We all know the success stories of Frank Schilling, Rick Schwartz, and Kevin Ham. There are two reasons why they are wealthy men. One they had money. Two, they bought domains when others told them they were stupid and wasting their money. Ironically, these are the same two things that prevent people from making millions.
It takes money to make money. Two letter domains sold for $10-20K in 1995. That’s a hell of a lot of money now and it was even more back then. To make it an even more ballsy was the fact that the Internet was not a “set” thing. I’m sure one person after another smiled and said “Oh, that’s nice” when in their head they were thinking “This guy is crazy and is going to lose his ass” Not everyone was sure the Internet as we knew it then would continue to exist in the same form as it was in the mid to late 90s and they were flat out scared to spend. Add the $30 renewal fee and only the confident held on.
It’s easy to say now that you would have bought like crazy, but as a man that speaks from experience, it was hard to do. I was young. Only 25 at the time and I was broke. I had just married and was starting a new business. I knew the Internet had the possibility to become a major part of daily lives and I bought 25 or so domains through my company. Some of the names were great names and would be worth XX,XXX now but I sold them for cheap because it seemed like a great return and I need the cash, or I got tired of paying the renewal fee and let them drop. There were some big names that I wanted that were garden related and today would be worth a few hundred thousand but at the time they sold for 5K and I just didn’t have it. Those two things I mentioned above held me back. I didn’t have the confidence to extend myself financially. I knew it COULD be great but I just didn’t have enough money to offset the caution.
I had been trading 3 years prior to joining the family business and I knew all about risk reward. It wasn’t until after I had some extra money that I became a strong trader. I had the money to take the risk necessary to make serious cash. When you don’t have to live off the money you are investing or “gambling” with, you can take bigger risks. Risks that lead to bigger rewards. I made more money AFTER I was on the trading floor because I had more confidence in what I was doing and because I had more cash in my bankroll. Of course, I could have lost a lot more, but I felt comfortable in my strategy.
Domaining is no different. To make good money you have to invest in solid names. Once you’ve reached a point that you have sufficient income then you can be a bit more risky with other names. Frank Schilling is my hero when it comes to plant names, he had the balls to go all out and buy everything. His portfolio is full of HUGE generics but also consists of thousands of medium quality names that have long been paid for by the major names. I compare it to the football program paying for women’s lacrosse. Football pays the bills. Enough that we can have the luxury of women’s lacrosse. Looking through his portfolio, he pretty much went through the dictionary and bought plant name after plant name. I know Frank doesn’t have the same love of plants as I do. He was smart enough to know that someone like me would come around and want those names. Names I could have had for a few hundred are now going to cost me tens of thousands. All because he KNEW these were valuable and had the cash to back his ideas.
So where does that leave us? It leaves us with smaller returns. There are still millions to be made on the net and in domains but it will cost you more with less return……..but with a lot less risk. The old risk reward scenario again. I have a strategy to make my millions and the ground work is being set. I still have one more problem……time. I have none. I will be buying that soon but that’s for another day and another post.