DomainTools Blog

The value of a good name is everything. When I first met Galen Ward he told me he had started a small web 2.0 startup called Shack Prices.com. My first thought was, “What an Odd name, Does his company give prices for run down houses?”. I think I was rather blunt when I suggested he think up a better domain. His complaint was that there were no good names still available. I responded, “Over course not, if they were good why would they be available.” The trouble with starting a Web 2.0 startup is that the technology should come first but when it comes to a name or brand they should not settle for whatever is left unregistered.

I reviewed ShackPrices and I saw that the interface and functionality was very impressive. Clearly this will be a good company but it is suffering from what us domainers call “Web 2.0 Naming Disease”. A Web 2.0 company just finds any $7 domain name and makes a brand on top of it. Domainers that own generic domains end up making millions on the Web 2.0 guy. Look at the case of Flickr.com. They choose a name that had a missing “E” and the owner of Flicker.com is now reporting that they receive 150K visitors a month now and they just turning down an offer for $700,000. Had Flickr been smart they could have bought the generic Flicker.com domain name for $15,000 to $25,000 a few years ago and now there is a auction that is exceeding $700,000.

Anyway, back to Shack Prices. I think Galen had defended his name to so many people that he became entrenched in the name. It is hard to give up an existing brand and switch over, but after talking with enough people he determined it would be in the best interest of his company and so he started looking around at names. He wanted something really powerful, he contact the owner of a dream name and was told by the owner the domain would cost him $200K. For a two man team with no funding he quickly passed and kept looking. After four or five more attempts he found a name that was reasonably priced. He asked me for some advice on the purchase, he said, “Does it always feel like you are negotiating in a Mexican outdoor flee market when talking to a domain owner.” I explained, “Yes, generally that back and forth negotiation is normal. Just remember the owner can only sell it once.” The negotiation process is generally pretty easy. But the owner always wants the seller to name the first price. If the buyer says, $200, then the owner may not respond because they hear that line all the time on their generic domain name. The better the domain the more fair an offer should be. $200 will insult generic domain owners. I have a friend that will not even respond if the initial offer is lower then $10,000. If a domain is worth $500,000 without even thinking. Don’t even start an offer below $50,000. It is not worth the owners time to halt his life and educate the person making the offer.

To replace ShackPrices, one of Galen’s choices was Estately.com. The owner of the name only wanted a few thousand for the domain and I told Galen that he was actually getting a steal. A one word domain name that is short and sweet are a total steal if you can get them for under $10,000. Upon announcing the name change this two man company has gotten calls from three VC firms. The brand is everything, as ShackPrices they had great technology but their name held them back. Galen pointed out, real estate professionals are hyper focused on reputation and he was getting mixed reviews with the old name. The offline feedback that he was getting suggested people were either negatively polarized with the ShackPrices name or thought the name was fine. Now the feedback is overwhelmingly positive. Great Brand plus Great Technology and I predict this will be a  good thing.

Galen is lucky, Aussie.com, recently completed the acquisition of the domain name Hot Property.com for $120,000. I think the the Estately.com domain is a great brand.