There’s a gold rush going on. Get ya some of that!
I was recently running on my treadmill — because it’s the middle of winter here in Seattle and there’s snow on the ground — and I had this brainstorm, so I’m going to share it.
Maybe the night before I was watching Gold Rush, the television program on the Discovery Channel, so it was stuck in my head. I’m not sure. But here goes.
Two types of domain name investors: 1. Prospectors 2. Miners
Mis-classsifying yourself as either of them will leave you unsatisfied, unfulfilled, unhappy, and — most importantly — without money in your pocket.
Prospectors go out looking for the rich veins of gold to turn into gold mines. They’re searching, looking for changes in rock formations, exploring, putting their money in harms way packing up their tools, mule and heading out into the great outdoors looking for gold.
The miners are the people that came in once the prospectors had found something. They’re the people that worked from sun-up until sun-down, digging holes, looking for bedroock, and separating the gold from the ground.
How well they did, how much gold they put in their pocket, was a function of how efficient their processes were.
Heck, if they could have used automated sluice boxes like miners do today instead of having to pan for gold, they could have increased their throughput by 1,000 — 10,000 times an hour.
Now in domain name investing, you have the same type of situation.
Domain name prospectors are the ones looking for opportunities. They’re following the trends and act faster than anyone else. They find an opportunity, maybe drones, recreational marijuana, autonomous cars. Maybe it’s in established and upwardly trending areas like three letter .coms, or four leter CVCV brandable domains.
Often, prospectors will go to each website, look to see if the website is outdated or not operational, and they contact the owner to make an offer. Prospectors LOVE it when they get a bounce-back email because that’s opportunity. Lots of other prospectors likely sent emails and then walked away when they got a bounce-back.
But real prospectors find another email. Or they get on the phone and call. And they follow-up and they follow-up and they follow-up. And they negotiate. And they buy the domain name for under market value.
The person selling the domain is totally happy because they likely bought it for $10, probably paid $160 in renewal fees 16 years, and maybe they’re making 10, 20, 50 times their investment in that domain name. Plus, maybe they just want to be done running their website. They want to move on and put some cash in their pocket.
That’s the prospector. They find that rich vein of valuable domains. They buy low. They turn around and flip them because they know the market. They know there are miners that want to do the work, and the prospectors are in it for the thrill of the chase, the glory of the acquisition, and the fast cash in their pocket for the quick flip.
So let’s talk about the miners. The person who does the work, day in and day out. Looks at the drop lists because they already prospected and know what they’re looking for. Gets in the auctions, does the research to determine the number of companies that might be willing to buy it, does a ton of outreach, over and over again by emailing, by calling, by letter writing, does the negotiation, doesn’t take NO for an answer. Gets in there everyday and hustles.
Yes, the miner may buy the domain name from a prospector at a higher rate than the prospector paid, but they know they can put in the work and sell it for 5 or 10 times what they paid for it given time and proper marketing.
Now, you can have domain investors that get in there and do both prospecting and mining. It might be a little more work. Might take a little more time to find an area, segment, industry, focus where the domain name values are high. By doing both, they maximize their return on investment.
And that might take time. It might take money. Do you think the prospectors went out every day and found gold every time they dug a hole? No.
And they’re spending money by digging that hole that might have been a mistake. You’re spending money by buying a domain name that might have been a mistake, and later realize that it doesn’t have any resale value.
There are things that prospectors do to minimize digging holes where there isn’t any gold. The same thing is true for domain names.
What makes a gold rush? People rushing to do something. Where people can find gold, they have an opportunity to make a lot of money based on their knowledge, investment, time and energy.
More than 100,000 domain names expire every day and go to auction or are simply just dropped and available to register by the fastest fingers or computers. Just today, the day I filmed this, I picked up a single word surname used by 300,000 people in the United States and hundreds of companies. It was a 1989 registration, with only one owner. If you’re into collectible cars, that’s a barn find like you’ve never seen before.
So the first gold rush was actual gold. The second gold rush was physical real estate, and it continues today. And the third gold rush — that nobody understands outside this industry — is internet real estate.
And I’ll leave you with this: knowing yourself, what you like, what you’re good at, will help you be more fulfilled as you’re determining your area of specialization, and whether you want to be a domain name prospector, a miner or both.