#711: Andrew Rosener — Becoming The Hokkaido Scallop King, Leasing Blue Chip URLs, Life Tenets from Charlie Tuna, Selling 8-Figure Domains, and More

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3:46 To learn more. Or donate. Optimal minimal. At this altitude, I can run flat out for a half mile before my hands start shaking. And I answered your personal question. No, we're just seeing it kinda.

4:00 I'm a cybernetic organism, living tissue over metal endoscal. So Hello, boys and girls, ladies and germs. This is Tim Ferris. Welcome to another episode of the Tim Ferris Show where it is my job to deconstruct world class performers, to tease out the habits, routines, lessons learned. et cetera that you can apply to your own lives. And of course

4:29 I interview experts across a very wide range. of areas. They could be in the military, they could be chess grandmasters, they could be athletes, they could be actors, they could be CEOs. And in this case we have a polymath who one could argue was the king of Hakido Scallops. What the hell does that mean? Well We get into it in the conversation. He has an eclectic bio.

4:54 Andrew Rosner Andrew is the founder and CEO of Media Options, which has been the number one domain broker in the world for the last six consecutive years. We talk about a lot more than domains and his life trajectory, his adventures are Amazing. His mentors are characters to put it mildly.

5:15 Let's focus on the bio. Since 2008, Andrew has been involved in more than six hundred million dollars in domain sales and has played a pivotal role in numerous high profile domain name transactions, including X.com to Elon Musk, Zoom.com to Zoom, and prime.com and podcast.com to Amazon, as well as thousands of others. So we get into how this business works, what the ecosystem looks like, what best practices look like, what differentiation looks like. And we also talk about all of those things and how he cut his teeth in the seafood arbitrage business and in other areas. Andrew is an inductee of the domain name hall of fame. He was named Domain Investor of the Year by Traffic, and he is the creator of the Rosener Equation, which he did not name himself. It was named after him, a formula for objectively valuing domain names widely adopted by the industry. Andrew is also the owner.com. the industry's leading educational podcasts on all things domains. You can find him on Twitter at Andrew Rosener, R-O-S-E-N-E-R. And one note before we dive in, Andrew and I got into the weeds on domain valuation. We really got

6:30 into the technicalities, which is super interesting. But that discussion, because it was deep in the weeds, was moved to the end of this interview for Flo. So be sure to stick around. To hear Andrew's answer. related to how do you actually Determine.

6:46 an objectively defensible valuation for domain names. Fascinating topic, but it got quite detailed, so we moved it to the end of the conversation, so stick around. And with that said, please enjoy a very wide ranging conversation with Andrew. Rosner.

7:06 So I usually have Pretty good idea of where I'm gonna start these conversations. And I'm looking at this list and it's like a combination of memento. Meets forced gump. Needs globe trotting and

7:24 I'm gonna let you choose. So should we start with This will be very back and forth. We're gonna fast forward rewind. So we can start at any point, really. Charlie Tuna. Or Why you paid twenty five thousand dollars to buy fuckyourself.com just to get an email address?

7:41 Or Pilgrims. Where should we start? Whoa, alright. Let's start with Charlie Tuna.

7:49 because it inspires All else. Perfect. Who Hell.

7:55 Or what the hell is Charlie Tuna? In college, I studied Management information systems, which was basically a hybrid of business and computer science. I chose that because quite pragmatically as I am.

8:09 It was at that time in nineteen ninety. Mid nineties, the highest paying job out of college. And so I said, Well, that's what I'm gonna do. So I did that and I started a software business in East Hampton, as a matter of fact. And I

8:25 Quickly realized that it was not what I want to do with my life. And so I then subsequently graduated a few months later. I have to come to that realization with a degree in something I didn't want to do. And I had no idea what I was gonna do with my life.

8:39 And I got a call from so called Charlie Tuna. A very, very close friend, somebody I would call a mentor, and an extraordinarily unique individual on this planet. Peter Murkey. So I get a call from Peter Murky. And Peter says, Do you want to come sell fish? How did he get your name or number? So

8:58 Peter contacted University of Rhode Island, where I went to school, I contacted the business school and he said, I'm looking for an entrepreneurial Go get her to Become my mini me. And Peter wanted to retire and he wanted to train somebody that had not come from the seafood industry.

9:15 That's what we call foreshadowing, folks. He wanted to train somebody to basically take over the business in his own image. And I was the chosen one. So anyways, I basically told him to go pound sand and and then at the that point he offered me a thousand dollars to come hang out with him for the day. In Newport, Rhode Island and

9:35 I did. And it was kind of like Love at first sight, I just we hit it off. I walked into the office in a business suit with a tie on and a briefcase, my resume in the briefcase. And you know, the secretary let me into his office.

9:48 And he had his feet up on the desk and he was blowing out a bong hit. And he looked at me and he said, If you ever come in my office in a suit again, it'll be the last time you ever come in my office. What was he wearing? He was wearing a Like a native American Pancho.

10:05 Type of thing. And he's got, you know, long hair with a ponytail and this Unique beard that Only Peter could carry. But he you know, he he's a brilliant man. He he's a Stanford grad, he's an old hippie.

10:18 And he just has a unique perspective on the world. I've never encountered anybody else. That sees the world the way that he does. And I think it was probably the most important event of my life because

10:31 I'm ambitious and I'm aggressive and I'm Yeah, full of energy and ready to go. Tear the ass out of the world. But without Any real direction.

10:41 Isn't always the weapon suited to the task. Absolutely not. Absolutely not. But at that age, you know, it's better than nothing. Yeah. And Peter was Very good at harnessing that and pointing it in certain directions. Directions that were Beneficial too. Yeah. So I went under Peter's wing and and I spent eight years in the seafood business, the frozen seafood business. I traveled the world.

11:04 I negotiated with I couldn't even imagine the number of different countries and the types of people. I literally did business with some of the worst people on earth. You know, the fish business is a cash business. Basically worldwide. And so it lends itself to certain

11:19 elements. It was just an amazing life experience. So walk me through What it looks like, let's just say your first week or month on the job. Like how is the compensation set up and what are you actually trying to do? So my first day on the job, I come into the office, obviously no longer wearing a business suit. And I sit down at my designated desk. Now there's only about

11:39 I don't know, at that time four or five people. And so I sit down on my desk. And I don't know, an hour or two later, Peter comes out of his office and he comes over to me. And I'm basically sitting there doing nothing. I've got some reading material that somebody's given me to uh look over.

11:53 And he he walks over to my desk. And he pointed a poster on the wall that says exactitude. And Do you know what that means? Listen. No.

12:03 And he said, Have you ever read the book? Atlas shrugged. I said no. Have you ever heard of it? No.

12:09 Yeah. Do you know who Ayn Rand is? I said no. Went into his office. Without saying a word, Windows Office got a copy of Atlas Shrugged.

12:18 Brought it back to me. He said, Go home now. And I was the point where he's like, Go read this book, don't come back in until you're done. So I literally I went home and I literally took about Five days to read the book. It's a big book. It's not a short book. No, it's not it's a big book. And it's not easy reading either.

12:33 Least the first like two hundred pages. It's like a two hundred page intro. And so I Read the book? I came back in.

12:40 It was kind of like a fifth grade book review. Um I don't know, I guess I passed, that was it. And then and then it was like okay, look. Come with me. And he took me down to New Bedford, Massachusetts, and drove me around to these different scallop processing facilities, and I met some Absolutely crazy people.

12:56 Amazing, amazing people. These are just Truly, to this day. Like I I was just actually back in Rhode Island in September, the end of September. For uh Little memorial thing. And

13:08 I met up with some of these guys that I hadn't seen in a long time. And Yeah, it brought me right back. Really just amazing people. You just don't And I'm sure there's other industries like that, but but seafood is a really special Truly salt of the earth business and

13:22 Such a dichotomy from The business I mean today. In that boiler room, what did exactitude mean? Why was it on the wall? I think it means different things to different people. To Peter What it meant was

13:34 having the right Information. In order to arrive at the right answer. He did not like Knee jerk.

13:43 reactions. He didn't like Knee jerk answers or in precision. So once you've read Atlas Shrugged, which I'll admit I've not read, but I must I know. So Shame unto me. Once you've read that, you come back five days later.

14:00 At that point Is it some form of arbitrage? Like what is the business model? Yeah, basically. So What's remarkable is Peter's business is still going today. I think now it's forty Yeah, I think he started in nineteen eighty five, so roughly forty years, thirty eight years. He doesn't own a factory. He doesn't process. He doesn't own boats.

14:20 He's primarily scallops. There's other businesses. But it's let's say Core businesses scallops. And One hundred percent of his competition owns At a minimum they own the processing plant. Most of them own boats.

14:32 Most of them have, you know, joint ventures or partnerships with foreign processors, aquaculture, et cetera. And despite these seeming disadvantages, Peter has been nimble. And You know, he's kept his overhead low. And through the good times and the bad, he's just kept that business running and great times. Buying and then reselling?

14:53 Buying, putting in his packaging, in some cases. I don't know if we want to go into that today, but Yeah, what's called value add. We can we can skip we can skip certain details of they would say they're value adding. And repackaging and then you know, reselling. It's a pure arbitrage. So what was the annual turnover and I'm gonna

15:13 hop to a specific example. So what was the annual revenues Roughly when you started there. They were doing about seven or eight million a year when I started. And how did it grow? quite quickly we realized I was good at this game and

15:27 I became the vice president sales. And Think when we left we were about thirty five million. Okay. How do Which is a lot of scallops. Yeah, how do Hokkaido

15:37 Scallops fit into this picture. Northern Island of Japan, for people who may not know. Yep. So basically this is a Pure sales game, right? So I'm I literally have the equivalent of a phone book, but it's the who's who of the seafood industry. And I'm literally Making about

15:54 I don't know, 150 calls every day. And it's just Cold calling. Cold calling. And you're selling to distributors, to restaurants? No, no restaurants. Primarily distributors, other wholesalers, restaurant supply companies, cruise lines. So I say no restaurants, but large restaurant chains, which is Where we're going with the story, but Couple years in.

16:14 I Come across Benny Hanna. And I call up, you know, the Fort Lauderdale headquarters of Benny Hana and you know, you guys want to buy some scallops. And it's just pure luck that they happen to be

16:25 In a transition period where they'd been getting all of their seafood from one company. And they decided that they could get better pricing and there was other advantages by Put out of bed. Put out a bid for each individual product. Mm-hmm.

16:37 And so it was just great timing. And so I had the opportunity to put in a bid, and by any stretch of the imagination, I shouldn't have had any chance of winning the contract. But As fate would have it. You know, I did my due diligence on the buyer. And he was Nicaraguan.

16:55 By descent. And he loves cigars. And Peter happened to be a cigar connoisseur. And so he sent me to his guy. Who could basically source any cigar.

17:06 I said, look. I'm looking for An amazing, amazing cigar that if it happened to be from Nicaragua, might even give me an extra edge, but something that's gonna be really wow and he said, I've got a cigar for you now. I I couldn't even tell you what that cigar is. But it was a very expensive, very good cigar. I got a box of'em. So I flew down to Fort Lauderdale and I took this guy out to dinner.

17:27 And I gave him this box of cigars. And the fact that I knew he was from Nicaragua, the fact that I happened to know this I didn't actually know, but he thought I did this print of cigars. I nailed it. And so we had an amazing dinner and we drank way too much and

17:44 Ultimately I made this sales pitch about Hido Scallops. I said, look. You guys are using American scallops, okay? And American scallops are great. Arguably. If you're getting them Pure

17:56 Form which It's very difficult. It's the best in the world. However Pure form meaning like unadulterated. Unadulterated, you know, crab meat type of scallop. Yeah, yeah.

18:08 That that's the least your worries. It's the value adding part that that's not so You're eating guinea pigs. Yeah. The interesting part of this was basically American scallops are graded zero to 10, 10 to 20, 20, and that's basically zero to 10 per pound, 10 to 20 per pound. twenty to thirty per pound. But the Japanese, as they do Grade them much more consistently.

18:31 And so it's zero to two. Two to four. Four to six, six to eight, eight to ten. And that tightness of grading makes an enormous difference if you are a restaurant and you're trying to calculate your plate cost. Right.

18:46 You want your place to be consistent. You can't be that one plate has four scallops, one plate's got six. And you know, oh well, I've got this one giant scallop, and so now my plate cost is thrown off. So That inconsistency

19:01 And scallops are one of, if not the most expensive per pound protein from the sea. And so it makes a big difference. And so I basically made this whole pitch about No. You guys can have consistent

19:15 Plating. Consistent. Plate cost. And you know, there's a lot more to it, but that message resonated and it Close the deal and I got the contract and it literally became our largest client and I supplied all of Benihana.

19:27 Worldwide, all their scallops. And I subsequently became basically the world's leading expert on Hokkaido scallops. Was it a known fact in the industry that Hokkaido scallops had these advantages? Nobody cared because they were taking the packaging that came from Japan and they were just

19:44 repacking it into American Standards right and so It was just another source, just like we got scalps from China, we got scalps from Chile, from Peru. It was just another origin. High quality.

19:57 But The grading wasn't a selling point. I mean I have some we've spent a good amount of time together, so I've some Guesses but rather than guess. What do you think made you good at this job?

20:11 I'm not afraid to sell. I think it I have to start there is that I took it for granted that Oh, hand me a phone book. I'm gonna start making cold calls. I'm gonna get on the phone with people. Try and sell'em something that they Never knew they needed. Never knew they need. I think that was a big factor. And then you know, I've got the gift to Gab.

20:28 I'm rarely at a loss for words. I'm very good at it. adapting to people and meeting people where they are. Whereas I think a lot of people in sales Are trying to bring somebody over to where where they are, you gotta meet the person where they are and understand what they need.

20:44 And then craft your message and craft it whatever it is you're selling. if possible, to meet them where they are for the need that they May Not even though they have, but you've identified. So I think that adaptability, you know.

20:56 Peter had Two nicknames for me, the chameleon. was one and crystal meth was the other. I have an extraordinary amount of energy and adaptability. So I guess I think a willingness to sell.

21:09 Without fear. And then you know that high energy To tie up a just a loose end here and bring this boomerang back. to the initial question for a minute. So is Bruce Wayne to Batman as Peter is to Charlie Tuna? Hundred percent.

21:26 They're one and the same. One of the same. All right. And Charlie Tuning, he was a squash player. Pior influenced me in ways way beyond business like His lifestyle.

21:38 I had never seen somebody with that lifestyle. What was his lifestyle? Well it was like Yeah. Again, you know, he's an old hippie. Who had been

21:47 You know, he was playing the long game. He had this little business and he loved it and it made You know, a couple million bucks a year every year and and you know, good times he made more and bad times, you know, maybe he made a million but it was it was a great business. And he'd just been chugging along, chugging along. He had no ambitions of scaling. You know, I came in on fresh out of college and business school and I'm like Well we can do this and we can you know automate this and we can tell And he's like, look, shut up, kid. Just

22:13 And he would take off he had Mm Go down to Belize for a month and he'd go, you know, eat a chalet on the edge of a cliff in the middle of nowhere in Gaspade. In way up northern Canada. And you just go up and hang out at this chalet and you know, watch whales break, you know, the surface.

22:31 And he just he didn't Aspire for the things. I guess at that time, you know, I you know, you you're you look up to these people that you think are successful and you think, Wow And you try to model the way that they live their life or the things that they Bye or

22:46 Marcus trophies of their success and Peter didn't have any of that. He optimized for what I would say is freedom. That's how I've sort of Digested it into my own life and what I've modeled.

22:59 He optimized for freedom. Anyways, coming back to your original question, I go off on tangents'cause I I he's truly. Yeah, so He got the Charlie Tune a moniker from his squash.

23:13 He was a competitive squash player. And that was his nickname was Charlie Tuna. And he got me to squash. So what are the Tenets of Charlie Tuna. I actually meant

23:23 Mm. Bring it because Thanks are like You know, mantras.

23:29 It's a few sayings that either he identified or people that he worked with or customers that he worked with for a long time. Sort of identified as things that he would just say. A lot. And they're just these short little phrases get a certain point across. He had ten of them. They were on the wall in the office.

23:48 I've expanded it to about fifteen. I still say the ten tenants of Charlie Tuna because it just sounds better, but You know, it's like I'm not Mother Teresa, I'm here for a profit. 'Cause you get customers and you they s they're like, Well, you know, can you do this for me? I really did it and it think well.

24:04 But I'm here for business. If I was here to make friends. Right. You know, we wouldn't be on the phone we'd be meeting somewhere for a for a beer. But I'm not Mother Teresa and I'm here to make a profit, unabashedly.

24:15 Or don't be backwards about going forwards. Or what does that mean? Well People do things in these roundabout ways, like Just be direct.

24:27 Just Say what you want to say. Do what you it is where you want to do. Don't You know, don't beat around the bush. There's one which I literally I've still to this day never understood, which was don't crowd the mourners.

24:40 I don't know what that one meant. Yeah, don't crowd the mourners. Okay. There's still some riddles unsolved. Yeah, yeah, yeah. That one I never got a clear answer to. All right. Feel like we were having sushi at one point and you were like something something like

24:56 In the whorehouse. Oh yeah, yeah, one of the better ones. Uh you can't run a whore house without any whores. I mean, all right, on its face this makes sense, but what did that mean? You know, in its original context, it's like If we don't have enough inventory We can't do business.

25:15 Because it's an arbitrage deal. So If I don't have what the customers we only have a limited pool of customers. Like we're not trying to be Walmart, right? So If I don't have what these people want. Then I'm just losing

25:30 Business. And so If you wanna run a scallop shop, you better have scallops. If you want to run a domain brokerage, you better have the best domains in stock. You know, it makes sense, but You'd be shocked if you look around and you examine failures.

25:46 How often that's the case? that people are trying to run a whore house without any whores'cause it generally they're trying to avoid risk, right? They're trying to de risk. I imagine some people listening would say, Well, hold on a second, like I keep wanting to call him Charlie, I guess that's fine. But Peter ran a really

26:01 Tight shop. Tight shop. he seemed to carry much lower overhead and fixed cost because he wasn't vertically integrated like these competitors. Which all makes sense, so They might then extend that to say, well, if you're running an arbitrage business, could you not identify the need and then source the inventory? Or you're just too slow. Like you've m you've missed the window. Missed the window.

26:23 Miss the window. You don't have it, it's a commodity, right? So you don't have it. The next call is, you know, your competition. Very little differentiation. It's a commoditized product. She must have to get pretty I I would imagine to make that work. And maybe I'm imagining incorrectly, but pretty

26:39 sophisticated with forecasting and Prediction and so on, because like scallops last I check don't last forever. So if you're holding inventory, it's not like you can sell the next so I don't know how deep down this rabbit hole you want to go, but That was one of our superpowers. Wise

26:54 And another way that Peter has really influenced me was Peter lived all over the world. Okay. He dodged the Vietnam draft and went to Namibia. And then He lived he's lived all over the world and he's traveled all over the world literally. All over.

27:09 Everywhere. And he had these relationships that were just the most absurd relationships. Everybody had crazy nicknames. And In Chile, in Peru, in in you know we had Pablo the catch. We had Mr. Lucky in China and we had Mikey the Iron Wrench. Crazy really like And he just knew these people and

27:29 He would call them up. And You just say, you know, what's it looking like in Peru? What's it looking like in China this year? What's it looking like in Japan? What's it looking like And every morning that was literally the first thing I did in the morning like catch type of catch. Or catch may not be the right term, but

27:46 Yeah. I mean a lot of these guys they came to appreciate Peter and his personality, he's truly a character. And the method. But you know, I would make these calls. I had a list of twenty people that I would call every single day.

28:00 And I literally wrote out a report of what that person said. Every single day and I presented it to Peter. Every day. And this isn't a fast moving business. And so generally speaking, whatever they told me yesterday is the same thing they're telling me today. And so it was It was redundant, but

28:16 What it did is it it honed a whole bunch of different skills. And it caused me to build a relationship with these people in a way that Peter had built over an extraordinarily long Period of time. And so it got them to trust me, it got them to know who I was, and it got them to share information with me that they weren't sharing with other people.

28:34 And most other companies had a more local centric focus on supply. So they knew what the catch was like in the North Atlantic. But they didn't know what the imported supply was gonna be from China or from Peru or from Chile, where there's these massive aquaculture operations that were just happened to be at that time really scaling up to match your

28:59 Now far surpass. The domestic supply? And that allowed us to understand. Where price was gonna go. When you say

29:08 You gotta have the horse to run the whorehouse. You'd have to have all of them. You just need to know that the guy coming in the door Wants a redheaded Whatever, right? And so I need to know that that the what the the thing that's gonna be short in the market is gonna be thirty, forty size scallops.

29:25 twenty, thirty size scallops. I need to know what's gonna be short. Because the stuff that's gonna be abundant I can get that readily. Ahí. We'll know the price readily. I won't get caught with my pants down on the price.

29:37 And so I can do what you were saying before, which is like what we call the back to back. But by having the stuff that's in short supply, I'm gonna get the business. Because I'm gonna have the thing they need. Even if maybe I'm gonna be a nickel or a dime hire on the stuff that you know, the other stuff that's abundant. I'm gonna be the guy that's got the right price.

29:55 on the stuff they need that they can't get from everywhere. And so that was really our superpower was knowing Where to fill the holes, which gaps. We're gonna give us That advantage

30:06 That would allow us To compete on the stuff we otherwise wouldn't have been able to compete with. We're gonna move from Tuna as in the namesake of Batman slash Charlie Tuna.

30:18 We're gonna move from scallops to Hamoney Barico. We're gonna move from food to food. Okay. Where does this fit into your life story? I did a semester abroad.

30:28 In Australia. Where I met my now wife, who's German. And while we were Dating, playing international love affair. She

30:38 took me to Majorca where I had Jamon Iberico. Pata negra, there's many different names for it. The Portuguese. would tell you that the pig are raised in Portugal and then Cred in Spain. You know, traditionally speaking it's people nodding in the room. Traditionally speaking it's a Spanish

30:57 ham from the black footed pig and at that time in the very early two thousands, it was illegal to import it into the United States. And when I tasted this with my wife, my now wife I was blown away. It was the best meat I'd ever had in my life. I couldn't believe it. And I was like, why don't we have this in the United States?

31:16 And I was in Yeah, the Seafo import business. So I thought I'm gonna import this to the United States. Backtrack to my college days, that was literally the emergence mid nineties, it's the emergence of the consumer internet. I took a class.

31:31 Learning about the internet. I thought wow. Domain names. Amazing. I started registering them because I'm

31:36 hyperactive and every time I had an idea, I'd get a demand for it. Not thinking that these would be valuable, but Anyways. Coming back. I thought I'm gonna get some domains for this Hamona Barico thing and I'm gonna set up a website and I'm gonna start importing this stuff.

31:50 So I got back to the US and that was my intention. I discovered that it was actually illegal. The FDA did not allow you to import this ammonibico because it's cured for 18 months. You know, it's a raw meat that's cured for eighteen months in salt. And like French cheese, the FTA didn't designate it as fit for human consumption. So you know, that was sort of that. And I I Put it in the

32:12 Closet and forgot about it. And then a couple years later. I'm driving to my office. And I hear on NPR radio that George Bush is about to get You know, the first Hamoni Barico ever

32:23 legally imported to the United States. And couldn't believe it. And I got to my office. And I found out who the importer was. And I called him up.

32:33 And, you know, started talking shop and I told them, you know, I want to buy a hand from him and he was like look kid I'm sold out for a year I basically have a monopoly or he had a monopoly You know, and these were like I don't know, seven, eight, ten thousand dollar legs of of ham at that time. And it's literally, you know, it's a whole leg. Buying a thoroughbred. Yeah.

32:54 And You know, so he was like, You have no chance. Forget it, get in line. And you know, we're talking shop and it came up that I had these domains and it was like his proverbial jaw dropped, and he immediately was like. How much do you want for those domains? And it was the first time

33:11 Like I said, I d I bought a lot of domains at that point already, but never thinking, oh, these are valuable assets that I'm going to sell in the future. It was always like, oh, this is another lame-brained idea that I'm going to try and build a business around that I never got around to. Um I didn't even know what to answer and so I said well I

33:28 Want one of your hands. And he goes, No problem, done. And I was like, Oh wait, that's too easy. And so I was like, Uh and five thousand dollars. And he's like Done. I was like, Well

33:39 You know, that ham's gotta come from that first container, you know, George Bush's container. And he's like done. Oh wow. Okay. And you know, I kinda was like All right.

33:47 Yours. And so, you know, I had a few of these domains and I transfer the domains to him on the spot. And uh at that time I had no idea how to do a domain transaction. And so I just Took the leap of faith, transferred him to the mains. Couple weeks later I got a coffin in the mail. And uh you know, the rest is history.

34:03 That moment then gave birth to my whole domain business. I realize it just You know. Esoteric.

34:12 corner of the world. You know, if this guy wanted his domains that bad Every business in the world is going to want or need their respective domain names. And so, you know, at this point I'm still in the seafood business and I I Was making it

34:28 Quite a lot of money for somebody in their mid twenties. And I just started backing up the truck and Time. As many domains as I possibly could. Now

34:36 Where or when this test Diaz? Another picture. Testiz worked for GoDaddy. And Go Daddy at this time. And early two thousands.

34:47 They launched what they called The executive department or something at that time. They looked at their accounts and they were like, Wow, some of these people have like thousands of domain names. Let's reach out to them and figure out what they're doing with these domains. And so they set up this little department with a few people. And you know, their job is to reach out to these people that had more than a thousand domains and figure out what they were doing with them. And Most of these people knew what they were doing with them. They had a purpose. I did not.

35:13 So anyways, Tess called me and I was actually in my car. I was driving up to my good friend JB's house up in upstate New York. Quiet please farm. And I had a lot of time. And so she called me and she said, You know, what are you doing with all these domains? And I was like, I have no idea. I every time I have an idea, I buy them. And

35:32 She said, Well, you know, there's like a domain industry and there's people trading these things and you can monetize them and I had no idea, you know. Tell me more. And so literally I spent like three or four hours on the phone with her.

35:45 Getting a download on That there's a domain industry. And Yeah. market and there's people on forums talking about these things and

35:54 There's different ways to, you know, park them and monetize them and Google will pay you for the clicks and Anyways, this was this was all new to me. But it was fascinating. And so I Then spent. Weeks.

36:06 As I do. Deep diving into this new world of domain names. And I got super fascinated. At this point I'm married and my wife thinks I'm crazy. In fact everybody thinks I'm crazy.

36:19 'Cause I've now spent a considerable amount of money buying domain names by that point. And Basically, when I got married, my wife said, Look, I'll live in the United States for four years and then The shot clock. Is up.

36:33 And then we're moving somewhere else. And The shot clock ran up. And it sort of ran up at the same time that I was go doing this deep dive into this

36:41 Domain world. And what I realized was There was nobody playing matchmaker between the people that had these domains, fascinating characters, right? Like literally, you would be hard pressed to find an industry that has such a motley crew of extremely successful and Pipe um Variety of standards.

37:01 People, but from just wildly different backgrounds, wildly different interests that have stumbled into this industry in completely different ways. And I decided to basically build a domain brokerage business to play matchmaker. And There was people trading amongst themselves.

37:20 Kind of playing hot potato in the domain industry. But there was nobody taking these domain names and selling them to the end users that ultimately could benefit most from them. And more importantly, playing educator. Between

37:34 This nascent asset class. And The broader business environment that I think recognized like, oh, this is an extension of our brand, but didn't understand why these things might cost so much and why they're so valuable and

37:48 Benefits of owning them. And therein was born media options. And uh my wife and I founded it together and I think it was maybe a year or two later that Tess Became my account. Rep, uh, go daddy, just you know, going full circle here.

38:04 And then ultimately left Go Daddy to come to work for me. And I went from a lone ranger to plus one. And Shortly thereafter, you know, we moved to Pama. We left Rhode Island.

38:16 and move to Panama. Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by AG1, the daily foundational nutritional supplement that supports whole body health. And I do get asked a lot what I would take if I could only take one supplement. And the true answer is invariably AG1. It simply covers a ton of bases. I usually drink it in the mornings and frequently take their travel packs with me. On the road. So what is AG1? AG one is a science driven formulation of vitamins, probiotics, and whole food sourced nutrients. In a single scoop, AG1 gives you support for the brain, gut, and immune system.

38:56 So take ownership of your health and try AG1 today. You will get a free one year supply of vitamin D and five free AG1 travel packs with your first subscription purchase. So learn more, check it out. go to drinkage one dot com slash Tim. That's drinkage one, the number one. Drink AG One dot com slash Tim. Last time, drink AG1 dot com slash Tim. Check it out. I If we take a thirty thousand foot view for a second, for folks who are unfamiliar with the

39:30 Domin. Slash domaining world. And I would put myself in that category. Maybe I know the edges of the puzzle, but I really don't know what the entire thing looks like at all. So There's an aftermarket. There are auctions. Exprees. Dnjournal.com, dnforum.com, domain namewire.com, expired auctions. Can you just give us

39:51 An overview of what that world looks like. What are the main pieces, the main Positions, so to speak. Like any market, it has a structure. There's a clear texture and structure to the market. You have

40:06 Let's say at the lowest level, you've got Guys that are just really appreciate domain names and they're investing in domain names. Maybe they're hoping to strike it rich, like a lottery ticket, maybe They're like me and they just have

40:19 eccentric ideas and registered domains around them. Maybe they drank too much and Thought they had a clever idea that they regret in the morning. But You know, there's just people that are sort of collecting domain names. And then you've got people that are really taking it seriously, investing into domain names, and they've got vary methodologies. Like I've got

40:36 One of my very good friends, Yani, is super methodical, he's a robot. He's got algorithms that There's very little emotion or anything that goes into his formula, whereas I'm kind of the opposite. I'm basically a hundred percent on instinct. And then I back it up with data. But

40:52 I primarily am operating from instinct. But either way. We utilize Primarily the same tools as like the SEO industry to sort of Gauge what

41:03 The total addressable market of these domains is. And so there's a whole bunch of different tool providers in the domain industry to sort of uncover who owns a domain. trying to evaluate a domain based on a bunch of data points. But Different tool providers. Then you've got forums where these people meet.

41:20 Less today, it's less relevant today. I would say Twitter is kind of the X. Another segue we can go down. X is really where the material domain world is meeting these days. And you know, there's just a lot of there's investors coming out of this from a lot of different angles. And then you've got, you know, some of the names that you mentioned, domain name wire, DN Journal.

41:40 I would say those are the two most prominent They are covering the news. These are our True journalists for the domain name industry. And they're talking about, you know, policy changes, you know, domain names are governed by ICANN, which Is the

41:56 multi stakeholder, non governmental organization that basically governs domain names. And Remarkably important organization, by the way, that very few people know even exist. And more people should know.

42:09 That they exist. But There's all these different layers, right? And okay, and then You've got as the industry evolved through the late nineties and then the early two thousands. These good domain names get

42:20 What we call type in traffic. It's just inherent traffic. People Just inherently go to these domain names. Prime.com. Yeah, prime dot com. You know, people want to go to

42:30 Prime at Amazon, they just type in Prime dot com. And you know, we helped Amazon to get prime.com For that very reason because Tens of thousands of people were going to Prime Dotcom every day and not finding Amazon. And so If you own these domains, though, you can park them with

42:47 Google or Yahoo on their parking feeds. And you know, they display Keyword. Advertising and then when people click them you earn Couple cents, sometimes more.

42:58 And at scale, that can be, you know, considerable revenue. And that used to be the primary business model in the early two thousands. was capture that traffic. Hope it leads to click throughs on your advertising and then get paid by Google at a hundred percent. Just out of curiosity, because I know I'm not the only person

43:18 Who knows what it is now. I'm not giving a real example, but I'm typing something like Google really quickly. And I type an extra O. Google Three O's. And I land on that page. How much do you think the owners of

43:31 Some of these misspellings. Okay. I'm gonna pause for a second because this is a really important point that I wanna make. I would Say like if your audience got one point from me today, I really want it to be this. There is a very

43:45 Clear distinction between A domain investor and a domain squatter. The guy that owns Google with three O's? is a squatter. He is the person, he, she, whatever. is the person that gives

43:58 The domain industry a bad rap. In the late nineties, in the early two thousands, that is worn off. You know, it's still Resonates. mostly worn off at this point, but in the early days of my business, that was the biggest hurdle was like

44:12 But you're just a dirty domain squatter, right? It was like The fact that somebody was an investor in domain names was a a negative connotation. And Funny enough, some of the biggest domain investors are, you know. famous VCs that are funding the companies that are accusing domain investors of being squatters.

44:28 But anyways. Really? Oh yeah. Spread sheets full of domains. More targeted, super high quality, you know, maybe tens of domains.

44:40 But really high quality. Are they holding them for Portfolio companies or are they looking to you know, I don't know. I don't know. Can I play stand in for the listeners for a second? Sure. All right. So this this differentiation, I think, is important to

44:55 Underscores. So squatter versus investor. Yeah. Do investors still buy URLs that represent trademarks owned by other people? And if so, how is that reconciled? There's always gonna be bad actors, but it is a very, very, very small fraction of what it used to be. We've got

45:12 Cyber squatting laws now. It's quite punitive. Hundred thousand dollars. If you get student in federal court, it's a hundred thousand dollars per name. Penalty. For infringing on somebody's trademark cyber squatting. There are also

45:25 much cheaper, faster, and easier mechanisms for recovering domain names that infringe on your trademark called the UDRP, Universal Domain Resolution. Okay. Basically there's three elements and if you could prove those three elements the domain is gonna immediately get transferred to you. Okay, and it's gonna only gonna cost you about

45:42 Let's say Twenty five hundred dollars, maybe three grand if you go for a three person panel. For this arbitration. And they're gonna Make a decision.

45:51 The owner gets to respond if they choose to. And in most of these cases where it's a clear trademark infringement, they they don't even respond. And then that's it. You're gonna get to the main name. And you don't need to know the identity of the Holder. Nope. For that. Nope. You don't.

46:07 Got it. And so there's very strong mechanisms both preventing And let's say clearing the market. There's Very little upside.

46:15 to doing this anymore. And so like I said, they're still bad actors, but it's a very small problem compared to what it used to be. When did you Put up your shingle. And start the company.

46:26 Two thousand eight. Okay. I'm no historian, but two thousand eight. Doesn't sound super early. in the domain of the game. Which makes it more interesting to me. Cause it's not like

46:40 Day one of Google AdWords where you're shooting fish in a barrel, right? It's there's a point in time where it was like, Oh yeah, we can just look at the dictionary and go buy a bunch of dictionary. But at this point It would seem like you're buying Or matching, or both. Maybe you could explain. the business model then, what it looked like.

46:59 Which is incredibly interesting because it raises the question of how to value. Or how to determine a reasonable price. acceptable purchase price. Mm-hmm. And I wouldn't know how to begin doing that for something like X. Nor would almost anybody else. Like X.com.

47:15 Right. I don't know who would use it for what. I know it's single letter, okay, but could you walk us through What the business model was at the time, you're coming in Clearly not too late. But

47:29 Certainly. low hanging fruit. Most of the low hanging fruit have been a lot of them removed. Mm. Mm. Right. And so then how do you determine a fair price?

47:39 Uh Can it? Taking a wild guess here, but it's you know, just For emphasis. It's Literally probably ninety five, ninety eight percent of our business is

47:47 Domain names that were registered prior to 2000. Okay, so In two thousand eight, when I You know, as I said, hung up my shingle and started the business. I am super late to the party.

47:58 Now I have started accumulating some domains, but most of them weren't really great. At that point. But what I I understood that it was going to be a very capital intensive business. And I had already spent a lot of capital. And if I want to continue this hobby, I needed to generate cash flow.

48:16 Support it. So that was one of the premises of starting media options. So then That premise worked. We started successfully selling other people's domain names using our commissions. to then fund the acquisition of Better domain names for the side. So people would come to you and say, I have

48:36 Fill in the blank. Oh yeah, I mean you're talking dot com and I would like to sell it, but I'm not sure how to do it. A line out the door, right? So There's a handful of domain investors that understand what they've got. And they have no real eagerness or intention to sell Except when somebody makes them.

48:54 But everybody else Is literally They By the main. And they expect it's gonna sell the next day, right? And so

49:03 Anybody that Can help them achieve that unrealistic objective. They are banging on the door. So I get so many emails every day of people that want me to sell their domains. So Endless supply of inventory to sell.

49:17 So I start Banging on doors and Basically playing fake it till I make it because nobody really done this before.

49:23 How did people find you at that point? Most of the people that own the domains I'm selling at that point, that's no longer the case, but at that point Most of the domains that I'm selling are owned by domain investors, right? And so I'm meeting these people on the forums. Uh there's the in journal, which does this weekly sales report. And so today I'm like The most discreet person you're ever gonna meet.

49:45 But at that time trying to build a business, I was, you know, every time I make a sale, I would announce that sale. That would get published on the forums or Yeah. It get published in Dean Journal that were sort of a source of pride was like, Oh, look, my sale got published in Dean Journal this week. And people would see that you sold a domain for a good price and then Double down on, you know. So that was how the people that own the domains were finding me. Finding you, got it. And I'm finding the people that I was trying to sell them to. Okay. Very rarely are they coming and finding me. It does did happen, right?

50:14 Lightning strikes and Do you still remember any of your initial Sales where you're like, holy shit. I think this could be a thing. The cell where I thought

50:25 Wow, okay, I'm really, I think I'm gonna be able to make this into a business was pizza.net. Okay. Okay. Uh which is this is a great example because it seems like there are a lot of people you could potentially sell that to. So walk us through pizza.net then. Pizza.net was a unique case. Pizza.net was a very famous domain because It was highlighted quite prominently.

50:48 in the movie The Net with Sandra Bullock in nineteen ninety four. Really? Yeah. So in in this is a nineteen ninety four movie, okay, and Sandra Bullock First time anybody has ever seen anybody order a pizza online. On the internet. Sander Bullock goes to pizza.net.

51:09 and orders a pizza online. And so Peter.net. Yeah, it's Man, it's another rabbit hole, but it was actually has prior art. on a whole bunch of patents. So Google

51:22 has the patent on Here's your IP. We're gonna provide you. You search for pizza, we're gonna provide you the pizza restaurants that are within a certain distance around your IP address. Okay. They have a patent on that. PC.net.

51:36 was doing that prior to Google filing that patent. And so PC.net technically So the company That owned pizza.net was doing that type of sort of proximity. Yes.

51:51 Yes, and so The p the company was gone. Okay, but the owner of the domain Which he's also a fascinating that's a that's another fascinating story, but I don't recall how he found me.

52:01 He was a guy that literally strung The internet cable up the entire east coast of the United States. So he literally put in the the actual hardware. That created the first

52:14 Internet network on the east coast of the United States. Adam, I can't remember his last name. Add him something. Put it in the show notes. And uh also put the rest of the tenets of Charlie Toon in the show notes for people who are wondering where those might be found. At the time. In the early nineties when he bought this domain.

52:31 Wanna say it was registered in ninety two. Mind you, most people didn't even know the internet existed till about ninety four, ninety five. regular home adoption didn't really happen till ninety six, ninety seven. But At that time in ninety two, ninety four. Dotnet was actually the preferred most people thought dot net because most of the people using the internet were

52:52 network providers. These were ISPs. They were, you know, it was a Read only. Or write only. It was mostly Tech not in the way that we think about it today, but like really.

53:02 hardware tech companies. that were utilizing the internet at that time, other than just putting up a splash page like a business card. And they were using.NET. And so You know, he had a lot of very, very good dot net domain names at a time when he could have registered

53:15 Any of them in dot com. He actually is is the guy that He originally registered You know, you brought up x dot com. There's three one letter dot com domains in existence. Okay, that's it. Three. It's ZQ and X.

53:29 But Adam Why are there only three? So I'll tell you the story. So Adam actually registered All other twenty three.

53:37 So numbers aren't allowed single numbers aren't just not allowed for security conflicts. prevented by ICANN from being registered. So he went and registered all the other one letter dot Com domain names. But because he wasn't using them, I can then decided, Oh, this is a bad idea. Nobody should be able to have these one letters.

53:55 And so they pulled back all but the three, which they grandfathered in because Nissan was using Z.com for their three hundred Z car, which is Quite popular at the time. I think it was Quest Communications was using Q. And Elon, as it were.

54:10 Was using X. At the time. It was actually originally owned by a lawyer. Elon bought it from him. Prior to merging with Peter Teal for PayPal.

54:18 So those three got grandfather in and the rest got pulled back basically, I guess I have read quite a bit about it. I I think the way I can was thinking about it was like, you know, maybe there was an element of security. You know, they're kind of a socialist organization, and so they probably thought it was unfair for any one company to dominate all a letter of the alphabet. But for a variety of reasons they Clawed them all back to the three. Yeah.

54:43 Pizza.net. So long story short, I sold pizza.net. I think it was for like a hundred and twenty thousand dollars at the time. Which, you know. Used to be a lot of money. And

54:54 You know, I earn probably a twenty thousand dollar commission on that. Probably the owner made a hundred thousand dollars net, more or less. And That was a lot of money for me. I had this mantra at that time. I had just left a job where I was making about four hundred, three, four hundred grand a year consistently. And I was twenty-six years old or twenty-five years old, whatever it was.

55:13 And I was making a lot of money, like Way more than any of my peers, and I literally jump ship. Moved to Panama, started this brokerage business. And I had a limited amount of savings because I had spent most of it on domain names. And I had a limited amount of savings and it was basically just enough for us to last one year.

55:31 I had this mantra of Every single day, five days a week. Every day I need to make$250. Profit. If I don't make two hundred and fifty dollars.

55:40 then I am already falling behind the eight ball. Like If I can make two hundred fifty dollars every day minimum, then my business will survive. How did you arrive at that number?

55:50 I calculated what my annual expenses were gonna be. In totality? And divided by, you know, the number of business days. And this is another thing. It came from Peter. It was like look Keep your expenses low.

56:02 All my competitors, they were doing sort of different things, you know, but they're all trying to be very technical about it and build scalable businesses and Lots of people and lots of technology and Huge overhead. And I had you know, at that time I

56:17 Basically no overhead. And so I was chugging along and doing whatever it took. Like I would give away a domain name just to make two hundred fifty dollars. That would say it didn't matter. Like Even if I knew I was doing something that was gonna be harmful to me.

56:31 Literally I was not going to end my day until I made$250. And if I didn't make it, which was very rare. The next day I had to make not double but triple. It was like Just punishment. It was like, okay. So

56:44 I really stuck to that and I I think that that was a very Powerful. Discipline for me early in that first year. In brief, because I know a lot of folks listening are gonna wonder why Panama. We originally plan to move back to Europe.

56:57 And you know, the sky was falling, and so we thought We really hated being in the US where it was really just being inundated with bad news all the time. And we kinda just thought, Okay, well It's gonna just kinda be more the same in Europe. Germany would have been the obvious next.

57:14 Step. We kind of said like okay. We really want to escape that environment, particularly because we're gonna launch a new business. I need some positivity. Like I don't What I don't need is like constant negative vibes around me all the time. The other thing was that this was we left in November and so it was like a

57:30 Get her. New England cold winter. Horrible cold. And I remember my wife got stuck.

57:38 She was driving up a hill and Providence and she got stuck. In the snow and

57:45 I can imagine the German curses. Yeah. And so anyways, it was like, look, we're doing this business that we can do from anywhere. And so let's go somewhere warm. And I was like, Yeah, let's go somewhere warm. And so we kind of explored all these different places. You know, we had visited a lot of places in the Caribbean and we'd gone to Central America and we'd You know, I had been to Panama actually couple of years earlier because of a friend of mine from college.

58:10 Was Panamanian? And invited me down and so Panama just checked a lot of boxes. It was on the US dollar. Most of my business was gonna be in US dollars. So that eliminated sort of the currency friction of Volatility. Didn't even think of that. Yep. That was big. That was a big reason. It was very safe. At that time, Panama was the fastest growing economy in the world from a GDP perspective. I think it was 13 and a half percent GDP growth in 2008 or 2009.

58:34 Whereas China was number two with like eleven percent? So huge GDP growth. Why was there so much GDP growth? So like banking sector or no? Well, yeah, so the banking sector was growing rapidly. The Panama Canal was Expanding.

58:48 And you know, we were basically Really? Let's say for that first decade of the two thousands, that was kind of peak globalism, right? It was like wow, everybody's doing trade with everybody. Yeah, I got sort of shortstoped with you know the financial crisis, but

59:02 Things were booming. So anyways, Panama ticked all the boxes. That was really why we landed on Panama. So you're in Panama. Pizza.net Holy shit, this is gonna cover a lot of two hundred fifty dollar days. Totally. Right.

59:15 This could be a business. It was super important that I was hyper focused on earning$250 a day. You know, you're gonna have a hard time really like Building a big business. If your focus is on making two hundred and fifty dollars a day, but it was critical for that first year. To have that small goal.

59:32 And be achieving it regularly. But then when I got my first like Bigger win. It gave me the ability to take a deep breath and then say like

59:40 Okay. I think this business is going to work. And I can start thinking Bigger. And

59:48 You know, I lost the discipline of like the two hundred fifty dollars a day, but I started hunting bigger fish. With The inherent confidence that came with achieving this discipline of You know, hitting these small targets. So hunting bigger fish.

1:00:01 This Then brings us back to the question of Valuations and acceptable cost. How do you think about this?

1:00:13 Andrew and I got into the weeds on domain valuation. We really got into the technicalities, which is super interesting. So be sure to stick around. To hear Andrew's answer. related to how do you actually

1:00:26 Determine. an objectively defensible valuation for domain names. Fascinating topic, but it got quite detailed, so we moved it to the end of the conversation, so stick around. What I wanted to

1:00:42 Ask about is something that people Might find surprising and this is A Note that I have in front of me. And I I was surprised to see startups in particular should not buy their domain name. They should lease the best possible. dot com domain name for their business with the option or path to buy later. Can you elaborate

1:00:59 On this? Yeah, yeah. Because this is a Big decision slash important decision slash Terrifying. risk for

1:01:10 A lot of startups. So I'm glad you said what you just said. Or they wait and then they get extorted as a strong word, but I mean they really get bent over the barrel because they purchased them. Actually the worst case scenario. Okay. Worst case scenario is that they no longer have a path to ownership. For their Exactly.

1:01:27 Brand match. Dot com. That's actually the worst case scenario. That's a much worse scenario than we have to pay some exorbitant fee to get our domain name. And I'll explain why. So

1:01:38 About Two thousand and fifteen. Two thousand fourteen, two thousand fifteen. We started seeing really like a parabolic rise in the value of domain names. I don't even know really what to attribute it to.

1:01:51 But there was a sudden sort of Inflection point where More and more investors. When I say investors, I mean really primarily VCs. As well as startup founders. And I think the startup founders part I understand that area around 2012, 2015. was sort of a lot of the guys that had a win.

1:02:13 Or Let's say might have had a win, but then didn't sell fast enough and the dot com boom happened. But a lot of those like early dot com Successes. were coming back for their second Shot.

1:02:25 in that sort of time period. Yeah, it's true. I can for sure. confirm that because I was in Silicon Valley at the time and a lot of guys who had their first wins like two thousand seven, eight, nine. Yep. Or maybe that's when they started a company and they had just taken some secondary off the table. So maybe they hadn't had an IPO, but they had they were flush with cash. And they were looking to build more things. Yeah, I I saw this a lot. Like anybody who's successful, they learn from

1:02:53 previous experience and a lot of them understood that Okay, I launched on this silly name. And I might have gotten lucky and been successful because the market wasn't crowded, but now the market's crowded, and now there's a million people that want to compete with me. And there's a lot more resources to fund those people that want to compete with me. And so I need a strategic advantage. That My competitors can't.

1:03:15 It gives me a moat. And a domain name. is one of those advantages. And so a lot of repeat founders, this is a trend that I see. First time founder.

1:03:24 Pushes back a lot on buying their exact brand match.com. They see it as a risk, as you said. Most people perceive it as a risk. What I would tell you is that it's actually a de risking. Well I wanna make sure we talk about leasing. This is why we're gonna circle back to this. Yeah, okay. No This is actually directly leading into the laser. Cool. Let me just to strongman this a little bit. If somebody is in a weak cash position.

1:03:47 I mean it could be risky. Two Overpay. In the early stages. Sure. But this is this is where it's gonna dovetail into the leasing thing. Okay, okay. Because I think regardless of the cash position that you're in.

1:04:01 Not regardless completely, but like within a realm. It's a better strategy. The leasing. Rather than an upfront, just all out. purchase. And so around that time, 2014, 2015, domain names really started to rise. And I was sort of telling why I attribute what what I attribute that to, but as the values started going up.

1:04:20 it became harder and harder to sell these things. There was less people that could afford to buy them. And there was some companies offering financing, but At very high rates. And not

1:04:32 Super attractive. to most businesses. And so I was trying to come up with ways to Increase the pool of

1:04:41 Potential buyers. And increase my Ability to Close sales. And so I thought well We're all

1:04:49 I say we're all'cause I you know, I also own a lot of domain names. We're sitting on these Domain names that we all know are really amazing assets. They keep going up in value, but They're so underutilized sitting in our portfolios. And really the whole parking thing, which used to be big business, like We used to make real money. from Google with parking, but around 2008, 2009, that started, you know, it's been a downhill slope ever since.

1:05:12 We used to get The Lion's share of the revenue now we get. Peanut. So as the values went up, sales got harder.

1:05:20 And I came up with this idea of like well Why don't I just Lease you the domain. I'll give you a fixed price option. So you have an exclusive option to buy this domain. Nobody else can buy it.

1:05:32 Even if somebody shows up and says You know, I'll give you ten million dollars to that domain that you, you know, lease to this guy for a thousand dollars a month. Nothing I can do about it. We use escrow dot com as One of our biggest partners.

1:05:44 It's a third party escrow service, which I would encourage anybody doing A domain transaction that's in my opinion the only Maybe you can use a lawyer, but other than that, it's the only safe way to conduct a domain transaction. And Used to be owned by Fidelity.

1:05:57 And then it was sold to a private guy. And then that guy sold it to uh Freelancer, which is a public company from Australia, Freelancer.com. They're the Sole owner of the company now. Anyways. We're gonna put the domain in escrow.com. That way No matter what somebody else offers me, no matter if I change my mind.

1:06:14 There's nothing I can do. Unless you as the person leasing the domain Breaches the contract that we enter into. There's nothing I can do. You keep making your monthly payments. Right off in the sunset, you might not even ever have to talk to me again if you don't want to.

1:06:28 Quick question. So with Escrow.com, who mediates a dispute where you say that. It goes to arbitration. Okay, it goes into arbitration. Yeah, and they third party arbitration. And they all they organize all that, or is that something you guys organized? I mean I am their number one. Client.

1:06:43 I've done hundreds and hundreds of millions of dollars in sales and knock on wood. I've never one time ever had a transaction go to arbitration. Right. I'm not saying but. Yeah, if it were. If it were.

1:06:57 It goes to a third party Forum. Arbitration Forum. And they will basically organize that. Because they're the ones holding the domain. Right. So they've they've got an interest in sorting this out as quickly and amicably as possible. And so they hold the domain.

1:07:11 There's usually a payment up front, which basically buys you an option, which in the you know, world of finance, like any other option, you have an option to purchase this domain at a fixed price for a fixed period of time. I generally default to five years. I think that's a great runway. Most businesses at a period of five years Are either going to Make it or break it. It's gonna be binary.

1:07:33 At the five year point. They know they've got a business. And they're raising either more funds or they're profitable or They've achieved some level of scale. But they either have a business or they don't.

1:07:44 And so at that five year point, they have and they can execute at any time during the lease. They can execute after the first monthly payment if they want to. But within that five year period. They have a fixed price option to buy the domain. Exclusive to them.

1:07:59 And then they have a monthly lease. And so generally rough Back of the napkin math. The way these things usually fall is like Somewhere around five percent Could be ten percent.

1:08:13 Mm. Bigger the value. Usually the numbers come down. The lower their percentage. Yeah. Yeah. You mean. Yep. So

1:08:21 The purchase option. And it's important that that the startup have some skin in the game. Oh I see. That's the initial Yeah. Option cost. Yep. Not the total cost over the five year No it's gonna be the initial

1:08:33 Option. Get some skin in the game, buy yourself an option, and then you've got a lease component. And the lease component's gonna be usually be like a half a point, right? So if it does that. option upfront payment act as a An advance in the case that you purchase? In most cases, yes. So generally speaking, we apply that option fee. Let's say that. You approach me, you want to buy a domain.

1:08:56 That domain is a hundred thousand dollars. We agree to one of these lease deals. Maybe you're gonna put five or ten thousand dollars down up front. And then you're going to Have a ninety or ninety five thousand dollar fixed price.

1:09:08 option to buy. And then you're gonna have a lease component. And the lease components are true lease. Payments don't go towards the purchase price. But it's, you know, half a point. So like if it's a hundred thousand dollar domain

1:09:19 you might be paying five hundred dollars or maybe a thousand dollars a month. So it's a half a point or a point a month. Which is going to get the owner of the domain, a very reasonable conservative rate of return of Call it, you know, five to twelve percent rate of return.

1:09:34 Which is gonna account for inflation and account for, you know, the risk. And you're gonna have the opportunity for less than it costs to keep your floor clean. to operate on your exact brand match.com from day one. And so that's the first element of de risking. is that number one, you're never gonna have to

1:09:51 Rebrand, which is a very Because of SEO, because of technical challenges, because of Word of mouth and a whole bunch of different things. A rebrand While you're

1:10:03 At stride. is very difficult to pull off. And it leads to All sorts of messiness. Generally speaking

1:10:11 It's gonna cost you somewhere between Complexity of your organization, between ten and forty thousand dollars per employee. to do a domain name rebrand. To move from one domain to another one.

1:10:21 particularly gets higher and higher and higher the later stage you are in your organization, the more complexity you have. So You are leasing the domain, you look like you're a serious business right from the get go. You're not Try this or get That.

1:10:36 So question for you on the sell side. Yeah because now I'm super interested in this because now I'm thinking, huh? Are there people who just have a stable of domains and they treat it almost like and this isn't a perfect analogy, but like a fixed income portfolio where they're like, I'm not in the domain selling business, I'm actually in the domain leasing business. Yeah. But to run the math on that model, if you were in that position. you would wanna know what percentage just so you can forecast properly, you'd want to know roughly

1:11:06 what percentage you would expect. to convert to buyers at the five year point. Do you care though, really? I'm curious what it is. Okay, so This is literally one of my favorite topics.

1:11:18 This was part of the whole revelation of creating this was I was sitting back and I was thinking to myself, like all right I've got about 5,000 really good domain names. Let's just take the top five hundred. These would all be domain names that at an absolute minimum you're talking about a hundred thousand dollars, and that would be cheap. So a hundred thousand dollars and up, some of these are eight figures. Some of these are seven figures, some of these are mid six figures, blah, blah, right? But a hundred thousand dollars to many millions of dollars in value. the price I would expect to sell them for. If I just took the top five hundred domain names and I

1:11:50 Let's just say I'm giving them away. I'm gonna give away all of them. For Five hundred bucks a month. That's two hundred and fifty thousand dollars a month.

1:11:59 in totally passive income. And when I say passive income, like You'd be hard pressed. to find more passive income, right? Because Not like a real estate portfolio where like

1:12:10 You gotta once in a while you gotta you gotta fucking deal with it. Yeah, you gotta deal with broken pipes and electricians and you gotta you know, you got local and state Real estate taxes and you got dot that right. What you get gross is Very different than what you get in it. And not to mention the time investment.

1:12:27 So I laugh when I hear people in the real estate business talking about passive income. But It truly is passive income. It's literally said it and forget it. I literally hand the domain off to escrow.com. The servers get pointed to the person leasing it. And I get a notification once a month that the payment was received. End of story.

1:12:46 That's it. So That's a pretty good gig. When I did that math and I was like, wow, I like those numbers. It got me pretty excited and I started to pursue this. And I talked to GoDaddy and I talked to some other players in the industry think Why don't we promote this as the way that

1:13:03 Companies Should Sell domains or acquire a domain. And from there The concept evolved in my head.

1:13:10 To the point where it's a no brainer. Even if you have the money. Why lay out the cash? If you can Try before you buy. Even if you know you want to buy it and you have the money to buy it. probably have a better use case for the cash flow.

1:13:24 It literally is gonna cost you in most cases less than you pay to keep your floor clean in your office. To have this domain name. The lowest paid person in your company? cost more than your company's branded domain name. Per month.

1:13:37 So It's a no brainer, in my opinion. For almost everybody? When you go to raise funds. And you go to your V C.

1:13:44 Yeah. I am You know, Vita.com. I'm an investor in a company called Vita. Sold them the video that come to me name.

1:13:51 Which is a good segue into another. that you sort of referenced. It's a lot easier to raise capital. Going and saying we are Vita and we have Vita.com.

1:14:00 Rather than We're Tri Vita or we're Vita.io or we're Vita.xyz. You're not a serious company. It's like you're on training wheels. And so at some point, and most of the smart VCs know this. At some point you're going to have to upgrade because there's a ceiling. You'd be hard pressed. There are a few exceptions, but I think you'd be hard pressed to tell me a company valued over a billion dollars that isn't on a dot com. You'd be pretty hard pressed. And

1:14:25 I think there's only one Fortune one thousand company that is not on a dot com. So At some point For a variety of reasons.

1:14:34 You're gonna hit a ceiling if you do not have your exact brand match.com. Maybe it's because you want to go public and your investment bank. Which was the case with Facebook, when they wanted to go public. The investment bank Yeah, whoever was, the auditors, whatever whoever was came in and said, Look, you guys need to own all your IP. before we're gonna take you public.

1:14:55 And so last minute. They had to go out and buy FB.com from the American Farm Bureau and they paid eight and a half million dollars for it. Because Literally a banker told them they can't go public until they wrap up this IP. Or maybe you're going to raise your next round of funding and you're V C says look.

1:15:10 If you don't have your dot com at this stage. It's a huge risk. We're looking for a hundred X here, right? Like we want you to be a$10 billion company or a hundred billion dollar company. And you can't do that without your dot com. And so if you don't get it at this stage, Then We don't know what it's going to cost later, or you might not be able to get it later. And they realize that that's an inherent risk, right? So there's a bunch of advantages.

1:15:33 Let's say lubricating the fundraising process, de-risking that process in the mind of the investors, as well as the downside risk of not doing so and looking like You're not serious or you have a short term vision. Or you're not committed to your brand. Vida You mentioned you're an investor and you said that relates to another element of this.

1:15:56 What is that other element? I mentioned that just because Stephanie Telenius was Really employees at Yahoo at PayPal and I think two thousand twelve. Woman of the year in technology.

1:16:07 Phenomenal founder. She Approach me to buy Vita.com. She didn't want to pay T A. VIDA. Okay, VIDA. Yeah, the Spanish word for life. Yep, got it. Cause he was building this health tech business.

1:16:19 And She wanted to buy VD.com and she understood. I mean, she had worked for and worked with a lot of Silicon Valley's most famous founders and then She was committed to owning VD dot com and she didn't want to pay the price. You know, I I won't get into the numbers, but

1:16:34 She didn't want to pay my price. I love that was one of my favorite domain names. You say that to all the girls. Yeah. This one's my favorite. So we're working through ideas on how could this work? And I'm If anything, I'm extremely open minded. And so I was just throwing spaghetti against the wall to see what would stick.

1:16:54 And I was like, look. Give me a piece of equity in lieu of cash. And she was like, Oh, that's an idea. And so she went back to her board and they came back and we did a deal. There was a some cash. There was, you know, I think there were some milestone cash payments. And there was a small piece of equity.

1:17:09 You know, valued at Precisely that Delta? There was no funny business. I didn't increase the price. I mean it was just No, we're gonna make up for that delta between what we're gonna pay you in cash and what you wanted in cash. With equity.

1:17:20 You say milestone based cash payments, what type of milestones? Or hypothetically, was it like we raise this round and we give you a little more, then we raise this round, we give you a little more? Or or even just as simple as time. I see. Just one your two minutes schedule. Yeah. Yeah. And Like the leasing

1:17:36 Idea. Triggered in my mind that Wow, I can actually act like a venture capitalist. But instead of Putting

1:17:44 Capital money into these companies, I can treat these domain names as capital. And Interestingly. I get the best position on the cap table because

1:17:56 In my contracts. If you fail, I just Call the domain back. 'Cause the equity goes to zero. That's an important clause. Yeah. So it doesn't always work. I mean, it depends on who the company is, who the founders are, what are the channels, you know.

1:18:10 It's a negotiation like anything else. But generally speaking we we've got a clawback clause. Otherwise we need to, you know, mark up the domain. Yeah, to account for risk. But We started doing that. And so now, you know, I don't know, we've got quite a number of

1:18:24 You know, startups that we have a piece of equity in. That we've Literally invest it in, but we didn't invest. Cash, we invested a domain name. In in some of them I invested cash on top. Yeah. Because I was excited about the opportunity. I've thought about doing this with the podcast occasionally. Just i in a sense because

1:18:41 I do enjoy the startup game at times. I don't want to do it full time. I don't want at this point to have a fund or anything like that. I just don't want LPS and to deal with any of that babysitting, frankly. But if I have As you do, for instance. a competitive advantage in spotting things that could become very interesting. Right. So when someone comes in, And you learn about a company that perhaps hasn't launched or

1:19:10 hasn't made that quantum leap, but they're on the cusp. of having bankroll to potentially buy something where you have a conversation, you realize they're very strategically minded. Analytical. Like this founder you mentioned. And you're like, Huh. Especially with that claw back.

1:19:26 That's interesting. Super interesting diversified. Business model. It's a lot more interesting than a domain sale. It's like, oh I get to come along for the right. So this comes back to Another thing which is that I actually

1:19:38 fundamentally believe. Yeah, we are still in the early stages of domain names and domain name value. early stages of Digital commerce and the internet.

1:19:49 Most people in the world have been online for less than twenty five years. It's a pretty short Period of time. As we see commercial real estate sort of dying. And all the distress in the commercial real estate, we're seeing the digital real estate boom. And there's a direct correlation there. I were to say a causation.

1:20:07 So Again, what is A domain name. It's the place where you meet your customer. It's the only place that you own. That you meet your customer.

1:20:17 Where it used to be the retail store or the office or the Whatever. Something brick and mortar. Now it's digital. And that digital

1:20:26 place where you meet your customer is a domain name. Now some people I've argued and they've For many years, I've heard everything. Originally it was like oh I don't I remember when Absolute Vodka

1:20:37 Launched the first Billboard campaign where they didn't advertise their own domain name, they advertise their Facebook page. And I remember seeing that billboard and thinking to myself, How Stupid. You are literally

1:20:49 At least I don't know, twenty cents. I'm pulling it up right in my head, but like it's gotta be twenty, thirty percent of the equity that you're buying with that billboard. He's going to Facebook. And then when the customer goes to Facebook, you don't even own that relationship.

1:21:03 You don't own the data. You don't own the relationship. You can be shut off at will. Nothing you can do about it. Right? And that was Before cancel culture. Now it's like a serious problem. I chatted with this guy.

1:21:15 Ages ago. He was also sort of a snake eater in the shadows. Not in a not in a bad way, but like he was very discreet. He was very ethical, but he had these Facebook pages. He would buy Facebook pages. They were doing well and then 10 X, 20 X these pages. Yeah. And

1:21:33 They weren't exactly roll ups, but he would accumulate these things and he had these portfolios. And one of them was just minting money. You know, I can't remember what it was, but it was just like millions and millions of dollars a month. And I asked him what it was like having and running that page and he said. It's like having the most

1:21:51 profitable McDonald's in the world on top of an active volcano. Hundred percent. Because I just cannot predict. What is gonna happen? You know it's gonna erupt, you just don't know when. All right, I want to segue here for a second. Speaking of branding.

1:22:08 Fuck yourself dot com. Why did you buy this? Uh this is uh remarkably timely. As I alluded to earlier in this conversation, I get Literally thousands of emails a day. Okay, so I am like

1:22:20 I don't know, maybe there's somebody out there that gets more, but I'm kind of like One of the world's power users of Email. I get roughly 2500 to 3,000 emails a day. I don't use a spam filter.

1:22:32 Because really in my business. I can imagine a lot of the legitimate emails are kind of indistinguishable from what would get flagged. Oh yeah, absolutely. Just full of keywords that are gonna get flagged. A hundred percent. So I gave up on spam filters years ago and I just bite the bullet and I've tried a million different things and always there's just a some degree of Loss I'm not willing to accept. And so I just Literally muscle through it every single day. And it's really the only thing in my life that I'm still I'm captive to. I've really optimized my life for freedom.

1:23:05 Except. Email. E email's still my ball and chain. So At some point. very early. It gets tiring, you get a lot of

1:23:13 crazy people and a lot of just Garbage. And so Somebody presented me with fuckyourself.com And I thought, wow, I want to buy that domain.

1:23:25 just to have the email address, goitfuckyourself.com. And then I'm gonna create an auto responder. And so all of these idiots emailing me, I'm gonna literally just email them back from goadfuckyourself.com. And I cannot tell you How much pleasure.

1:23:40 That has brought me I don't know what that says about me, but it Truly it was one of the best purchases I've ever made in my life. Just so I'm clear. Everyone who email you gets an auto respond. No, no, no, no, no, no. It was selective. There were certain emails that I then set up to be auto responded to, like Consistent emails that I would get.

1:23:57 They would be put into the file, they would be auto responded directly from Gofuck yourself.com. And then other people I would just use more surgically when appropriate. And sometimes inappropriate.

1:24:07 But the problem I was having fun with it and I still Yeah, I get a lot of Pleasure from it. The problem was that it turns out

1:24:15 that everybody on earth in nearly every country from what I can tell When they fill out a form and they don't want to give their email address, the email address they give is go with fuckyourself.com. And so gofuckyourself.com literally gets over a hundred thousand emails. Yes. So it is completely unusable as like you know, a vanity email address, but it is still fun as a responder. That's funny. You know that makes me think of I don't know why this just popped into my head. Well, I think it's kinda funny. Maybe I've seen the big Lebowski too many times, but I went to this wine bar. Hotel Baron, I think it was, in San Francisco at some point. And this was

1:24:56 Pretty early, this is a long time ago. With a lot of the digital signatures. And I've had quite a bit to drink and it came time to sign and I I asked the guy who was standing there, It's like How many people just draw dicks when they sign? And he was like About eighty percent of the guys. Come on.

1:25:19 I don't know why that's never occurred to me, but that's literally gonna be the way I sign from now on. Yes, it's in exactly the same vein, pun intended. So brutal. This brings up if I mess segue from fuckyourself.com. This leads very cleanly to anger management. So talk to me about anger management. Well I

1:25:41 A tribute my I say evolution. Of my anger management. To you, I I guess it's part of the reason I bought fuck yourself dot com. It's

1:25:50 you know, part of the reason that I have the reputation I do, which is quite I don't want to say belligerent, but I don't suffer fools gladly and I'm not afraid to speak my mind at all times. I am The self designated counterweight to

1:26:06 Political correctness? And so I just like to keep it real. But a part of that is Anger.

1:26:13 Deep. Emotional. Anger. It's a fire that burns in me. And it's not always there.

1:26:20 But when I get triggered. Which is Fairly often. It shows it's ugly head. And so

1:26:27 I would say that in my earlier life, it actually served me well. I would have even called it a superpower. But as I've gotten older and as I've you know evolved in business and as I've evolved in my marriage and as I've evolved in relationships. It's not necessarily my friend. And so I've had to find ways to deal with that. But it was Listening to a podcast that you did

1:26:48 You know, many years ago Talking about yourself dealing with anger issues and anger management. You know, it sort of was the first time I even went Mm. Maybe I've got a

1:26:58 Issue. Maybe this isn't normal. And so You know, it was that recognition that sort of led me to seek out ways to start dealing with it. And it's an ongoing process.

1:27:10 But I think it's a good highlight of Things that previously served me. That no longer do. It even became a part of my identity.

1:27:18 Both self inflicted as well as others. And when it's your default, you also find ways to Justify it or Paint it sometimes in the best light possible. It's like buying that domain. Totally. And all of a sudden you're like

1:27:33 This is my superpower. Let me create a narrative around that. It may be true in part. But then you create blind spots for yourself. Absolutely. But but it's precisely what you said. You create a narrative around it that suits you. You've to justify it, which further ingrains it into who you are or who you believe you are. Um You know, at some point it stops serving you. And it doesn't have to be anger, it can be many things, many emotions, or maybe just self identifying characteristics.

1:28:01 And It's very difficult to then change your software and say like, Oh I don't need that anymore. And I'm still working on how to do it, but I've made a lot of progress. You need an outlet for it. So I started boxing, you know, you need to reflect on it constantly. To understand where the triggers

1:28:18 And understand, okay, when I get one of these triggers I need to just Walk away. Stay silent. Whatever it might be. Like

1:28:26 Trying to do To find ways to not engage with it and then always reminding yourself that this isn't who I am anymore, or this isn't something I need anymore. This isn't a tool that I need anymore, is really the way that I look at it. I wanted to attribute that to you. Because

1:28:42 You've done God's work in a lot of your podcasts and talking about this issue. and how you've dealt with it. And that has sent me down a lot of rabbit holes. You know, I I'm very good at picking up on these threads and then diving down the rabbit hole and exploring. Well I appreciate you saying that, man, and I want to also Show.

1:29:00 The cover and title of a Book. That you brought So I want to also thank you for This beauty.

1:29:10 So this is How to Keep Your Cool and Ancient Guide to Anger Management. And this is by one of my favorites, of course, Seneca the Younger, a very controversial figure for a lot of good reasons. And uh this is I want to say on anger de Ida. And I've tried to digest the original. Well, not the original, I should say, the translated original. This has both. This has both and it's

1:29:35 Very well done. And when you gave this to me I said you know what? I could really use this because I want to revisit it. And I listened to it on audiobook last summer, actually, and found it incredibly helpful. And it's In some way similar to an audiobook I listened to which was I think it's the easy way to quit caffeine, which is based on a method

1:29:57 used for helping people to quit smoking. I think it's called the easy way for quitting smoking. And it's a it's a little Hokie Dale Carnegie ish. But the fact of the matter is I stopped. with a few other elements and did thirty days with zero caffeine for the first time since I was probably so unimaginable for me. Oh I know, I know, but it was unimaginable for me as well. Yeah. But it effectively takes you through all of the reasons and justifications that you use for consuming caffeine and just dismantles them one by one.

1:30:27 And I feel like This how to keep your cool. Does something very similar. It makes me feel foolish. It it makes me When I lose my temper it makes me say

1:30:38 You idiot. What are you doing? You can't even control your temper. What are you doing? So I I just keep it on my desk really You know I reference it, but

1:30:46 More than anything, I keep it on my desk and it's a reminder that when some troll on the internet pisses me off or some Buddy, I'm on the phone with, you know, because they got an auto response from go at fuckyourself.com. How dare you? How dare that It reminds me. It's there. It's in my purview and it reminds me like Keep it cool. You have this on your desk as a reminder. I like that. Yep.

1:31:11 Maybe that's how I'll use it. Hard to miss. It's kinda like it's like kind of giant stops. It's orange. Yeah. Giant stop. Totally. All right. So you mentioned I want to know if You have any suggestions? You mentioned you might be the world's number one email power user. A lot of people feel beholden.

1:31:28 Female. Any recommendations for folks? Or are you just like, hey man, I need to go to the email methadone clinic too. I don't have any recommendations for it. Yeah, no, no, I'm one hundred percent the wrong person. So I have completely capitulated And really, I just muscle through it every single day. I basically accepted that I have about a two and a half hour window every single day where it's just clean the inbox. So first two and a half hours of my day, almost every day are

1:31:55 Highly caffeinated. muscling through my inbox. And then my, you know, real day starts. Do you just go through G Suite or Gmail or do you use other tools? I use Apple Mail, but our domain is on Google. But I don't use any filters I

1:32:09 occasionally, let's say every couple of months I'll go in and I'll do the unsubscribe thing, but I honestly find that the more you unsubscribe, the more you get subscribed to other things. I think that that's the hook. But I am for the first time in my life, I'm optimistic. I think that it seems like low hanging fruit. And if there's an AI company super specialized in Email filtering.

1:32:31 Please reach out to me. I would very much welcome your assistance. But I think that AI is gonna be a really powerful tool. I think that what I do. is replicable by AI. I tried it with assistance. Twice I've had an assistant who would like at least Eliminate the low hanging fruit.

1:32:49 Teaching them the way I think about it. helping them understand like Don't delete that. That is actually a really good domain name for XYZ reason, and it's only this Crazy library of esoteric knowledge that I've accumulated that allows me to see that diamond in the rough.

1:33:05 I mean, if you're getting through fifteen hundred or two thousand email in two and a half hours, I think most people are gonna Be astonished. At the speed. I'm really good. So you must archive, I mean, a very high percentage of them. Yes. Yep. A lot.

1:33:18 If there was like a single place where I would be like you and I differ more I think this would be the one. It's like Pure chaos. It's pure chaos. Anybody that works for me is like, what do you mean you just operate from your inbox? Your inbox is just a tool. No. This is my dashboard.

1:33:36 This is like everything is in my inbox. Everything. So yeah, so I don't have any tips or tricks. I really just I welcome the use of AI to I think finally be able to replicate what it is I do.

1:33:52 Because it is Repetitive? So I think I can use AI to do that. Severally the question. Which I've been sitting on. I took a note so I wouldn't forget.

1:34:01 That is related to AI. So More and more people are using Chat GPT or Bard. for various purposes, putting together itineraries.

1:34:12 And they're using them in place of, say, Google. Mm-hmm. The results are very different. And one of the narratives out there, which I think it probably has some

1:34:23 Degree of substance to it is that It appears that Google got kind of caught with its pants down a little bit with chat GPT, even though I've very high degree of confidence in the very Very Fast progress. Yeah. But nonetheless, it was because

1:34:39 There was a question of how to use this technology. It's also a much larger company and just has Sort of machinations and Processes that uh Tiny startup does not. However, what I was gonna say is

1:34:53 Google has the greatest moneymaker in the history. of the internet. Mm-hmm. So how do you capitalize on AI without killing the golden goose is an important question. Mm-hmm.

1:35:06 I would imagine trillion dollar. These tools are going to affect the domain world in some capacity. How do you think about that?

1:35:17 When social media came on the scene. Everybody pushed back and said, Well My domain is less important now. I connect with people on social media. Okay. You're gonna regret that.

1:35:26 And apps came on the scene. And I was like, your domain isn't that important for me. People don't even go to the web anymore. They just use apps. And then everybody has two thousand apps on their phone and It's like not sure that's much better, right? And now there's lots of security issues with apps, and now Google is basically trying to kill apps. And so Every iteration of this of the way humans interact with the internet. Offers up the

1:35:47 fresh new death of doing names. Okay. But Basically, domain names are the foundational layer. They're the bedrock layer of the digital world. Everything else is built on top of that. So domain names are Some super geeky technology as hard Tech guy is gonna tell me I'm you know.

1:36:05 For the most part, for the consumer internet. Domain names are layer one. Consent of your auto response. Yeah. I know there's all these protocols that are underneath that are really the layer one of the internet. I understand that. But for the consumer internet, the part that matters to e commerce and the consumer. Domain names are layer one. They're the bedrock foundation of Doing commerce.

1:36:26 On the internet. If we were to stop launching new companies today. Or putting out new ideas on the internet because oh you can just use chat GPT or Bard for that. First off, I would love to see the data, but I bet you like same as eighty percent of the people sign the digital signature thing with a dick.

1:36:45 Ninety nine percent of the people using chat GPT are using it for some stupid thing like What's the best way to peel a banana? It's like These things aren't creating new ideas. They are Really good at finding

1:36:58 Solutions. From existing ideas. And Putting those things together in creative ways and lots of different Useful stuff.

1:37:07 But if we were to just like Get lazy as human species and say, Oh AI's here. We're done. We don't need to create new companies. We don't need to put out new Wikipedias or new information or new art.

1:37:19 We literally just Stagnate. Because these things aren't creating that next frontier. They're literally only remixing a stagnant Lexicon of Or

1:37:29 I guess I'm just wondering how those tools for instance, and the reason this is top of mind for me is I I ran into someone in their twenties. who basically uses Bart in place of Google now. Primarily because she because the point she made was I don't want to click through all these different links and then click back and have to compare these various things. It'll basically summarize put things into tables, et cetera, for me in a in a whole bunch of different instances. So I thought to myself Well, that's fascinating. I wonder how that will affect The SEO game and in part affecting the game. I think it'll tremendously affect the SEO game. And I think it will tremendously

1:38:03 Affect. formula for how to value a domain. But I don't think that it's going to tremendously impact The fact that we continue to need them. In fact, I think there's an argument to be made that they become even more important. Your domain name needs to be semantically meaningful. It needs to be

1:38:20 Easy. spellings where you're missing a vowel or you're on a dot L wire, you know, because People are gonna say, take me to Amazon or buy this thing. If you're using an agent, it's like, you know, order me uh Whatever it is, but you need to tell it where to order that thing. And so it becomes even more important to have a really

1:38:40 Semantically meaningful domain name. That's my belief. As for Google There's no way it doesn't cut into that. Out business. Right. It's just

1:38:49 There's no way. Ultimately you're going to see Some cannibalization of the search business. I think that's unavoidable. Yeah, it's it seems to me that unique products

1:39:01 will be in a good position if you are a marketplace selling Commoditize products, it's gonna be very challenging because I could use an agent just say, Hey, buy this thing at the best price that will get delivered to you in the next two days. Use my Amex on file, boom, done. But again, that addresses the SEO and the competition game. But wherever it's buying that thing from, they still need it domain. Oh sure.

1:39:24 Yeah, totally. Totally agreed. And I think another potential winner, just like you said, I mean the the demise You know, the end is nigh for dot com's. I've heard that since I moved to Silicon Valley in two thousand. Same thing for email. Right, email's dead. And I'm like, email's not dead. If anything is more valuable than ever. And I think that is gonna continue to be the case as The web becomes a mess of

1:39:48 AI Enhanced misinformation, disinformation, and just content spamming. I think that's domain names are in my opinion, there is a lot of unknowns with AI. I'm not smart enough to Think all of that through. There may be a threat on the horizon that I don't see for sure. And I accept that. But

1:40:05 In my opinion. There is more reason to believe. That Domain names are about to pop off in a major way. Because of a couple of things. One is identity.

1:40:17 and how important it's going to be to be able to verify real identity. And I think that domain names and I think that like Jack Dorsey is on this, Jack Dorsey understands this. When he's building around this, domain names are central to everything that he's doing. So Your name is ultimately like Shouldn't it make sense?

1:40:33 That in order to get your Twitter handle, your X handle, You should have them corresponding to main name. If you're I don't know. N B C

1:40:42 You should have X dot com slash NBC. This would be sort of like a very elegant, like KYC kind of thing. Hundred percent. So it's literally KYC is the right way to describe it. Know your customer stuff for people who Yeah. Exactly. So across the board from every aspect that you can think of, from financial to social media to e-commerce. People

1:41:00 Interacting with the internet. should be identified by a domain name. Because it is a Really powerful way to identify somebody. It ties the physical to the digital world. It's it's that bridge. What do you think the extension will be or what form do you think that'll take? I mean, a lot of people have dot eth, a lot of people have then you of course have dot coms, but those could be pricey, right? If I were do you have any guess for what format that will take? Not gonna tell you a timeline.

1:41:23 But I think that it's in some future. Most people In the first world That are engaging with the internet on a regular basis. are going to have at least two and in some cases three domains. Okay. They're gonna have their real identity, domain name.

1:41:36 And that's going to be less important. The more public facing you are, the more pressure there will be to have the dot com. But outside of that Any extension will do.

1:41:46 And then there's gonna be your pseudonymous identity. In which case you really don't care what the extension is. And then there's going to be your sort of commercial identity, whether that's the business you own, the blog you run. But you're gonna have at least two, and if you have Let's say you've planted a flag on the internet in one form or another through a blog, a business.

1:42:05 Whatever it might be. That's your third domain name. I think most people are gonna have two or three domain names. Already today you can Use a dot com domain name and you can Use it as a криптовалет, you can use.

1:42:17 The DNS records. Too deep into the weeds. You can use the DNS records to Basically insert your

1:42:26 crypto address. Okay, your Bitcoin address. or your Ethereum address into the DNS records of your domain name, and then people can send You know, I've got Drew.com. I can use that as my Bitcoin wallet. And

1:42:38 I think that First Feature of why I believe there's this huge growth curve coming for domain names. First is Identity KYC.

1:42:46 Second is Finance and wallets, specifically wallets. Because again, it's the same problem. Yes, you can use some of these web three domains. These dot ETH, and I was one of the first investors into unstoppable domains. I was literally probably in the first 50 people ever in 2015 to register a thousand.eth domains.

1:43:04 Before anybody even knew that what these things were. I was a huge early adopter of handshake. And there's gonna be a lot of people that get upset with me. You know so I'm gonna try not to poo po poo poo too much, but I do spend a tremendous amount of time thinking about these things, and I'm

1:43:18 Very Deep in it, obviously. I have failed to identify a durable use case for web three domain names. I think they're cute. I think they have

1:43:28 Some utility Certainly in its simplest form, they make good wallets. I don't see a durable utility beyond that. It's definitely better to have Tim.ether. Tim.whatever web3 domain name.

1:43:41 And have that Instead of your Ethereum. address. Which would be Some very long hexadecimal.

1:43:49 String. Impossible for most humans to remember. also very possible to fuck up. Exactly. That's not the thing you want to mess up, right? Like it's one thing to go to the wrong website. It's an entirely other thing to be sending Money to the wrong wallet. But that actually makes the point. That's one of the big Achilles heels of web three domains is that

1:44:08 There's no standard. I I mentioned before I can governs the legacy DNS. The root zone. If you have An unstoppable mean you've got Tim Ferris Got.

1:44:18 X. They have the dot X, they've got dot wallet, they've got dot whatever. So let's say you've got Tim Ferriss. or Tim.wallet. And you tell me, hey. Send me one ET.

1:44:28 I can send you one ETH to Tim dot wallet because today there's only one dot wallet. There's absolutely nothing stopping me from starting a new business tomorrow that also has dot wallet. Or from the Ethereum name service from launching a dot wallet. Or There is somebody on Handshake that already has dot wallet.

1:44:45 And there's going to be Every single blockchain. You're gonna see that already this cycle, but over the next five years, every blockchain that exists is gonna have their own domain name service because it's a very easy money grab. So you're saying there could be bad actors doing bad things with that amount of confusion? Totally, but even if they're not bad actors, there's just gonna be a tremendous amount of confusion.

1:45:04 You say, Hey, send me your niece to Tim Dot Wallet. But depending on which wallet I'm using, which wallet software I'm using I don't know if that's going to the Ethereum blockchain. Is that going to the Handshake blockchain, is that going to the unstoppable? Which blockchain is that on? And so

1:45:21 I could send it to Tim Dot. wallet and it could go to a different Tim dot wallet. Okay. And I have just nothing I can do about that unless I've got some degree of tech savvy and I can Pull down a menu and select which network I want to send this over and that's asking a lot of people. Way way too much. It's never gonna happen. And so for that reason, it's never gonna resolve. The second thing is that with decentralization, I think decentralized money is great. I think decentralized information is dangerous.

1:45:47 And it comes down to one very simple thing that I find most people can understand. If you go to the average person and you say, look. There's this one internet over here, and it's centralized to a certain degree. And you know, people can shut you down and da da da. But it's Kind of good enough. It's the internet you know and love.

1:46:06 We got this fancy new internet over here. Where it's totally decentralized. Mm. Believe me. I'm a libertarian. I'm

1:46:13 Kind of Decentralization maximalist. But I've drawn a line in the sand here for the following reason. And I'll just say so the peanut gallery doesn't go berserk. You're also we don't have time to get into this right now, but Huge Bitcoin advocate. Yes. Right. So let's just just so people know.

1:46:29 You're in the game. Yes. Okay. Yes. So please continue. Stay in the game for a long time and have a pretty deep understanding. So If Presented with two choices of this Here's the internet you know and love.

1:46:40 Here's his totally decentralized new internet that has all these fancy bells and whistles that you should love. Except that there's this one flaw. And that flaw is somebody can put Child porn.

1:46:52 And there's nobody that can ever take it down. And on that singular point. is when I made up my mind that that will never happen. The Department of Defense. Which owns the Department of Commerce, which controls.

1:47:05 Internet. A lot of people don't know that. is never ever ever ever going to allow any browser to resolve these things. Okay. So you've got some fringe browsers that do resolve them. But

1:47:18 I think it's something like ninety-eight percent of all internet traffic passes through four browsers, right? It's like Firefox, Safari, Chrome. and explorer, which, you know, is probably a very small market share these days. But that's like basically all the traffic. And I can Promise you I would put virtually everything I have on The fact that those browsers are never going to resolve a web three domain name.

1:47:40 Ever. Primarily for Those reasons and other surrounding reasons like that, the inability to ever censor content, as well. as the fact that they then lose control to sniff every packet of data that passes through the internet. And so that's never gonna happen.

1:47:56 It's not going to happen. There may be some parallel. Like we've got the dark web now. But this is never going to be a mainstream thing, ever. But I do think they make great wallet addresses. to some extent today, I think that it could get messy, so you have to be careful. Right.

1:48:12 It's funny, the the the the Ethereum name service guys actually are the ones that figured out how to do this. So they kind of shot themselves in the foot. But you can now take a dot com domain name. Or a.xyz domain name or a.NET domain name. And you can use the DNS, the legacy DNS. Settings And you can Literally make your

1:48:30 Domain name a wallet. And so that To me is that's obvious where we're gonna go. All right, so We've five minutes left.

1:48:39 So I want to before just in case. I get excited and lose track. Where can people find media options? MediaOps dot com If you want to learn more about domain names, we we have to

1:48:51 Uh no, no, no. I actually recently I just sold MO.co for for exactly the same reason I explained. I I I bought it When Dot Co kind of launched into the public sphere. It was always the extension for Columbia, but then it got sort of repurposed like AI did. No, I was kidding. All right. So just Yeah. Before we side Alley. MediaOps.com. MediaOps.com. And we've got DomainSherpa.com, which is our podcast that's about Domain names.

1:49:17 I don't suggest it unless you want to learn about domain names and hear us. And are you active on Twitter? I'm very active on Twitter. Twitter's the only social media on that. Okay. Andrew Rosener at Andrew Rosener. We'll link to all these things in the show notes. Last question is. Pursuit of happiness. Small one. So how do you think about pursuit of happiness? Because I will say, having spent time with you, you strike me as

1:49:39 Overall, pretty happy guy. You got a little methy edge to you, a little twitchy, a little bouncy, but You smile a lot of the time. Yeah. I don't know if you're crying on the inside, but you seem like generally a pretty happy go lucky guy. I'm a pretty content person. Content. Content. I have moments of happiness. But I'm Pretty content. Okay, so tell me more about this and what you I

1:49:58 Guess the way that I think about it is that I generally want to be content. I don't necessarily pursue happiness. I pursue contentment. And is that wanting what you have or being grateful? What does that mean?

1:50:11 Yes. I think that's a another way of saying it, but it's for me personally it's a bit more that Terrence McKenna had this Theory of novelty. That ultimately. That's what evolution is all about. It's just about

1:50:24 The pursuit of novelty. And that resonated with me. And I basically surmise that I think the purpose for each of our individual lives is truly if you zoom out and you look at it from a species. Focus as opposed to an individual focus. The purpose for each individual life is actually just novelty.

1:50:41 It's about unique characteristics that make you you. and how you engage with the world around you. And what that leads to. And This novelty is actually

1:50:52 The objective. Or should be the objective. Again. In my opinion. Meaning there's like a variety of

1:50:59 Different characteristics. Survival of the fittest. Does that have the novelty? Not necessarily I I think Survival of the Fittest is a mechanic in the game, but it's not necessarily the end all be all of the game. I think it's really just about the pursuit of novelty that you need to do things. that nobody's done before.

1:51:15 You need to react to things in a way that is not typical. If you do things like everybody else has done things or like everybody else does things, then you can't expect a different outcome than what everybody else has had. And I certainly am not looking for the outcome that everybody else has. Got one shot at this thing. I wanna do something else. I wanna stand out. I wanna Pursue greatness. Whatever that means.

1:51:36 But I certainly, above all else, I don't want to be Like. Other people. I don't wanna be like anybody else, like any other individual or like any other group of individuals. I don't like labels. I just want to pursue novelty.

1:51:48 And What I found that to mean. Once you go Another layer is that really What

1:51:57 Most of life is is actually friction and pain and suffering. And We have Developed our society.

1:52:07 to run away from that. You have a right to happiness. You are should be in the pursuit of happiness. And I think that makes us soft. I think that makes us Avoid risk. I think that makes us

1:52:20 Avoid Pain. Yeah. Makes us avoid hard work. And

1:52:26 Everything that I've seen, everything that I enjoy comes at the expense of pain, suffering. Hard work. Whether that's my marriage. It's a lot of work.

1:52:36 It's a lot of Pain and compromise. But through that you achieve Love. And you achieve

1:52:43 This amazing relationship that's irreplaceable through those days of suffering and doing whatever it takes to make two hundred fifty dollars a day. I was able to build a business that makes You know, a lot of money and fits my lifestyle.

1:52:57 I've optimized it. For exactly the way I want to live. I don't wanna scale it. I wanna have sixty employees. I have four.

1:53:04 Five. I didn't I want to just keep doing what I'm doing. Just hone my skill and hone my skill and just I love what I do. But all of that takes suffering and pain.

1:53:13 Yeah, I think the best way to highlight it is like Mart. Show me one Meaningful piece of art cultural art

1:53:21 that came as a result of like rainbows and butterflies and happiness. Great art comes from pain. Suffering. Heartache, mental illness, just Terrible circumstances. It's really Great art comes from the darkness, not from the light.

1:53:37 But you need both. And if you ignore the darkness, you will never get the light. Or you'll always be chasing the light. The light will always be in the distance. But You have to lean into The pain. You have to

1:53:49 Off camera, we were talking about something else, and you were saying, you know, I had to sit with it. And that's precisely it. You have to sit with the pain. Don't block it out. Don't Ignore it. Don't push it away. Run into it. Run into the pain. Run into the hard stuff. Run into the stuff that nobody else wants to do because that's how you achieve novelty. And through novelty, you achieve. Everything.

1:54:11 Anybody, it doesn't matter what your definition of success is. I can assure you. that person is successful by whatever definition in you're you're holding them up to be. Through novelty. It did something that other people were afraid to do. That other people were

1:54:25 Didn't think of it. Whatever it is, it was achieved through novelty. And As far as I can tell. All greatness is achieved through novelty.

1:54:33 It's doing things that other people don't want to do. Doing things that other people are afraid to do. Doing things that other people wouldn't even think about doing. And Normally

1:54:43 The delta between those things is Pay. Suffering. Heartache. It's it's you know, the darkness. Which could take a lot of forms, right? Like could take

1:54:52 The form of being ridiculed. Absolutely. Right, as an example. Absolutely. Absolutely. And that's just Tip of the iceberg. That's like you know, the soft stuff. That's the Nerf baseball game. Exactly. Exactly. Once you get through the nerf bat, there's another guy standing there with a real Louisville. Yeah. So for yourself then, because you and I think are cut from similar cloths in a number of respects. One of which Not just a bald head. Not just a bald head and and striking good looks.

1:55:21 Not just our resemblances to Jason Statham. But Also, I think You wrestled. I know I know your wrestling coach and your experience wrestling.

1:55:32 had a huge formative impact on you. Huge. And I'm not sure if people with high pain tolerances gravitate to wrestling or if it cultivates it or both. Chicken and the egg problem. Yeah, chicken and the egg problem. And there are other ways, of course, that people develop high pain tolerances. I think you could have childhood trauma and learn to dissociate. I mean, actually a lot of people who have that experience in childhood end up being For instance, very high level military operators, a huge correlation.

1:56:00 Don't think that's A coincidence. And My question is Related to my own experience. I look at Great entrepreneurs, by the way, usually have daddy problems. It's another thing to look at when you're making investments. It's like how's your relationship with your dad? Oh, it's great. Terrible. Okay, knee's over.

1:56:19 So that'll be uh round two with Dr. Rosner unpacking daddy problems for entrepreneurial success. So The experience that I've had And I think I've contended with to a large extent, but because I have a high pain tolerance.

1:56:35 And it has been a competitive advantage. I've sometimes ended up running towards painful things that are not worth doing. Which Seems like it can be a necessary cost if you are pursuing worthwhile novelty, but just the fact that something is painful.

1:56:52 does not justify its pursuit, right? Absolutely not. So I'm wondering for yourself. How you navigate that because even now I sometimes hear the siren song, like it's tempting because I've been rewarded for that in the past. But as I get older, I'm like all right. Time is fleeting. I need to be more surgical about how I approach these things.

1:57:11 Especially if I'm trying to moderate my tendency towards anger, right? Which I think Those two often go hand in hand. Absolutely. Right. So how do you think about that? Simple. Very important to have North Star, right? So what are you optimizing for? What do you want? For me, thanks to Charlie Tuna. I was lucky that I learned very early on in my career I had

1:57:30 Let's say a role model, not for everything, but for certain things, about how I wanted to live my life. I thought, wow. If you were to ask me when I was a junior in college, like, Oh, what do you wanna be when you grow up? I wanna be like a billionaire tech entrepreneur with thousands of employees in this huge company that everybody knows. And then it was like Charlie Tuna told me like whoa, that's the opposite of what you want. No, no, no, no. You want to like Definitely. You want to achieve financial freedom.

1:57:53 But that's just like Step one, you know, you want real freedom. You want free will. So I optimize for that. And so I decide Is this worth pursuing? Is this going to help me achieve more? Or less.

1:58:08 Freedom in my life. I was about to build a business. We were gonna start a new company called Pegasus. Out. year ago now. Six months a year ago. I don't know.

1:58:17 Mm. And um We spent six months. Planning this thing out. Got a CTO, you know, we're ready to rock.

1:58:25 And it was in the domain business, you know, it wasn't like I was venturing into something totally new. It's a business that I can I've never been so sure I would have been successful in this business. Like I know it would have been successful. But we got to the one yard line, we were about to do it, and I asked myself like I was laying in bed and I'm thinking to myself like Literally tomorrow, I'm gonna have this team meeting and we're gonna basically green light this and we're gonna start putting this

1:58:47 In action. And that means I'm gonna hire a bunch of People. And that means I'm gonna be flying all over to have meetings. And I was like

1:58:57 I don't want any of that. Yeah. I was like I don't even know like There was a deep part of me That

1:59:04 I don't know if imposter syndrome is the right word. I've achieved a pretty high degree of let's say financial freedom. But Most of your audience would probably say my business is like garbage, like oh it's a

1:59:16 And and the reason being is I can't scale it. I can't sell it. I understand what you're saying. There will be a subset. Totally. Traditional metrics of let's say, you know, what makes a good business.

1:59:28 My business doesn't meet that description. But my business is amazing. For me. And I don't want to be for somebody else. I want it to be for me. And so

1:59:36 I run it the way I want to run it. Oh it brings me back to a tenant of Charlie Tuna. If you pay for the microphone, you get to say what you want to say. That resonates for me. I think it was Ronald Reagan.

1:59:51 Who said it in a presidential debate? He said Or no, I think it was George Bush Senior. And he said. Excuse me, but I paid for this microphone. Somebody tried to cut off. Anyways.

2:00:01 I optimize for Free. I optimize for freedom of deciding what to do with my time outside of email. I optimize for being able to live where I want to live. I optimize for being able to

2:00:12 Move if I want to move. I optimize for spending time with my children. Especially while they're young. I optimize for I eat dinner with my family every single night at six thirty. Every single night, six thirty, with almost zero exceptions. Six thirty, I'm sitting at the table having dinner with my kids and my wife.

2:00:28 I optimized to be able to I'm gonna leave in two weeks. And I'm going to Thailand for two months and then we're going to bounce around. We're going to go to Laos. We're going to go to Vietnam. And I'm gonna Go

2:00:38 Explore Thailand for two months. And There was this thing inside of me that I hadn't built a business that could I could sell. And there was this box that I felt like I hadn't kicked. So that's that was the driving force for I'm gonna build Pegasus. Pegasus is gonna be a

2:00:53 Basically we had a clear path. We could in five to seven years build this into a five billion dollar company. And I think we could do it.

2:01:02 But I got to that one yard line and I ran down the checklist of the things that I want in my life. And ninety nine percent of the things that I was gonna get from Pegasus was the opposite of what I want in my life. And so it was like boom, I literally went the next day. I told everybody I said, I'm super sorry.

2:01:19 But literally. Just cut the head off the Pegasus, right? Like you know, it's dead. This is not happening. Yeah. So that answered my question, which was like why didn't it get spotted sooner? Yeah, I have this driving thing, I have this thingy this itch that I felt like I needed to scratch. But I think it's important and this is directly to your point, like, you know, everybody's got those itches that they want to scratch.

2:01:39 But ask yourself why. Like where did that idea come from? That idea came because That was what everybody else wanted to do. That was the common narrative. If you go on x dot com right now, You know, you're gonna see a there's a bazillion people that are startup porn and hustle porn and it's like

2:01:56 I haven't slept in four days and they're proud of it. And it's like, no, I want seven and a half or eight hours of sleep. Every night. I'm optimizing for that. And granted, in the early days of starting the business There's a lot of nights that I'm

2:02:09 Not getting that. And there's a lot of suffering and a lot of pain. But I was able to suffer through the pain and the hardship and the extraordinary hours and the blah blah blah blah. Because I had this North Star I knew that there was a light at the end of the tunnel, and that light wasn't some ambiguous goal that somebody else gave me, it was

2:02:28 Actually what I wanted. It was actually what Charlie Tuna had taught me. About how I want to live my life. I wanted to be free. I wanted to be able to

2:02:38 Not answered to anybody for anything except my wife. And Literally just live my life as I choose. If you inspired me right now with some idea Yeah. Achieve some of these things that I want in my life.

2:02:51 This is tomorrow. Or let the guys run it and guys I'm out and Don't live in the Amazon. Like I I like I want that optionality, even if I'm never gonna take it, I want that optionality at all times, and I don't ever want to feel like

2:03:05 I have to make a decision because of somebody else's Agenda. Agenda priorities. Exactly. So I hyper optimize for that. Thank God for Charlie Tuna, huh? Thank God for Charlie Tuna. Really? You know, actually

2:03:18 If I were to say the three most important influences in my life, it would be wrestling. You know, from an early age I started at five. This is hilarious'cause Literally. Our coach.

2:03:28 Salute, Way Griffin. One of the top wrestling coaches in America. It's not the same. Ohio. Pennsylvania.

2:03:35 He used to write in marker across our forehead. Or In a meet he write across our headgear. Pain is temporary, pride is forever. I guess that'd stuck with me.

2:03:44 Start at an early age. And then I was very lucky, you know, my parents really modeled for me. I want to say this because I think it's also one of the elements that Define success for me is

2:03:55 It's also super pertinent to what we're saying. It's like my parents have been married Forty years. Fifty years. And I think that a long

2:04:05 Enduring. Mostly loving Marriage? Is one of the most underrated Elements of success.

2:04:13 In the world. Maybe the most underrated. I am self destructive if it wasn't for my wife. It's a binary outcome. I'm either like Dead?

2:04:22 Or I don't know, eccentric billionaire doing things that don't represent any of the things I've just described to you as what I actually want in my life. Harold Hughes putting urine in milk bottles. A hundred percent. Hundred percent. I'm gonna save you that story, I but Round two. Daddy issues in Europe. Easy, but

2:04:43 They modeled for me what were the minimum requirements to have an enduring relationship. So that was really important. And then Charlie Tuna. Charlie Tuna really just, you know, took it away. What a fucking crazy story, man. Your life is amazing.

2:04:58 It's so wild. Every day I I really I really believe I have the best job in the world because every day I'm engaging with like just super interesting people. You and I have different paths to the same thing. Yes. A hundred percent. A hundred percent. That's why you resonated with me, like from the get go, man. I've been What an amazing path to just engage with these high performers and

2:05:18 U you get to hear m a lot more of their stories. I don't ask them uh you know, I don't get to ask a lot of questions. Yeah, although it You know, you get to have Off the record. conversations about money. And I remember someone said to me they were like

2:05:31 If you really want to know somebody. You gotta talk to them about Their finances? And sex. And they're like, you will know everything. about that person. Yeah.

2:05:41 And So it's a good time for a new podcast. I'm having public conversations. So you get you get a very different side. Yeah. You get the behind the scenes. Yeah. Which is also super interesting. Not all the time. But Yes. Yeah.

2:05:55 Again, I I'm an extremely discreet person. I privacy is is kind of like a It has to be. It has to be a yeah, religion for you guys. So we're gonna Window clothes, get you to dinner with your family. Get me to dinner with my team. Is there anything you'd like to

2:06:13 Say before we Close up shop for the day. Thank you. It was uh really an honor to sit down with you. I really Cherish it. I've

2:06:22 Taken a tremendous amount of wisdom from you and your guests over the years. So it's a bit surreal to be sitting on this side of the uh microphone, but Thank you. You're welcome. Thank you for all the eating. Yeah, thanks, man. And I remember the since our first meeting talking about this Kaido Scallops. I was like, all right, there may be a point in time when we have to have a conversation in front of some mics. My sister and I learned Japanese. I when I was, you know, probably ten to between ten and thirteen.

2:06:56 couple days a week we went to uh this woman's house and she would teach us, you know, orgami and how to cook. and and speaking Japanese, but I I I've lost All of it. So I'd be embarrassed to try. I think I can count to eight. It's about the extent of my Japanese these days. Well, you know, you have that optionality. Tomorrow you could close up shop and become a Buddhist monk in the mountains of Japan. It might be next year. If you wanted. If you wanted. All right. So Just to recap where people can find you, MediaOps.com

2:07:26 The uh Industry's leading educational podcast, Domain Sherpa, which people can find at DomainSHP.com and on Twitter. DS dot TV will take you to the YouTube channel. D S.tv goes to the YouTube channel and at Andrew Rosener. on Twitter and we'll include also

2:07:43 Additional tenants. Of Charlie Tuna and so on in the show notes. Yeah, they are priceless and they should be in time immemorial. So Yeah, so we will put those as always at tune.blog slash Podcast and people can find this. And to everybody listening.

2:07:59 Thanks for tuning in, as always. Be a little kinder. Than necessary. to others and to yourself. Until next time. Thanks so much. for listening to the Tim Ferriss Show.

2:08:11 Ta ta. When I said hunting bigger fish. I mean it quite literally in the sense that I said before people were knocking on my door to

2:08:22 Have me sell their domain names. And now As opposed to trying to Go solicit and sell these five thousand dollar domains, twenty thousand dollar domains, fifty thousand dollar domains.

2:08:34 I said I'm gonna go contact the owners of some of these bigger domains. and pitch them on having me go sell these domains to an end user. And in order to do that, I had to have some semblance of an idea of what I thought their domain is worth. Because whether you're contacting a buyer or a seller, the first question What's the price?

2:08:53 What are you gonna sell it for? Yeah. What are you trying to sell it for? Right. And so Scallops houses. Exactly. Doesn't matter. Doesn't matter what's the price. Right. And so I had to

2:09:04 Do a lot of thinking about What am I gonna tell them? And I'm not gonna lie, there was a lot of fake it till you make it in the early days. Okay. One billion dollars. Uh you know, it's bad news, Bob. I didn't get the billion. Here's the good news. There's a certain degree of also telling these people what they wanted to hear, because I didn't have a reputation at that point, or not much of one. I didn't uh I didn't have a lot to write. Bob, you may have heard of Pizza.net. Yeah All right. Sorry.

2:09:38 The absurdity of it is is not lost. So At that time You know this well, you're Sort of a

2:09:45 Soft master of this. In that early two thousands, mid two thousands. SEO was really the name of the game for online marketing. That was where people were really making the real money. And

2:09:56 Most people were guessing at it, but there was a few good people that really knew You know how to play the game. And I got very lucky. I'm not gonna say his name because He's one of my favorite people in the world. He's one of the

2:10:07 Just truly an amazing, amazing One of the most humble and just incredibly intelligent and and just one of the, by my definition, one of the most successful people I can think of. He's very private, so I won't say his name. But he I was lucky enough to get him as a client and he basically said, Look He hired me to actually go

2:10:24 by demands for him. as opposed to what I had been doing, which was outbound selling. And The domains he wanted to buy and the prices he was willing to pay for them were shocking to me, and I couldn't understand it. And I'm a very curious person, and so I was

2:10:40 Really? Like I kinda pride myself I don't ask too many questions of my clients and I think that that's one of the things that they appreciate. But I, you know, when the opportunity arises, I I try to get into their head and understand. How They see these things. Particularly as it pertains to domains and other things that are Pertinent to me.

2:10:56 So I got to understand the way he saw domain names and I realized that Even though he didn't know it at the time. It was Literally

2:11:06 The key To creating an objective valuation For any domain name. And

2:11:13 I had to tie it back to a way that people in business could understand to create a business case for. Because people just flat out reject you because these domains are expensive and they don't Plan if I'm soliciting them. They weren't planning to spend this money to buy this domain. So it's just very easy to just say no. So I have to have a very compelling business case as to why they should spend this money to buy this domain.

2:11:35 And This took quite some time. And I, you know, I guess this is one of the reasons for my success was again, I'm not afraid to just throw things against the wall. And so I would Start formulating these sort of Algorithms are too

2:11:48 strong of a word and make me sound more clever than I am. Right. These formulas of how I could think about and how I could demonstrate to somebody what this domain was worth in an objective way. It was based on data that couldn't be

2:12:03 Negated. This wasn't an emotional thing. This wasn't a intangible thing. It was like look. Let's think about what is the purpose of a domain name.

2:12:12 And the purpose of a domain name is to connect A business or an idea? With its intended customer. Yeah. Reader.

2:12:19 Many different use cases on the internet. Let's stick with business for now. So Connecting a business. Products and services. With

2:12:27 A intended customer. And you can do that with an IP address, which is ultimately what a domain name is masking. It's an IP address, but humans aren't very good at remembering long strings of random numbers. That was really the point of creating a domain name. So if we think about a domain name from that

2:12:43 First principle of Domains exist because it's a human readable format. For getting somebody on the internet. Two A destination?

2:12:52 then what are the characteristics of domain name that might make it more valuable Then another one. And I thought about it from a business perspective. I said, Okay, when I'm So I'm gonna create a startup. I'm looking at it.

2:13:04 from a perspective of what's my total addressable market? How big can this business be? And I believe it's my thesis. Because

2:13:13 Seemingly proven true over. hundreds of millions of sales and many years now, is that you can measure the total addressable market, the objective, not necessarily subjective, but the objective addressable market of a domain name can be measured through Starting with search volume. So you can go to Google or any of these SEO tools and you can say, Okay, how many people a month are searching for car insurance? Just the words. Car insurance.

2:13:35 And then there's an associated long tail with that, you know, car insurance in Phoenix, Arizona. New car insurance, used car insurance. Best car insurance, right? Car insurance quotes. There's a whole long tail associated with that. And each of those long tails is discounted to some extent. But primarily we're looking at the core

2:13:53 exact match search volume for a particular keyword or acronym. And that's gonna give us the total addressable market in the United States. Globally. Whatever country you can you can usually break these things down by country and see where is this market. And then

2:14:06 You can see What is that market worth by looking at what are advertisers willing to pay for that keyword? There's a certain amount of traffic going to Google searching for that. Now For simplicity's sake, I'm focusing on Google here because it's the one that people are gonna resonate with the most. But

2:14:22 We extrapolated it not immediately, but over the years we've extrapolated this out to basically measuring Use in culture and use in commerce. Which can be measured on social media, which can be measured on YouTube, which can be measured across a whole frame of different Metrics, okay. But for The purpose of simplicity.

2:14:41 We're measuring how many people are searching Google. For this keyword or acronym. What are advertisers willing to pay? for that keyword or acronym. And that's gonna give you just those two numbers alone.

2:14:51 He's gonna tell you what's the total addressable market on a monthly basis? That keyword or acronym. Objectively. And then you can extrapolate that out by a a reasonable business multiple and say Okay. Well this

2:15:02 Total market is worth I don't know, conservatively, let's say thirty six months. In some other industries, maybe it's sixty months. In some other industries it might be You know, a hundred and twenty months. Could you explain that for a second?

2:15:15 You know I'm from Long Island. Yeah. A little slow on the uptake sometimes. Explain how the time varies. Each business or industry, like if you're looking at, you know, MA, you know, but one business is gonna buy another business. Okay, there's generally a multiple that these people will pay, right? In each industry it varies in the type of business. So the multiples is dependent on which industry the search term is associated with. Yeah. How durable is this business? Right. I got it.

2:15:40 So if it's Retail versus SAS versus whatever. Yeah. If it's some Sort of The hot new shiny object trend. You're gonna put a pretty low multiple on it. It might be two years, three years, right? If it's

2:15:54 I don't know. Cabinets. Dot com. It might be a very long Multiple because you know, it's a very durable industry. It's not gonna be a lot of disruption.

2:16:04 And the multiple's gonna be generally be a bit A bit higher. Oh I see. I wasn't thinking about this correctly. Right. So the durability is a real factor. Yeah. In this in this particular calculation. Yep. It's not just looking at the industry and

2:16:16 What type of acquisition prices It's both. Right, it's a combination of those. And again, this comes back to like Meeting people where they are. Right. So I generally will Not presume and I'll ask them like If you were buying a business in your industry, what's the multiple you'd be looking to pay?

2:16:33 And That's the number that I'll use. And most people are know that off the top of their head. Like oh generally we pay three, you know, three X, five X. When I'm doing back of the napkin.

2:16:42 I generally use three because I like to just be conservative and I find that to be the best approach with domain names because as you said, most people don't understand. how to value these things. So the more conservative you are, the more you're gonna resonate. So you multiply that out. You got.

2:16:57 How many people search per month? Okay. Let's just call it use in commerce and culture. You can measure that. What are people willing to pay for that traffic?

2:17:05 You measure that. Multiply those two. And then extrapolate out by the number of months that is appropriate for that industry or business. That's gonna tell you

2:17:14 Basically. Roughly speaking, there's other variables, but that's gonna tell you your total addressable market. Now We're gonna look at Click your right.

2:17:22 And Conversion rate. So that's the next part of the formula. Is Here's the total adjustable market, and here's the amount of that market I feel like I can realistically capture. And this is where sort of the SEO comes in.

2:17:35 So if you are ranking number one in Google for a particular keyword and it varies based on keyword. And you're the number one organic. Listing, meaning you're not paying Google to be Number one, your Organically ranking.

2:17:48 Can reasonably expect Somewhere in the twenty five percent call it you know, it used to be twenty eight, maybe it's twenty three, you know, maybe it's eighteen, but it's twenty, twenty eight percent. Click through right. Okay, just for being the organic first listing.

2:18:03 Of that. Let's just say roughly speaking, there's a hundred thousand people a month searching for this keyword. twenty eight. percent of those paid, let's say twenty five for easy numbers. Because I'm doing public math, which is generally a rule I have against doing but uh

2:18:16 Twenty five percent of those people are gonna click. So now you got twenty five thousand people that are gonna come to your website. And how many of those people do you Are you gonna reasonably convert? I like to use two percent. I think it's a generally a conservative E commerce metric.

2:18:30 Two to four percent. Let's say two percent. So you're gonna have About five hundred people. per month that are converting.

2:18:39 And then you You know, multiply that by Whatever you would have been it's basically the opportunity cost. So what would you have been paying Google to get that? And That's gonna tell you

2:18:51 The cost of customer acquisition. to be that number one position in Google. And then Based on a bunch of studies from like Microsoft We can reference those studies in your show notes if you want, but

2:19:02 You can demonstrate what the delta is between having a domain name that clearly it needs to be one of two things. It needs to be a brand that people Trust and or recognize. Or It needs to have clear intent baked in. So the domain name.

2:19:19 needs to match the intent of the user. And if you have those two things, you're going to materially increase and I don't remember the exact number offhand, but it's a it's a very material increase in the conversion rate and the click through rate. Both. So Using that formula we can demonstrate very clearly The delta between

2:19:38 Your cost of customer acquisition. On Joey's bag of donuts dot com. versus donuts dot com You're gonna have that.

2:19:47 higher click through rate. Which is gonna give you the bigger opportunity. And then you're going to have a higher conversion rate. Which is going to obviously Grow your business.

2:19:56 And so that delta Extrapolated out by whatever that reasonable business multiple is. is the objective Value of the domain name. Does that make sense?

2:20:06 It does make sense. I think I'd probably Need to see it. So so so ultimately ultimately we're taking it back to that first principle, which is A domain name's value? is its ability.

2:20:19 to arbitrage your cost of customer acquisition. If we can reduce your cost of customer acquisition. With this domain name. There's a value. And then you just have to multiply that value out.

2:20:32 By however long you feel is appropriate for your business. to tell you what is this domain name worth to your business. And that is a Non trivial. Non objectionable.

2:20:43 That ultimately is what led to my success in this business was I was able to make a business case and convert people. Where others. Failed. because it was a mathematical valuation methodology that nobody'd ever seen before. And you could say

2:20:58 How can you say no? I'm showing you how I'm going to reduce your cost of customer acquisition, which is one of the most important metrics any business is going to measure. If I can do that, you know, how many months multiple are you willing to pay me? Guess the months multiple is where it seems like you could have a disagreement. Sure. Absolutely. That's where the the disagreement lies, right?

2:21:17 But This certainly doesn't have a hundred percent hit rate. Most people still have an emotional block to I'm not gonna pay some domain squatters, you know, X amount of money for this domain name. It's just an emotional Yeah. I mean, sometimes I can break through that and sometimes I can't. Over long periods of time I'm generally

2:21:34 Pretty good at converting people, but Once it clicks for people. Yeah. There is a material reduction in the cost of a customer acquisition. I don't need to close deal on that day. It's like the movie Inception.

2:21:45 You know the Leonardo Chapier movie? Yeah. Yeah. Once I've planted the seed in your mind. You're gonna go home and you're gonna go to bed. You're gonna have board meetings, you're gonna meet with your founders, you're gonna meet with Teams in your company and At some point it's gonna come up and you're gonna wake up one morning with this

2:22:03 Moment of inception. Where you think it's your idea that you're going to be able to scale your business in a way that you otherwise wouldn't be able to. You're going to launch a new division. You're going to Start buying paid advertising. Some initiative is going to benefit tremendously by owning this domain name. Maybe a new competitor has launched. Maybe there's somebody with your brand name in a different industry and you don't want them to have the domain. But something is going to

2:22:30 There's going to come a moment. Which is why domain names are generally a very long sales cycle. But there's going to be an inception point where you wake up one morning and you think Okay. I now I need this domain name.

2:22:41 And then you're gonna call me back or you're gonna send me an email and you're gonna say Hey. To me, still available, right? And sometimes it is, sometimes it's not. You know, another Sure.

2:22:51 Powerful phrase that we've coined. is off the market forever. You know, once these things sell, they're generally off the market forever. The moment a company makes a decision to acquire this domain name that they were fighting tooth and nail not to buy previously. It's basically priceless to them. Because what they then say

2:23:09 Which is so interesting to me because they don't realize it before buying it. They then say, but this is my brand. And you go Well I couldn't agree more. But then why didn't you want to buy it in the first place? But the moment a company buys it

2:23:22 The first thing they'll tell you is no, this is my brand. I can't sell it. We had I won't use it the specific example, but We sold it a main. It was quite a good price, right? And it but I was fighting tooth and nail. Nobody wanted to buy this domain.

2:23:34 Very good to me. The price was very good. It was$250,000 for a domain that I would tell you is worth at least double, triple that. And We finally sold it. And immediately.

2:23:45 Literally, twenty four hours later. This I would say the David versus the Goliath. The David shows up and says, You know what? I made a mistake. I wanna buy it. And so I just sold it. And so

2:23:56 This guy was really really successful, but he was like he was like a ninja, right, versus a big Goliath. He was like the the Charlie Tuna versus the big factory. But he had a really successful business and he had some money and he said, look, offer them. I think it was like the example, I think it was$100,000 more. No. And this guy just bought he hadn't done a single thing with the domain name. It literally hit his account twenty four hours ago.

2:24:18 He hasn't set up an email on it. He hasn't even redirected the domain name. It's got a parking page on it. Nothing. Zero. He just is now the owner. And we went from He bought it for 250. This guy offered 350. He said no. Went to 500. He said no. Went to 750. He said no. Went to a million dollars. He said no. That guy capped out.

2:24:38 And this guy was just like I don't think there's a price. It would basically be He'd have to buy my whole business for me to sell this domain because this is my brand. It's a very strange phenomenon where people don't they don't make that click. Before

2:24:51 Fine. And the moment they own it, they realize how powerful this is for their brand. It's the most important asset in in many cases, not in all cases, but in many cases, it's much more valuable and much more powerful than their trademark itself. Because he who has the dot com is only one.

2:25:08 If it was Applecomputer.com They couldn't run around calling themselves Apple because somebody else would own Apple. And they would be Apple. Because the dot com is Ingrained into people's brains with trillions and trillions and trillions of dollars in advertising since 1985 when the first domain name was registered.

2:25:26 It's just An endless every sports game has domain names pasted around the arena. Every news channel you're getting inundated with Dot com site. Every big brand that you know, like it's just ingrained, it's assumed. And so

2:25:40 If you are anything except your exact brand match dot com. You can not or should not. Refer to yourself. As your Let's say

2:25:52 Raw brand. If you're dot net or dot IO or dot AI even, I would argue. And you're not calling yourself like let's say you're I'll use uh I'll use Darmesh because he's a good sport. Darmesh from HubSpot.

2:26:06 He has agent dot AI. It's a new little venture that he's he's launched. And You can't call yourself agent. Unless you've got agent.com.

2:26:16 Why not? Because people are gonna assume you're dot com. If you're agent.ai, then your brand is agent.ai. And if you refer to yourself As anything else.

2:26:25 You're going to lose at a minimum, you're going to lose 10% of your traffic that that this has been done. The best study is from overstock. Overstock try to do a rebrand to O dot co. As a whole super phenomenal interesting story that comes back to the one letter.coms and whatnot, but they tried to do a rebrand to O.co. And they were obsessed with this, and they'd made an enormous campaign. And they did massive branding, massive advertising to promote this rebrand.

2:26:54 And They immediately like I I don't remember, I think it was like Six months. Maybe less. They immediately pivoted back to overstock.com.

2:27:02 Because what they saw was that they were losing I think it was forty percent. It's like thirty to forty percent of all their traffic was getting lost. Why didn't they just redirect overstock.com to O.co. Is that a dumb question?

2:27:16 Well no. W the point the point was that they're out there advertising themselves as Overstock is now O. Yeah. But then people type in O.com.

2:27:26 Oh, I see what you say. I see what you mean. And and then it's a dead website. And so what does that say what does that say about your brand? I'm on a four oh four page or I'm on a dead this Domain doesn't resolve. Page. It's very detrimental to your brand. I mean, I think Amazon highlights this best.

2:27:42 I don't know what the increase in conversion rate was, but like just by Taking away one step and making the one click purchase? I didn't profound impact on Conversion for Amazon. Say that one more time, please.

2:27:55 When Amazon introduced the one click purchasing, it had a profound impact. I remember at the time They were talking about it like these very small If you can remove just even very small incremental elements of friction between your Customer and their journey.

2:28:11 Journey to close. With every small bit of friction that you can remove, you're materially increasing your conversion rate in obviously Top line and bottom line. As demonstrated by the number of Amazon boxes that arrive based on my three AM orders that I think are a hundred percent important and uh critical to my life path. So ultimately That's what a domain does. That's why Amazon bought Prime.com because when I use Prime.com

2:28:38 Every time I want to watch something on Prime. I go to Prime.com. I don't go to Amazon and then click on my account and then click on Prime and then go to Prime Video. There's five steps there. Instead I just go to prime dot com. You know?

2:28:50 This is maybe my one opportunity to share the only I think the only domain trivia That I have with someone who knows domains a thousand times better than I do, and I'm sure you know this already, but do you know which dot com forwards to Amazon.com? That I know a lot of them. I sold most of them to them.

2:29:09 Did you sell relentless.com? No. So Relentless was actually gonna be the original name for Amazon. That was Jeff Bezos's, you know, original domain name for the venture, actually. Before pivoting to Amazon. Yeah. But they've got a lot. Jeff Loves. Domain names.

2:29:24 When he was running the company, when he was still CEO. They bought a lot of domain names, and we sold them a lot of domain names. And very strategic and very smart. He understood domain names in a very profound way that most Other business executives

2:29:40 Don't and I can Tell you that. with quite a strong basis because I literally I've done business with virtually all of them. All of the, you know, big Companies.

2:29:50 And very few. understand How a domain name can solve that customer journey. The way that Jeff did? And he utilized a lot of these domains. I mean, he was way ahead of the curve. He bought podcast.com.

2:30:03 Which forwards now to Audible. He bought Yeah, a lot. Author.com and prime.com and tube.com and He's a smart man. Yeah. Very smart. Very ahead of the curve. Hey guys, this is Tim again, just one more thing before you take off, and that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend? Between one and a half and two million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel.

2:30:36 It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kinda like my diary of cool things. It often includes articles I'm reading, books I'm reading. Albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcasts. guests and these strange esoteric things end up in my field and then I test them and then I share them with you. So if that sounds fun again it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about. If you'd like to try out Just go to Tim.blog slash Friday. Type that into your browser. Tim.blog slash. Friday, drop in your email and you'll get the very next one.

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