Wall posts do not necessarily make for sound policy, but there is potential for some business benefit, if only a little.
This is a bit long, as blog posts go, but it was a necessary response to the vital stimulus provided by the Domain King, Rick Schwartz. His blog entry of May 11, 2011, The Birdie in the Domain Mines: Singing or Dying?, is an excellent study in business fundamentals. My compulsion to respond was, for once, tempered with a careful analysis and retrospective that, while protracted in reply, does clearly explain my perceptions, whether right or wrong. You be the judge, but I implore you to read Rick’s post, first.
My reply follows:
Rick, the shakeouts have been happening since 2008. Actually, since about 2006, when everything was approaching a peak, in terms of the domain industry.
Now we have the long, reticent withdrawal of so many of the Johnny-domain-lately types who can’t hang on. I was late the domain game, but I have been online a long time. Recently, around the middle of 2007, I put both feet back into the vast digital ocean, but I only pushed up to my limits, not over them.
Those that speculated beyond their capacity, their ability to stay in the game, are washing out. That will eventually lead to another growth spurt, but this won’t happen for a while. I’m not sure when it will happen, but it will. The washouts will leave no vacuum; there will be new opportunities.
The industry is enduring a metamorphosis, even a transfiguration, if you will. As that happens, and as the industry matures, its participants will find the various, successful methods for monetizing domains and acquiring domain investments. You said it, yourself, Rick: The people in this industry, the real ones, are “investors”. I believe you made that statement in Las Vegas, at the 2007 show.
Keeping with that mantra, there are many reasons to invest, and speculators will also come with the investors. What this industry will come to discover, as the speculators manifest and evaporate, is who remains for the long term.
These investments are not stocks, where one can get a quarterly ROI and then sell. Domains are property; they are contractually-bound assets that can be either leased, rented, sold, developed or held as vacant. The interesting thing about this industry, and the players in it, is each has a different perspective about how to proceed. In all of our discussions and business together, I have yet to believe each of us has all the answers.
Each has a powerful message and extraordinary insight. Some have tremendous resources, while others must follow a different model. If I was to borrow from socioeconomic studies, one, the former, may be identified as a sort of “haute bourgeoisie”, the other a type of “petit bourgeoisie”, or small shop owner.
What will determine the success in the long term will be vision, ability to manifest that vision, and raw, sometimes gut-wrenching tenacity. Partnerships will get strong, wane and then get strong again. But there is no question about who the real people are, when the moxie finally produces a business model or a monetization model that works well, and works consistently.
In early 2008, on an email I sent you, I commented that development was the only way to go. You replied that development meant creating a business online. I am not sure I agreed with you at the time, but I certainly do now. I have been back in the game long enough to truly grasp my strengths, and to stay close to those who have gifts I do not possess. That mutually beneficial relationship makes for solid, long-term business arrangements that bring the potential for broader investment strategies, and that’s the kind of industry maturation that is happening today.
And there will be greater changes ahead, some we can not foresee at this time. I assure you, getting to the topic of your original post, that having gone back to my own “online roots”, which are development for small business whilst developing my own online networks, the fundamentals will always be in play, with or without Facebook, Twitter and Google. I remember when Lycos was big. I remember when everyone used Yahoo. I still have a Yahoo email address.
Even AOL has a chance to make a comeback, but in their case, change is needed. The business model of 1991 will not work for them now, 20 years later. But basic investment strategies, understanding the client and the consumer, will always work.
People who are not afraid of work will appreciate that. Those who are speculators will enjoy a moment of sunshine with Facebook, Twitter and even some types of SEO. They will not be here next year. Some will be gone next week.
With that said, I should have put this on my blog. But I believe more people may read it here. 🙂