I’m probably one of the very few in the industry who isn’t always bullish about domains. I look at domains as investment vehicles and am quite aware there’s a whole world out there besides domains. When I saw the following post on Frank Schilling site I commented the true value of a sale is where you can leverage the money best from it, rather then see if you got most for it. I always said when you sell, you have to ask yourself what kind if impact does the sale have on your life, on your business? See, money is just money, it’s how you leverage it that makes a world of difference.
After commenting I realized if one person can tell the story best it is “Domain King” Rick Schwartz. Rick sold the domain men.com and leveraged that sale many times over. So without further delay, here’s Rick’s words on the topic.
Most folks think I sold Men.com for $1.3 million. But they only saw the public part of the equation. They never “Followed the money.” See I was not satisfied with a 1.3 million payday. What I saw was something different. I saw other time sensitive opportunities that would help me parlay that $1.3 into 3x that within months. Matter of fact, those dollars are still paying dividends. In the immediate weeks after the sale I made about $750k trading a couple stocks I liked at the time. That paid very quick dividends. I then bought 2 condos.One I have sold with a small gain. One I still own and has gone up in value by over $1 million. Plus it gives me a lot of satisfaction and joy going and spending time there (Sahar’s note: it is a fabulous high rise condo, downtown Fort Lauderdale, overlooking the ocean and Las Olas BLVD). Not sure how much that is worth to you, but it has a great value to me. So while everyone thinks I sold men.com for $1.3 million, the reality is the VALUE of the deal was millions more.
And let’s not forget the biggest dividend of all. It was a dividend for friend or foe alike. It brought domain names back in the spotlight. It raised the value of ALL domain names. Here is the cnn.com story for those that forget what it was like just 3 or 4 years back.
This was big news in late 2003. It made headlines around the world in countless publications. It spawned many other stories and interviews. It was a moment in which the domains PROVED what I had said for years. I had repeatedly said that after the collapse of Web 1.0 (not called that at the time) we would see the real web rise from the ashes and domain names would be the key survivor and the center of the new web. That sale was PROOF and the world took notice. 2 weeks ago we sold domains for much more than that and while that was a GREAT moment, it was not a worldwide headline. It says a lot about how far we have come in such a short amount of time.
That rising tide paid a dividend to every single domainer and lastly, it probably gave me the credibility to start T.R.A.F.F.I.C. just a few months later. It helped me to “Brand” myself. That sale moved things from a realm of theory to a realm of reality. That was a PRICELESS dividend. Something to point to as proof for those that doubted.
So what is the real value of the men.com sale? Like I said, it is STILL paying dividends. So when you make a sale, don’t sell for the sake of selling. Have a REASON to sell and have a PLAN to parlay those dollars into more dollars and more importantly….enriching your lifestyle.
Rick Schwartz
Great post! I guess conversely if you don’t have a good plan you shouldn’t sell. I keep thinking back to the sale of Unocal to Chevron for countless billions, this is after Unocal brought most of California’s ‘easy to pump’ oil out of the ground. They still got billions 100 years after founding the company and the founders (if they were smart) enjoyed the cashflow along the way. Money is like water and can disappear into nothing if you’re not careful. You buy the wrong stock or the wrong condo at the wrong time and those million dollar domain sale proceeds can turn into nothing real quick. That’s how I think though. I think Rick is right: if you can get your walk away number you should probably take it and do something you’re passionate about because life is short.. but if you ‘don’t’ have a plan, I wouldn’t sell just ‘because’ life is short. You might find the grass isn’t as green as you thought.
Sahar,
Two quick personal examples I can give that also supports not selling unless you’ve got somewhere even better to put the proceeds to work:
A couple of years ago, I had a variable (1-3 year term w/increasing yearly strike prices) lease-option agreement to sell the prime geo domain for my own home Conejo Valley community, ConejoValley.com, for; if you can believe this; less than $20k (which I thought would be a great 2 year return since I’d picked it up on a hand reg for $25 or so).
Today; after watching sales like Branson.com going for $1 million and the owners of PalmSprings.com turning down a reported $5 mill for their operating site domain name, I wouldn’t today let ConejoValley.com go for less than $250k…and am thinking now of developing it myself, in which case I probably wouldn’t sell it at (most) any price.
The other example is SecondJobs.com; which (again; since I’d paid only $25 or so to reg it back in 2002/03 on a hand reg) I would have been willing to sell for as little as $50,000 a couple of years ago…but which NameMedia has just valued at $250,000.
You, Rick, and Frank know of what you speak.
Good advice to all who own solid, salable (expecially .com) domains.