

How To Waste $500,000 On A Domain Name - Startups.Com Story - petercooper
http://www.pickydomains.com/node/3024

======
petercooper
Update: rounak (whose comment is [dead], unfortunately) has noted that this
post is basically a copy and paste from an original TechCrunch article:
[http://techcrunch.com/2012/05/04/startups-com-is-shutting-
do...](http://techcrunch.com/2012/05/04/startups-com-is-shutting-down-domain-
name-not-for-sale-for-now/) \- Curiously, someone linked to the original TC
story yesterday on HN and it didn't take off at all:
<http://news.ycombinator.com/item?id=3928703> .. I suspect this was because
TC's title wasn't very good.

I was going to delete this "dupe" but since the discussion has kicked off
here, I'll keep it. However, if an admin wants to "fix" the link to point to
the original TC source, please do so! :-) Mea culpa!

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perlgeek
Somehow "startups.com" doesn't strike me as a perfect name for a daily deals
business.

~~~
stevenj
Meant to upvote you, sorry.

~~~
RegEx
I don't have a downvote button, so I'm guessing you aren't able to undo a
downvote?

~~~
maaku
No, and they are frustratingly close together too. I've down voted a number of
people by accident due to my fat fingers...

~~~
RegEx
I accidentally downvote on Reddit all the time on my iPhone, but they let you
switch.

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paulhodge
It's not a 'waste' when you can resell the domain, in fact it sounds like he
could even turn a profit:

> Arzuage says he doesn’t want to sell the domain, even though he has already
> had offers in the high six figures should he change his mind.

~~~
Androsynth
If he was just trying to make money by flipping the domain name, than it might
be a savvy business move. But his goal was to start a successful business and
make more than a few hundred thousand dollars.

He could have named his company: randomstartupdeals.com, or something not as
succinct as startups.com but much cheaper. Then he could have used that $500k
to extend the life of his business (possibly through another pivot or two).

~~~
wilfra
The domain was purchased in 2008. The startup that failed was launched only a
year ago. So the $500k spent on this domain could not have been used for the
daily deals venture because it didn't even exist yet.

However you are correct if a startup gets $X funding and spends $Y on a domain
and then runs out of funding, if having $Y in cash at the end would have given
them enough runway to significantly change their odds of success, spending
that money on the domain might not have been the best idea.

It doesn't appear that is what happened in this case, though.

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dennisgorelik
Traffic stats are quite telling:

<http://siteanalytics.compete.com/startups.com/>

~~~
ted0
Ouch. You'd think that with a name like that, a little SEO could triple that
#.

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gorkemcetin
I believe the maximum amount of money that could be spend on a domain is $15,
however more expensive (!) TLDs do exist. We spent an overnight to find the
right name for our open source mobile analytics application Countly
(<http://count.ly>).

Overspending on a domain is a habit of past, and doesnt't bring you any
advantages. Focus more on marketing, product and usability.

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DanBlake
The other company mentioned, Blinklist, is being sold here :
[https://flippa.com/2729396-blinklist-com-
pr-7-173k-incoming-...](https://flippa.com/2729396-blinklist-com-
pr-7-173k-incoming-links) currently at 26k

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ted0
It's obviously an amazing domain and to say it's a waste, might be a little
drastic. It does seem about on point or even a little high as far as its value
on its own but I think that he could at least recoup that initial investment.

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arunoda
Here is my experience with domains and I always goes for $15 domains -
<http://news.ycombinator.com/item?id=3933250>

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zerostar07
Anybody thinking of starting an Expensive Domains brand? Kind of like the
Prada of domain names. Names don't have to be premium domain names, they'll
just be absurdly expensive.

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diego
I think that would be the perfect domain for Hacker News :)

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diego
Some people don't agree, but seriously: Hacker News these days is much more
about startups than about hacking. Just look at the front page. This article
itself is about a startup and has nothing to do with hacking.

~~~
planetguy
Pah, kids these days. In my day Hacker News was _called_ Startup News.

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arunoda
Yes. Spending money on domains is a waste. Last year, I started a company
called codeincloud, but the domain cost around around $5000. I just changed
our company's name into kodeincloud :) (It's more sexy than codeincloud and
and cost $12)

Recently I just purchased another domain for one of new product. Actually I
named the product just after I got a domain. It's Dokeeno
(<http://dokeeno.com>)

The point here is don't spend on domains and name of your company, Just build
the brand & product

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Techlusive
They should've gone to Techlusive.com tisk tisk tisk

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loverobots
The title and story is tacitly saying that spending $500K on a domain is bad.
I disagree, but I agree that they made a mistake on spending $500k for _this_
domain, given their business plan.

Some domains are rightfully worth millions and millions.

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joering2
My take on domains is that they are way too cheap. I would love to pay $500
per year for a domain that I sincerely NEED. Domain is indeed a good start,
but because they are so cheap to grab, there is a "dictionary rat race" to
hold on to every possible word that dictionary has to offer. I think this fact
alone played a huge role in entrepreneurs giving up on "awesome" names and
just going along with creating a new words: like flickr instead of flicker,
plus hundred other examples.

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citricsquid
A website I started for $10 turned into a website doing millions of dollars of
revenue a year. I would not have started that website if the domain cost me
$500 because I didn't have $500. Hiking prices isn't the solution, all that
would do is exclude "the little guy" and increase the resell values of
domains, further excluding smaller organisations / individuals.

~~~
joering2
whats that website address?

~~~
citricsquid
<http://minecraftforum.net> <http://minecraftwiki.net>

both set up for $10 (each) at a point where I was unemployed, had nothing
beyond the few $ I made freelancing, both now doing over 1,000,000,000 page
views a year (with adverts). Wouldn't have existed if domains were priced at
$20 or more each (I had $40 to my name at the time, if I remember correctly).

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staunch
Those are actually a special case. You're trading on someone else's trademark,
that's what made those domains work. Usually domains like this are shutdown
with an UDRP.

If I could register domains like AmazonDeals.com I could make a killing too,
but they would get shutdown instantly.

~~~
citricsquid
Well of course there are intricacies associated with my example, but the
general point is what matters:

Websites that do exist that are making a lot of revenue and employing a lot of
people would not exist if domain prices were changed to be only affordable by
those with substantial income. I've seen other HNers talk about this before,
I'm sure if you don't like my example I can find other examples that don't
have anything to do with trademarks.

> You're trading on someone else's trademark, that's what made those domains
> work. It's likely both could be shutdown with a UDRP.

Also specific to this point, no, we have been permitted to use the Minecraft
trademark since day 1. We can't be shut down (not that they would ever want
to).

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staunch
I don't think there really are that many examples where $10 domains
(registered in the last couple years) were a key to success. I'd be sincerely
interested to hear examples where that was the case.

Most people who are genuinely prepared to put effort into building a business
would be willing and able to spend a bit of money. Maybe $500/yr is too high
(I think so) but I seriously doubt $100/year would stop anyone who was at all
serious.

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citricsquid
What do you define as success? For me success is once something becomes self-
sustaining (paying the employees wages etc.) and I can name quite a lot of
people I work with today that would not be in the position they are now
(living off their websites) if domains were $500.

Maybe my world view is skewed because I spend a lot of my time around people
that build sites as hobbies that turn into businesses and not _true_ startups
like Instagram or Twitter.

I forget the persons name, but just last week a hackernews user posted about
their top 400 (I think it was 400?) US website that they started in high
school as a hobby, I doubt they would have started that if domains were priced
at $500.

~~~
joering2
> that would not be in the position they are now (living off their websites)

could you possibly name a few? perhaps I can learn new things...

