3 common mistakes startup founders make when trying to acquire a domain name

Let me know if this rings a bell. You hire a marketing firm and spend a month (or longer) writing down things like your company values, the words that are important to you and your clients, the feeling you want your name to evoke when someone hears it, and the list goes on.

About $10,000 later you’ve emerged with that perfect name for your company. You then rush to a browser and type the name in, add a .COM to the end, and – doh, it’s already taken. Maybe it looks something like this:

friending-com

First things first. You probably should have known that if you wanted a meaningful one-word .COM it wasn’t going to be sitting there available. All of those names were usually taken in the 90’s, and those that weren’t got scooped up in the early 2000’s.

At this point you’ll probably say something like, “Some stupid squatter has my domain!” In some cases you’ll make an offer, in others you’ll just pick something like GetFriending.com or FriendingOnline.com or maybe you’ll try a different domain name extension and pick something like Friending.io?

Okay, before I go any further let’s make sure you know what a real cybersquatter is, because if indeed someone is squatting on your domain you can take it back through a legal process called a UDRP. A cybersquatter (squatter for short) is someone who registers a domain name that matches someone’s existing trademark or a name they’ve been using for years. It’s a malicious act and is pretty darn close to extortion. That’s why UDRP’s are there, and for under $5,000 you can file and likely win the name through this legal process if indeed someone is squatting on your domain.

udrp-process

In all actuality someone probably isn’t squatting on your name, instead someone has invested in that domain name, just like you might invest in real estate. If you bought land 30 years ago and I offered you the same price you paid then, would you sell it to me for that price? Probably not. So don’t expect someone that owns a valuable domain from the 90’s to do the same.

That being said, domain owners aren’t evil, in fact many of them are startup founders, angel investors, VC’s, well-known startups, Fortune 500 companies and other entrepreneurs just like you. It’s easy to blow the whole deal by making a number of mistakes that will leave you with the word “Get” in front of your name or “Online” after it for years to come.

Don’t want to blow it. Here are three ways you can screw it up, avoid these and you might just be able to get the domain you want.

  1. Putting in an insultingly low offer price – the number one way these deals go south is if you insult the domain owner, either right away or early in the conversation. If you paid $100,000 for your house in San Francisco in 1970 and I tell you I want to pay $120,000 you’d probably just ignore my emails. The same will happen if you put a $15,000 offer on a domain that usually sells in the $500,000 range. Last month Vivo.com sold for $2.1M, this summer Jade.com sold for $1.2M. If you want a good one-word .COM, don’t expect to pay .NET or .ORG prices. Be realistic and be a normal person during the negotiation if you want a domain owner to both do business with you and actually want to help you out and maybe give you a good deal in the process.
  2. Assuming that a domain owner with a privacy protected email can’t be contacted – I’ve seen this happen all the time. You try to look up the domain owner using a WHOIS service and it’s something like privacy119347@privacyprotection.com. What most people don’t realize is that you can email these addresses and they forward to the owner. So don’t hold back, email that weird looking email address and let them know that you’re interested in buying the domain name.
  3. Hiring a bad domain broker – there are a lot of domain brokers out there, seriously, there are hundreds of people who help startups acquire domain names. While there are lots of great domain brokers (two of my favorites are Igloo and Media Options), there are also lots of bad ones who actually work for the sellers and are trying to get the highest price possible so they get a big commission check. You want a broker that is on your side if you choose to take that path so make sure to do your research and talk to previous founders that have worked with a broker before bringing someone onboard.

Okay, so I’ve covered three ways you can blow it, what about how to not blow it? I wrote an article on Medium a while back about this called – What every startup founder should know about buying domain names. If you haven’t read this yet it will walk you through the basics so you can hopefully get the name you want the first time around.

Oh, and maybe make sure the marketing firm you hire to come up with the name in the first place knows a thing or two about domains. If it’s not a part of their process and they leave you high and dry with a name you can’t get now just know you’ll pay a lot more for the domain later down the road if your startup hits it big. The best time to acquire a domain is before you’re all over Techcrunch since this just tells the domain owner that you have a big budget.

Thanks for reading and good luck getting that domain name!

{ 9 comments… add one }

  • Scott Bender Orlando December 18, 2016, 10:49 pm

    Morgan:

    Great post. So true

    Reply
  • Linh December 18, 2016, 11:52 pm

    Xàm lồn làm ăn thua con cặt vãi lũ chó điên

    Reply
  • Jamie Zoch December 19, 2016, 7:35 am

    Good stuff Morgan! Now let’s hope all founders, rebranding companies, new products and service providers read this and take it to heart!

    Reply
  • RaTHeaD December 19, 2016, 9:14 am

    most excellent post. informative yet concise.

    Reply
  • Bill Sweetman December 19, 2016, 1:16 pm

    One easy way to determine if the domain broker really has your best interest at heart is to ask them what their compensation model is when working for you, the buyer. If their fee is based solely on a percentage of the purchase price then they may not be financially incented to get you the best deal possible. My clients love the fact that our domain buyer broker fee structure aligns with their business goals rather than competes with them. In fact, it was one of our clients who suggested the model in the first place. This also explains why the majority of our business comes via referral from other satisfied startup founders. They know and appreciate a fair(er) model when they see it.

    Reply
    • Joseph Peterson January 14, 2017, 1:13 am

      @Bill Sweetman

      EXACTLY!!!!!!!

      “If their fee is based solely on a percentage of the purchase price then they may not be financially incented to get you the best deal possible.”

      Entrepreneurs who hire a broker to buy a domain on their behalf … and pay that broker 15% of the final price … are absolutely crazy. Usually they overpay. I’m amazed so many people do that. But common sense has never been common.

      Reply
  • Tessa Holcomb December 19, 2016, 2:38 pm

    Great advice, Morgan and you’re one of our favorites too, btw! 😉

    Reply
    • Morgan December 19, 2016, 10:35 pm

      Thanks @Tessa – much appreciated! It’s safe to say that Igloo is one of the favorites of many of my startups friends so we’re all in good company 🙂

      Reply

Leave a Comment