My two cents on this whole .WS discussion

two cents

So I’ve had more emails from readers asking me to chime in about the .WS debate than I had about some of Chef Patrick’s adventures so I know this is a hot topic in the domain industry. Since this is MorganLinton.com, and I am Morgan Linton it only makes sense for me to share my thoughts with you, and of course, I’d love to hear your thoughts. So here we go…

I think of .WS like I do .CLUB, .NYC, .WORLD, and many other non .COMs and new gTLDs. By that I mean I see it as a very risky investment in an unproven market. I can’t say there is enough sales history/volume in any of these extensions to say how they would sell in the future, it’s a bet, and one for people with a higher tolerance for risk.

So who takes big risks? People like Richard Branson, Tony Hsieh and many more take risks, but they also know when a risk is too big for them to take (read more). One of my favorite quotes from Richard is:

Richard Branson

“As an entrepreneur you should be willing to take risks and trust your judgement when you do, but you always have to think about the worst-case scenario” 

Within the domain industry I find there are typically three types of people:

Safe investors – these folks choose to invest in proven markets and don’t take big risks. They’ll occasionally have big wins but usually they are going for smaller wins and more steady income. They might never make tens of millions of dollars but they can make hundreds of thousands of dollars every year.

Medium risk investors – while mostly making safe investments, medium risk investors don’t mind delving into riskier markets for bigger rewards, but they rarely make big bets in risky markets. Medium risk investors could have one year where they make a lot more money than the year before based on a risk they took paying off. I consider myself a medium risk investor, I’m okay delving into new gTLDs and extensions like .WS but the vast majority of my focus is on .COMs.

High risk investors – this is the Rick Schwartz and Frank Schilling’s of the world. When Rick spent a small fortune on domain names in the 90’s the market was completely unproven. There were no big sales numbers, and no way to really know where the market was going to go. Frank bought domains after the .COM bust and also spent a small fortune in a very risky market. High risk investors often lose it all, but when they don’t, they win big and make tens of millions of dollars.

I’ve known Elliot for years, he’s one of the smartest and sharpest investors in the Domaining world, he’s also a safe investor so I wouldn’t expect him to invest in .WS. I don’t think you’ll see Elliot buy a mansion and drive a Ferrari, but I can also tell you I don’t think you’ll ever see him suddenly go bankrupt, he’s smart with his money and does what’s right for him.

You have to decide for yourself what risk profile you fall into. Having known Braden for years I can tell you he is in-between a medium and high-risk investor, he’s also without a doubt one of the single smartest people and smartest investors I’ve ever known. While six-figures might be your whole year’s salary, I’ll tell you, that’s not the case for Braden, he’s a serial entrepreneur and has many successful businesses under his belt, he can take these risks and if he loses it all, he’ll still be able to buy a mansion and drive a Ferrari…if that’s what he wanted to do.

But that’s not what Braden does. Instead Braden really has spent his life helping people. He’s an incredible mentor, a wonderful friend and a truly brilliant and proven investor many times over. And if I was Braden, I’d probably put six-figures into .WS as well, not because I think it would change my life, but because I would have made my millions by taking calculated risks like this.

So rather than using something like this to create feuds within our industry, let’s just be honest. Some of us are safe investors, and that’s okay. Just remember, it’s guys like Rick and Frank that have made this industry what it is today, and guys like Braden might invest differently than you, but that’s okay, just know what kind of investor you are and stick to your guns.

Just remember, this is a small industry and we’re all in this together, so rather than attacking one of our own, let’s grow up and realize that we’re all much more similar than we are different.

{ 12 comments… add one }

  • Ali Zandi February 29, 2016, 10:44 pm

    That was incredibly well said, man!

    Reply
    • Morgan March 1, 2016, 9:14 pm

      @Ali – thanks for the kind words

      @Samit – agreed

      @Joseph – sorry but I’m confused…is it an advertorial or an opinion? I haven’t seen Braden blog a lot, I think he was just excited about an investment he made, not sure why .WS would pay him to write a post on someone else’s blog…especially when that someone else isn’t an investor in .WS…

      Reply
  • Aaron Strong February 29, 2016, 11:10 pm

    “Just remember, this is a small industry and we’re all in this together, so rather than attacking one of our own, let’s grow up and realize that we’re all much more similar than we are different. “…………..I guess we don’t have to wonder why it’s a ‘small’ industry, in a very big world.

    Reply
  • Rob Monster - Epik.com February 29, 2016, 11:25 pm

    Thanks Morgan. This is a balanced assessment.

    I have avoided commenting on this topic. I have gotten to know Braden pretty well since 2010 when Braden joined the Epik Board. In short, I would not bet against Braden for a couple of reasons:

    1. Braden is exceptionally good at making money on the front end of the deal, i.e. by not over-paying, particularly when buying in bulk directly from a registry as was the case here. Rest assured, he did not over-pay.

    2. Braden is very charming — in a good way. Alan Ezeir of .WS is a long time Braden friend. Alan will no doubt benefit greatly from Braden’s ability to spread the word. To the casual observer, Braden can come off as being a shameless self-promoter. Most of the great entrepreneurs — Sir Richard being just one of many examples — were very effective self-promoters. The reason they were effective is because the audacious sizzle was backed up with enough substance that the sizzle was appropriate.

    As for the various other comments made in other blog posts, domain investors should realize that when a smart guy with an abundance of investment opportunities goes big on a domain investment, that is a good thing for domains in general, whether .COM or not-COM. The last thing domain investors should do is torment such a person. When we do that, we look like the cottage industry we used to be. Online real estate is on the cusp of becoming a respected alternative asset class. The Chinese domain boom of 2015 was just the latest evidence of what that looks like.

    Onwards!

    Reply
  • Dietmar Stefitz March 1, 2016, 12:41 am

    He’s an incredible mentor, a wonderful friend and a truly brilliant and proven investor many times over. This is the best description of Braden! Thanks Morgan!

    Reply
  • Samit March 1, 2016, 2:49 am

    He spent his own money on stuff he wants to buy, don’t see why anyone should have their knickers in a twist over it.

    I bought 4 figures worth of .ws keywords in 2009, when there was 0 interest in it and have done ok, nothing spectacular, but it wasn’t a loss either.

    Will numerics and chip lllls fly in .ws? We’ll find out in a year or so, won’t we. I listed my last 10 premium keywords on NamePros, so I’m moving in the other direction.

    Reply
  • Joe March 1, 2016, 3:51 am

    Thank you for your post Morgan,

    Well I think so small that became as an investor, I admire the risk of Rick and Frank they play their cards as a game of poker open future was on their side were different times.

    Braden is a person who can get everything no more to say.

    Elliot is not very conservative’ve never tried but their responses No Thanks! is not the best thing pudes expect from such a person, Rick Schwartz gave a brief answer in good and bad, much more to explain and help.

    Finally these you are the average investor from 2007 until the arrival of FM you go and come back to come by 2 cents now do not know if investing in these domains, or fashion.

    I do yesterday and your answer meaningless what today see domains again today.

    Final conclusion: the three investors domain your friend write I stay with that dares to risk because life without risk can not live and just sit in the living room of your house to live for only six figures a year.

    Surely he has a lot more money, of these in the world before and the current are told multi millionaires who do business by phone from his private jet traveling and that is your office, this is not life, the only risk you have is that must skydive to failure of the engine of his private jet.

    Reply
  • Braden March 1, 2016, 8:04 am

    Morgan – Thanks for the kind words. You’re giving me more credit than I deserve. 🙂

    Reply
  • Joseph Peterson March 1, 2016, 3:11 pm

    Granted, people pursue different strategies, some riskier than others. Yet all domainers, regardless of their budget, take risks. Crazy risks sometimes. Prudent minimal risk for Elliot. Acceptable risk in Braden’s case. New domainers take the biggest risks … and usually fail.

    There is more risk in acquiring a premium .COM for 5 or 6 figures than in paying $150 per 3-letter .BIZ with an aim to flip those “CHIPs” in a liquid market right away. And there’s far more risk in buying 5-character .WS than 2-character .WS.

    Right now, it’s the Chinese betting on the longest odds – picking up hundreds of thousands of 6-digit numerics and CHIPs in nTLDs like .SITE, .RED, .XYZ, .PET, etc., paying less than $1 apiece and (crucially) with no budget for renewals next year.

    But talking about risk in this case is a red herring. Overwhelmingly, domainers admire risk taking and success. Nobody faults Braden Pollock for diversifying his portfolio with something risky. It would be inaccurate to imply that domainers do.

    Yes, domainers routinely express skepticism about untested TLDs … as well as past flops like .MOBI. Really, that’s a good thing. It makes quite clear what’s risky and what’s reliable. Mixed opinions are much more useful than silence. Especially for newcomers.

    Really, the backlash Braden’s article received has nothing to do with risk tolerance … nothing to do with .WS itself even. The initial public perception was that Braden had written an advertorial. Furthermore, people had been told by Shane Cultra that there existed a “.WS team” of prominent domainers who were collaborating with him and the .WS registry to promote .WS. When a list appeared of bloggers and brokers who’d bought stakes in .WS, domainers naturally assumed this was that behind-the-scenes “team”. Bracing themselves for pump-and-dump hype, many domainers assumed Braden’s article was just the tip of the spear.

    Now, that idea may be entirely wrong. Despite Shane’s boasts, which backfired badly, there may be no “team” at all. Both Braden Pollock and Andrew Rosener have denied involvement with the registry. That’s good enough for me.

    My point is simply this: A perception existed that prominent domainers were beginning to hype .WS in order to incite buyouts that would pump up the value of their .WS positions. That perception may be incorrect, but it was legitimate to raise the issue. They weren’t bashing Braden for his private investment. Rather, they felt that the “establishment” was betraying their trust. Domainers have been scammed by “bigshots” before – quite recently, in fact. So if people in the community are touchy, disgruntled, jumpy, cynical, it’s not hard to fathom why.

    Let me emphasize: We don’t need to agree with somebody else’s viewpoint in order to understand their perspective and frustration. This was never about risk tolerance. It was about 1 risk – the risk of exploitation. We do domainers an injustice if we dismiss their concerns.

    Reply
  • Eric Borgos March 1, 2016, 4:41 pm

    I registered a bunch of really good one word .ws domains when they first came out (around 1998 I think). I kept them for a few years but let them expire eventually because there was no market for them at the time. It is interesting that 20 years later they finally might have worth something.

    Reply
  • Joseph Peterson March 1, 2016, 9:33 pm

    @Morgan,

    Braden has been quite clear that he wasn’t paid / paying and says that he didn’t regard his article as promotional in nature.

    Elliot was simply giving a friend the opportunity to discuss a large investment that readers would (and certainly did) find interesting.

    Unfortunately, Braden’s article followed statements by Shane Cultra suggesting that multiple big-name investors were working for the registry as part of a “team” to promote .WS. Consequently, it looked as though Braden and others (yourself included) were tapped by the .WS registry and might have a sales-pitch agenda.

    Even unpaid, Braden might make money if his article induces .WS buyouts, which would prop up the value of earlier shorter .WS domains. Personally, I trust Braden is telling the truth when he says he was simply writing about what he’d bought. But there is always ambiguity in such things.

    Reply
  • Rod March 20, 2016, 5:22 am

    “Rick Schwartz was a high risk investor”…!!

    It would have been a far more appropriate statement to make if you had said “Rick was a visionary investor” knowing that you are well aware of what types of domain names he put his money on – The man must have been a million years ahead of the game – if he’d been operating in any other industry with the same skills and efficiency, he would have been praised like a God even more so than Warren Buffet has been up to now.

    Reply

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