domains-for-startups

Hello, happy Friday and welcome to Morgan’s Flippa Five. Now that so many of my readers are startup founders I thought it was time to transition my Flippa Five series away from domain investments and instead focus on domains that startups could use in re-branding or initially branding their companies.

So like I do every week, I have combed through the list of domain names on Flippa but this time rather than looking at domains that would make a good investment I’ve identified five domains that could be a great fit for a startup. Enjoy!

Went.com – this could be a great domain for a startup in the travel space, incredibly easy to remember, easy to spell and a word that means something to everyone.

Paperless.com – from startups helping doctors offices move away from paper to startups digitizing documents there are a lot of uses for this name in a world that surprisingly is still going digital.

BarTab.com – one app to rule them all. I could see this as a great domain for a startup that makes it easy to keep a bar tab using your smartphone rather than using that old clunky credit card.

Dro.ne – I’ll be honest when I say I don’t particularly like .NE domain names and if you’re investing in domains I’d stay away from this extension. Still, drones are hot and only getting hotter and this is the one domain that literally is drone.

Typenote – building a competitor to Evernote? Here’s your domain.

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new_gtld-kpis

In the startup world we talk a lot about KPIs or Key Performance Indicators, things that can tell you and other people how well you are doing. At the same time there are “Vanity Metrics” these are metrics that are much easier to make look good, but don’t actually tell anyone how your business is actually doing.

Techcrunch wrote a great article about Vanity Metrics, in it they say:

“Vanity metrics are things like registered users, downloads, and raw pageviews. They are easily manipulated, and do not necessarily correlate to the numbers that really matter: active users, engagement, the cost of getting new customers, and ultimately revenues and profits.” (Source – Techcrunch)

In the domain name world new gTLDs are still new enough that people are trying to determine what are the real KPIs that can tell you how a new gTLD is doing, and what are the vanity metrics that are just big numbers meant to impress the press.

I personally think that “total registrations” is a vanity metric since it is so easily gamed. If one person owns a million .bongo domains and then twenty people each own one. Saying that .bongo is incredibly popular wouldn’t really be true, but the vanity metrics make it looks like it’s on fire.

The real KPI that I think truly should matter to a new gTLD (and their investors) is number of unique registrants. The reason here is that one person who owns 20,000 domains isn’t going to build sites on all those names, put them to use, or do many of the other incredible things that they new gTLDs were created to do. In the end, also the person who owns 20,000 domains is less likely to renew all 20,000 each year vs. someone who owns two or three who will very likely keep renewing them.

The time has come to look past the vanity metrics and focus on the KPIs and for new gTLDs I’m going to come out and say it – total registrations is a vanity metric, total unique registrants is a KPI.

Agree? Disagree? Comment and let your voice be heard!

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Startup Words Wednesday: IPO

startup

For some CEOs and startup founders an IPO is the holy grail, while others dread the day they’re forced into one. Why do some companies want to “go public” at any cost, while others wish to avoid it? I dedicate this Startup Words Wednesday to exploring the almighty IPO.

Initial Public Offering

“It is the process where a privately held company becomes a publicly traded company with the initial sale of its stock.” -nasdaq.com

Benefits

The advantages of an IPO are nothing short of vast, and each industry has their own specific reasons for desiring one. However, we can articulate a few overarching drivers:

  • Resources: the first and most obvious benefit of an IPO is the prospect of raising massive amounts of capital. It can have a variety of uses from paying off debts, securing more loans for rapid expansion, expanding the labor force, diving deeper into research and development to surpass competitors, or even acquiring other smaller businesses. Here are a few of the largest global IPOs of all time as reported by Investopedia:
    1. Alibaba: $21.8 billion on September 18th, 2014
    2. Visa: $17.864 billion on March 18th, 2008
    3. Facebook: $16.007 billion on May 1st, 2012
  • Financing Acquisitions: in addition to using cash, many acquisitions are made using stock. Issuing shares is like printing money that can be used to finance or supplement corporate takeovers.
  • Shares as a Strategic Tool: Going public can also give companies a strategic edge. The company may buy back shares from investors which might inflate its market price by
    1. Showing that there is a consistent demand for the company.
    2. Providing some tax incentives at year end.
    3. Dividing its earnings over fewer shares since the company owns them. Earnings per share is a key metric for investors examining company profits.
  • Notoriety: the company’s marketability and brand equity skyrockets after an IPO. Their credibility and market exposure are instantly exponentially increased which helps their bottom line and also attracts top talent to their workforce.
  • Liquidity: Most importantly, this is often the reward portion of the risk-reward lifestyle that founders, early employees paid in stock, and investors had to live in during the company’s infancy. Everyone who at one point or another took equity instead of a paycheck is now rewarded. Initial investors can cash out their shares for a large pay day.

Disadvantages

The drawbacks of an IPO usually boil down to these:

  • Beholden to Shareholders: have you ever had a micromanager for a boss? Shareholders have very high, and frequent expectations for results. Work is heavily scrutinized with the constant expectation for profits at every turn. Stocks have a manic-depressive like personality to them especially in their first 6 months after an IPO and are heavily influenced by public perception and psychology alone. The unintended consequence is often that corporations focus on short-term gains rather than long-term growth and adopt questionable practices to boost earnings. Financial engineers are often appointed to the helm to fix earnings rather than produce organic growth and real products.
  • Pervasive Press: this is a double-edged sword. While notoriety helps a company succeed, it also adds an extra layer of performance anxiety often influencing C-level decisions that would otherwise be easy to make.
  • Reporting: public companies have to constantly comply with SEC regulations and abide by frequent and costly financial reporting
  • Loss of Control: in addition to shareholders scrutinizing your decisions, they can also determine your company’s future. If you’re a private company, you and your few investors can opt for more investors or turn down acquisitions. A public company does not have this luxury. Even if you do not think selling the company is in its best interest, the public can vote to move forward with an acquisition anyway. In hostile takeovers, an acquiring business can use a similar tactic to their advantage and employ the “bear hug” strategy of offering to buy shares of your company for much more than the fair market value. This forces you to sell because you’re legally obligated to keep the shareholder’s best interests in mind.

Elon Musk is a great case study for the benefits and disadvantages of an IPO. He publicly loathes them because he’s had control issues with his past companies and outside investors destroying his long-term visions. However, he strategically held an IPO for Tesla in 2010 to keep both Tesla afloat and pay back loans to SpaceX.

Regardless of your company’s vision, an IPO is an option that should never be entirely ruled out, but should not be taken lightly either.

Do you have any personal stories of your company facing an IPO? Please share in the comments section!

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mergers-and-acquisitions

Tomasz Tunguz, a VC from Redpoint wrote a great article about the impact that Microsoft’s acquisition of LinkedIn is likely to have on startups. He highlights three main implications:

  1. Informs new M&A multiples
  2. Potentially transform the CRM landscape
  3. Remove LinkedIn as a buyer of other companies

I think that points #1 and #3 are almost absolute certainties, #2 is a bit more complex. The big question is, do CRM companies need to add intelligence and data vs. being a standard system of record as they have been in the past. Ten years ago the data you entered into a CRM was data you collected yourself and spent time manually inputting and making your own. Fast-forward to 2016 and that data is all out there somewhere, those that can connect it have the potential to save their clients a lot of time.

“With the acquisition of LinkedIn’s data set, Microsoft will have an opportunity to both continue to grow the existing business by selling it through its channels, differentiate its CRM product, Dynamics, and offer a sales productivity tool in Sales Navigator.” (Source – tomtunguz.com)

It’s easy to see the network effect of this transaction in an image like this one:

microsoft-linkedin-graph

(Image Source – The Verge)

Combining these graphs will without a doubt allow Microsoft to compete in a way that many companies won’t be able to. Couple this with the fact that the Microsoft-LinkedIn deal is the largest software acquisition ever and it’s safe to say we likely can’t yet understand the magnitude of what is going to happen.

Of course this all relies on Microsoft not f&*%ing everything up, and that’s also something we’ll have to wait to see. What do you think – is Microsoft going to unlock the true power of everything LinkedIn has been building? Comment and let your voice be heard!

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Happy Father’s Day

I wanted to take a moment to give a huge thank you to my Dad who is such an incredible inspiration and driving force in my life. This year I am very lucky to be back home in the Bay Area so we can spend Father’s Day together. Haven’t seen my Dad before? Here we are together in Sea Ranch for a our annual Father-Son weekend vacation:

morgan-bruce-linton

Today we’ll be going for a walk on the bay and then firing up the barbecue and watching one incredible basketball game – Go Warriors!

I know there are also some amazing Fathers who read my blog so I wanted to also wish all of you a happy Fathers Day. Okay, that’s it for me, now stop reading this and go hug your Dad!

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startup-fundraising-2016

Raising venture capital used to mean meeting with investors in Silicon Valley or New York City. Fast-forward to 2016 and other markets like Los Angeles, Austin, Boston, Seattle and many more have emerged as very viable sources of capital for startup of all stages. While it’s no secret that 2016 is expected to be a rough year for startups there is also a shift in where startups are raising money.

Recently Mattermark wrote an article about the rise, and decline of fundraising activity across some of the most well-known cities for VC activity in the US (read it here). Markets like San Francisco and Seattle have seen a slowdown with cities like Austin seeing a sharp decline down 63% vs Q1 last year.

At the same time, cities like Boston and San Diego have seen sharp increases and three hours north of Austin fundraising has kicked into high-gear as Dallas has seen a major spikes up 146% in Q1 2016 compared to last year. Here’s a quick look at the top ten cities in both categories:

startup-fundraising-decline-2016

startup-fundraising-increase-2016

If you want to do a deeper dive into the data make sure to read the full article on Mattermark.

 

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Techstars, the top rated global startup accelerator announced the first class in their brand new Retail Accelerator in partnership with Target.

techstars-target-accelerator

Given how much technology is impacting the retail world it’s no surprise to see a retailer like Target that is famous for innovation to be one of the first to embrace a program like this. Ryan Broshar, a successful founder and angel investor is the MD of the Techstars Retail Accelerator and he has done a great job picking the companies for this class following along with Techstars commitment to diversity:

“When recruiting startups, we strived for diverse ideas and founders.  I think we nailed it as more than ½ of our startups have a female founder and two startups are from outside the United States. This aligns perfectly with both Techstars and Target’s sincere commitments to diversity.” (Source – Techstars Blog)

I am also very excited to say that both myself and Daina are mentors for this new program and will be flying out to Minneapolis in July to meet with the companies that are going through the program. So now I’m sure you’re dying to know – who are the companies in this first class? Here’s the official list below:

Looking forward to meeting all these awesome startups in a few weeks, an exciting three months is ahead!

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Protect Yourself from Password Leaks

Password Leaks“I changed my password everywhere to ‘incorrect.’ That way when I forget it, it always reminds me, ‘your password is incorrect.’” As funny as this is, people actually come up with equally ineffective passwords that are amongst the most used and easily guessed like “password”, “123456”, or “Star Wars.”

To make matters worse, they use the same login credentials across all their online accounts. What happens when someone uses the same password and email for everything online? Mark Zuckerberg is a great example. He used “dadada” and the same email across several social media accounts and they were briefly taken over. Luckily he was smarter with his company’s accounts and more sensitive sites.

It’s theorized that hackers gained access to Zuckerberg’s account via LinkedIn’s security breach that revealed 117 million unsalted logins from 2012. The real lesson is that no tech company is above reproach in these situations. Myspace, Tumbler and an agonizing list of other major sites have had leaks or will have leaks.

Here are some simple ways to thwart attacks or compartmentalize these holes in security to protect yourself:

  • Check to see if your email was involved in a leak and get alerted of future leaks involving your email via haveibeenpwned.com so you can quickly change your password.
  • Change your passwords once a year.
  • Use different email addresses and strong passwords for all your accounts.
  • Enable two-factor authentication where possible.

You can find out more about security strategies and simple online safety tactics by reading my series on how to protect your domains and other sensitive data where I explore the dangers and solutions to malicious applications, using unsecured connections, and plain bold social engineering.

If you have a cautionary tale about one of your accounts being hacked, and the controversy or hassle that ensued, please share it in the comments!

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ceo-email-scam

A scammer just tried to get us to transfer $19,200 to a bank account under the name of Double Dove Corporation at Bank of America. They spoofed their email address which is antoniogarrido189@gmail.com and made it look like the email came from someone within our company. It’s a pretty sneaking scam and here’s how it works.

The scammer spoofs the email address of the CEO or someone high up in a company and sends an email that looks something like this:

Transfer the amount of $19,200.00 Below are the informations email me the receipt after it has been sent.
 
Bank of America 
Double Dove Corporation
Address: 101 Santa Monica Blvd
Santa Monica, CA, 90401
A/C# 325027862113
R/T# 121000358
 
Thanks.
In a big company I could easily see an assistant seeing this email and thinking it was from their boss and transferring the money. In a startup like ours, this immediately looked weird since we’re not in the business of randomly wiring ~$20,000 to people or companies we’ve never heard of.
Because I hate scammers so much, and I’m a Domainer I also took the liberty of buying DoubleDoveCorporation.com and forwarded it to this blog post. I also called Bank of America and they are going to investigate the account, and I’m having Google do the same on the email address.
So if you get an email that looks like it’s coming from someone in your company, asking you to send a bunch of money to a random bank account. Don’t do it. Oh and if you see this scam please share in the comment section here so we can put these scammers in their place.

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NYC.tv rebrands to Nameless.tv

From one .tv to another – NYC.tv, a startup that raised $52,511 last July has pivoted their business and changed their name in the process. The original idea behind NYC.tv was to fund independent video creators and filmmakers in New York City.

As we all know though, many successful startups don’t end-up doing what they initially thought they would, instead they learn as they go and iterate or pivot along the way. In this case, NYC.tv CEO Kareem Rahma said that the audience interest just wasn’t high enough. So the company changed names and changed directions and introduce Nameless.tv (see below)

nameless-tv

The new idea is to aggregate online video content into channels that people can watch together. Right now most online video watchers view content independently and then comment on services like Twitter, Facebook, or Snapchat. Rahma’s idea is to make it easy for people to watch content together and comment on it without having to go to a separate network.

Is this the pivot they needed? Only time will tell but I always have a huge amount of respect for any entrepreneur that realizes that what they are doing isn’t working and has the guts to make a change. I am looking forward to seeing how Nameless.tv develops over the course of the year.

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