lot of information here but I think um The Domain business in my opinion hear objections from people that domains aren't valuable any valuable anymore they don't really matter um but in the end they do they're a massive part of Commerce they're

a massive part of the fabric of society and it's something nowadays that even the smallest business in the world really needs to have um it doesn't have to be an amazing one word.com like you like you mentioned um but it should be something that is relatively easy to spell and at the very least descriptive of the services that you're offering in some way and something that's memorable

and most importantly exudes trust um if you have an awful domain um and you go to it and it's a really bad website people aren't going to put their credit card information in there and you're not going to do well and I think with onew word.com and and and as people get used to other extensions people will start to trust those more and more as well so

I I um kind of gone all over the place but um what are some questions you being a domain of yourself that you might want to ask me that I can I can Enlighten some of your listeners um about my my business well we can start with the premise uh that means humans are social creatures and they're vanity creatures right if I have Louis Vuitton on me you're gonna be like yeah you're exclusive Charles you have money you're all of that so that's the mentality behind getting a Doon it's also Simplicity it's it's a stunt you know it's like hey I got it I'm special I'm weird I'm interesting and just that in itself might justify 200k $1 million price stag now I'm just not sure if it's still an interesting business quote unquote or

maybe it is because the domains prices they they only go up right you wouldn't make any money if these docs would s still sell for $10 like back in the days um but tell me about the business business of it like do you do some ads you reach out to people who uh who reaches out to you what are your fees how many clients you have a year give me more business info sure so there's multiple divisions in the company like I I mentioned before and the first one is is that we are one of the things that we we do the best and we're quite good at is helping companies acquire the right domain for their business and what does that mean so like I said there are companies that don't have a name

yet um or they're just using an Antiquated name because they're kind of in stealth mode but they still haven't decided on their public offering name or their service that they're going to be coming out with name or they have one in mind that they'd like to get and we help them acquire that and then we actually work with a lot of companies that started in their infancy

and used an Antiquated domain name or they used an extension that isn't as popular so you could have a company that ends in a DOT TK for example and you're St to do more of an international roll out and you're realizing that you're a BTO C company so if you're a business to Consumer and you're going to be worldwide the dot is probably your most important key

asset to buy because then you can kind of Target all markets across the world because it is relatively acceptable there um and that is an import very important part of a lot of these companies business is getting that jumping from the dot secondary extension to something you know like a.com um and we see that on a regular basis so we call those domain upgrades the way that

we generate that business is absolutely number one is we do the app the absolute best we can for our clients and provide the best service that we can and knowledge through education and we we ask for referrals um and I think that people who buy domains usually know people who buy domains and in the startup world if people have had a good experience with us and you

know they like to recommend good services and options to them and that's something that that we provide the other thing we do is we actually do a lot of um you know some some promotional emailing where we we do email startups that recently have gotten funding or recently been founded and offer our services to them and we're also in on some business incubators as well and I

think um you know when people are in a business incubator they're obviously at that point in time where they're still trying to determine if what domain to use and how to use it you know one of the um things that I think a lot of people didn't realize was is is when I started my business and a little bit before it the domain extension. wasn't particularly popular and you could buy a one word.

a they have every month at the end of every at the end of every month they have the expired domain auctions thatai the domain extension puts on and you can go to their website and you can bid in the auctions there was a period of time when doai one word. AIS were selling for $500 to ,000 in auction or they were just aailable for registration at about $25 to $50 a year so there are opportunities still in the domain business where there were people who did get domains that are worth millions of dollars now for eight bucks 50 bucks a 100 bucks those days for docs are about over um but you know in other extensions like

AI um they weren't and now that one's you know quite uh valuable now to um AI based companies but the thing is that you need to to realize when you purchase a aai and you use that for your business or let's say you tried to use AIO that is trendy to us as techies but if you're going to do radio ads a lot of people are going to type in your company name.

a.com at the end because a common consumer still gets confused by those um alternative extensions whether a a was called a cctld code TLD or it's a gtld or they call them the new gtlds like a link or a sexy or axyz which is relatively popular um in the uh in in the startup space as well and what they find is is that these companies specifically B to see companies when they're trying to Target the masses they do have conversion issues with some of those extensions and that the the public is still a little behind the general masses are a little behind when it comes to you know those those kinds of domains and and that's why.

and if you were a regional company that cctld seems to be the best for companies at this period of time but I have to say that with the upcoming Generations you know the children that never lived without internet are certainly a lot more open um to Alternative extensions and and I'll give you an example so uh how old are you Charles 30 big three Z that was

a great time in my life I'm I'm a little older than you 43 and what I'm realizing is is that on a lot of these calls with startups is I'm having phone calls with CEOs that have mountains of cash in funding and they are they're your age a little bit older and some quite a bit younger and it has you know maybe they don't have as much life experience but I'll tell you what they know their business and they know exactly what they're doing to the te and when I come to them and I say you know charles.com uh we spoke to the seller he wants $2 million for that domain name the younger CEOs don't even bat an i they'll just say let's look into the io figure out the XYZ you know let's

just move on from it and they're okay with it the older folks like myself I guess because we were mixed in with pre-internet days and we still are you know communicating with some of the older folks we're more comfortable with DOT but in my age we're also getting more used to Alternative extensions as a you know a generation but I think 5 10 years from now I

don't think it's going to matter as much will that affect the value of the dotom no you know it's really like the US dollar um despite our government uh trying their best to ruin the United States the US dollar is still going to be the the number one currency in the world or if not one of the most accepted currencies even if the value drops compared to

the rest of the world's currencies right it's still a very well-respected and trusted currency so I believe that do is very similar to that um and I think that if you were going to invest in in domains and you were going to make a portfolio I would probably have majority. commoms and then and then try some exotic extensions as smaller percentages that you could get some big pops on but I wouldn't Chase um just like one cctld over the other and just really just fill your portfolio with those because Trends change um liquidity is hard in those extensions because there's not as many buyers and you if you really need money fast there isn't just like a

market that's just going to buy a onew doio for 100 grand from you you know the wholesale price on a decent onew word.com right now on the very low end is about 50 or $60,000 going up well over into the hundreds of thousand when I say wholesale that's a domain investor buying it just to flip it you know um so you need to keep that in mind the wholesale price of a doio or a aai or axyz one word could be you know hundreds of dollars or a couple of thousand dollars you know so if you look at the difference so you can get a screaming deal on a onew word.com and you have that one and you spend 50 Grand on it and you think the wholesale could be 100 I'd rather have that

than have 20 or 50 or 100 one word of some of these alternative domains because if you have to you know you can get rid of it in a week or two weeks and get a a pretty sizable amount of money you know and that's something that a lot of sellers have trouble with in the domain industry is they spend um I'm sure you've bought some domains that you're not really proud of and you've chased gotten a little too excited in auctions and maybe you paid $500 $750 $2,000 in an auction and then you've held it for a few years and now you don't want to let it go and you realize it's not really that valuable you don't have any plans for it nobody's ever shown interest in buying it but because you spent

$2,000 on it or $500 on it you just can't let it go well if you do that 500 times on top of paying that money that you spent on the domains you're also carrying the renewals right and now that's you're paying on this bad debt and and that multiplies and and I have customers that own a, 5,000 10,000 20,000 30,000 domains and every year you know when they wake up out and roll out of bed they're paying upwards $270,000 $250,000 a year in renewals and that is a significant amount of money to have to pay 20 $30,000 a month to carry that portfolio and so they have to make sales and they have to choose the right names or if they're not they got to be honest with themselves and let some go and and

put them in the auctions or just let them let them expire and um and let them go to pasture and you need to make those decisions um and not just sit there and pay you know year over year over year and not and not admit to yourself that um you know you made a mistake and I'm sure you have a few like that everybody does if you have a portfolio over a couple of hundred domains is's a few scraggs in there that maybe you shouldn't have done you know um and it's an interesting business and I think there's a lot of perception um with domain buyers in general um that believe that domain investors look at it's what I'm going to say kind of contradicts what about what I just said but what a lot

of domain buyers and I'm talking about a domain buyer would be somebody that is a company that wants a particular specific domain and then they inquire on the domain and they get a price back of say $50,000 and they get hosti angry saying I'm not paying that guy 50 Grand you know [ __ ] him it's [ __ ] but and then they think in their mind that this person paid $8 for that domain but in reality that could be the remnants of a business that failed that could have been an idea for a business that they paid $100,000 for or $200,000 for and all they have is that domain they you don't know what they have into it all the time and I think there's a perception that everybody who owns good names is

like the original registring it's a rarity now being in this business at this point that we run into the originals there's a there's some that come across my plate um we're selling the domain merlin.com right now those are the original registrants of the domain um and you could argue that yeah you paid $8 for it but you know when you registered the first time or or it

was probably I think it was no one Solutions about $100 back then but the reality is is that's like saying to somebody who's in their 80s who bought a piece of oceanfront property in the 1970s for 10 Grand I mean it's irrelevant right the times have changed and now it's worth over a half a million dollars you know and that's just the way it is you know

and there is a bit of anger about it but I think for myself you know it's myself I have five salese that full-time with us I have five other um Business Development people that work for me we have a number of developers I have an assistant I have other contractors that do work for us and um I don't pay rent and when you buy a name like aadom when I was a kid and when I got into the business world people would pay huge amounts of money to have a Park Avenue address and pay for really expensive um commercial you know rent commercial property in a really nice Street a really part really nice part of a city with parking and all these extras now companies are just solely based from home so instead of

making your home making that place the commercial building companies should be looking at paying rent on a domain name or paying it off over time and then they can get the benefits of it as well and kind of get over the fact that there was somebody that bought it for eight bucks you know it's it's just the way it is yeah uh we're on time Jeff where can people find out more about you uh you can come to s.com and an email address I like to use is Buzz Buzz ats.com uh love to carry on the conversation with anybody if you mention this podcast to me and you have a question about any domains you own or about something you'd like to do I'd be happy to uh myself or one of my colleagues be

happy to call you and and give you a free consultation there we go that was Jeff Gabriel and Charles Cormier for another founder wisdom podcast.com