On this edition of "Expert Exchange" is Nat Cohen, a seasoned domain investor and owner of Telepathy, Inc. Nat's company owns a portfolio of several thousand domains, consisting of some of the most valuable domains available. Alongside one-word domains such as Focus.com, Speak.com and Recruitment.com, Telepathy owns a large portfolio of two and three-letter .COM domains. As well as maintaining this impressive portfolio, Nat is a dedicated ICA board member. The ICA (Internet Commerce Association) is a non-profit organization that advocates for the rights and interests of domain name investors, web developers and associated companies. The association works on behalf of all domain investors - no matter how big or small your portfolio is. In this interview, Nat gives his views on a number of topics including the ICA, new gTLDs and China. We also discuss the upcoming UDRP process review - a very important subject that all investors should be aware of. NP: How did you get started in the world of domain investing? Nat: In late 1997, I wanted to create a website but didn't know how to register a domain name. I came across an article on iGoldrush talking about people who were investing in domains. It made sense from reading the article that everyday word domains would have value so I started looking for available domains to register- and discovered that nearly every one I checked was already taken. I thought I was already too late. NP: What’s your opinion on new gTLDs? Nat: I'll clarify here that my answers to all these questions are only my personal opinion and don't reflect any official position of the ICA. I expect that some new gTLDs will become quite established and that many domain investors will get rich from investing in new gTLDs. I find it a challenging area to invest in myself as it is a new, untested market and some of the new gTLD registries have already captured much of the value by premium pricing their name spaces. But there are opportunities, especially if you have good instincts for which ones will appreciate in value and be in demand in the future. NP: Is .COM still your preferred extension, or do you actively invest in other TLDs? Nat: Yes, .com is my preferred extension. If you are looking to do high value end-user sales then you'll likely be dealing with .com domains. I also have many short .net and .org domains as well as many Indian country code domains (.in/.co.in) that I've acquired over the years. NP: How has the entrance of Chinese buyers changed your strategy? Nat: While I don't usually sell to other investors, because of the huge jump in value of some three-letter dot-coms that are not Western premiums but are desired by Chinese investors, I sold several of those to Chinese buyers. NP: In recent news, we found that you had acquired a large portfolio of three-letter .COMs from GoDaddy (Mike Berken’s portfolio). Do you still feel that three-letter .COMs are undervalued by investors and end-users? Nat: Overall I don't think three-letter .COM domains are undervalued by investors. I think some companies don't fully appreciate the lifetime benefits that come from branding on a three-letter dot-com domain, but it is hard to generalize as the value is so dependent on the particular circumstances of each potential end-user buyer. NP: You are very much involved in the ICA. Why should other domain investors be interested in joining the ICA? Nat: As a relatively new domain investor I had crew.com taken from me, in a UDRP decision I consider unjust by a couple of panelists who treated domain investing as illegitimate. That woke me up to the danger the UDRP posed to domain investors and the need to do something about it. I was glad when the ICA was formed several years later. Now there was a group of domain investors and domain businesses who were willing to band together in the effort to better protect our rights. We are quite fortunate in having a very effective advocate in the ICA Counsel, Phil Corwin. I joined and became heavily involved. For the last several years I have represented the ICA membership at large on the board. Let's take a step back and take a look at the reasons we need the ICA. It is smart business to protect the future value of your assets. Our business is in flux. The rules governing it are in their infancy. A domain is an unusual asset. It is a product of a technical addressing system. It can function as an address or as a brand. The domain system is overseen by an organization, ICANN, that is itself an experiment in community self-governance and that is not accountable to the public interest or to any government. Operating in such an environment requires constant vigilance. Our business depends on clauses in agreements that are undergoing constant revision. Simply changing the word 'AND' to 'OR' in the UDRP's criteria for bad faith registration AND use could devastate the domain investment community. It should be a high priority for all of us to pay attention to the policies that have such a huge impact on our business. Yet policy work is difficult, time-consuming and tedious, and almost nobody in the domain industry - especially small businesses - has the time or the appetite for it. Most domain investors are complacent and think that someone else is watching their back. The unfortunate truth is many of those watching our backs are aiming at a target, because they view domainers as parasites, and think that our domains should belong to businesses who can make a "better use" of them. As an industry we have to choose whether we wish to participate in the creation of the rules that govern our industry. Or do we leave that work to others, many of whom are hostile to our interests? The good news is that the ICA is looking out for you. Phil Corwin is doing the difficult policy work that is essential to protect our livelihood. ICA members are participating in working groups to develop a consensus on policies for domain theft, UDRP reform, the .com agreement extension, and on improving our outreach to the domain community. You can have an impact on our industry by joining and participating in these efforts. Support comes in many forms. Helping build awareness and creating a common purpose are a great help. After you've put down roots in this industry, built a portfolio, and know you're here to stay, the time may be right to join the effort to protect what you've built. ICA membership starts at just $50 per month. The ICA is made up of your friends and colleagues in the industry. We are joining together to ensure that the domain industry has a bright future. We need your involvement. We hope you join with us. NP: Recently, the news has been released that the UDRP process is going to be reviewed. Can you tell us what you view as flaws in the current system? Nat: The overall problem with the current system is that it is unpredictable and implemented in a biased way. When attorneys for trademark owners are appointed as panelists, where they have the freedom to call anything they don't like 'bad faith' and the power to seize domains, then bad things happen. NP: As a large portfolio owner, do you feel that companies currently try to take advantage of the current UDRP in an attempt to acquire generic domains? Nat: It's not a feeling, it's a fact. Abuse of the UDRP through Reverse Domain Name Hijacking attempts are at a record high, and all too often companies get away with abusing the UDRP to steal domains they aren't entitled to. NP: What improvements would you like to see in the UDRP system in future? Nat: The UDRP needs clearer standards and more consistent implementation. The language of the UDRP dates back to 1999 and makes no mention of domain investing. The UDRP is overdue to add protections for those who own inherently valuable domains as an investment, and to fix numerous procedure flaws that result in substantial bias in favor of those filing complaints. NP: What are your predictions for the domain industry as a whole over the next five years? Nat: I expect it to become much more competitive, there to be more consolidation, and it will likely be harder for individuals to succeed. Nevertheless, huge opportunities remain as the Internet becomes ever more critical and expands to new populations. The value delivered by memorable domains that can serve as intuitive online brands will continue to increase, so I expect premium domain valuations to continue to rise. NP: What is the domain industry missing? Nat: Clarity as to ownership. Since domains are entries in a database and that data can change in an instant, it is not clear who is the actual legal owner of a domain. Are you dealing with the real owner, or is the domain stolen? Was the domain stolen five owners ago and does someone else still have a claim to the domain? Does the whois record show a web developer but the domain was actually registered on behalf of another company? If the registrant appearing in whois, the admin contact, and the one with access to the domain account are three different people, who is the actual owner of the domain? Lack of certainly as to ownership also applies to domains that a domain investor registered years ago, as we have seen seemingly secure domains taken from investors through bad UDRP decisions. The domain industry lacks a solid foundation when the ownership rights of other domains can't be clearly determined, and when one's own ownership rights cannot be secured. NP: If you started domain investing in 2016 with a small budget of $5,000, what type of domains would you buy? What's your top tip for anyone just starting out in domain investing? Nat: You can make money with many types of domains. I'd suggest the focus at the start should be making sure you have the necessary skills and knowledge. You can't beat an instinct for recognizing value. Andy Booth comes to mind as a guy who has an amazing knack for recognizing the potential in a domain. He started with a small stake but then rose quickly to dealing in super premium six-figure domains because he saw value where others didn't. You need negotiating skills when buying and selling, and money management skills so you don't overcommit your funds. For most people, though there are exceptions, it is good advice not to be distracted by trying to develop out your domains. It's a very different skill set. As someone said, the best domain becomes a mediocre business the moment you start developing it out. -- Thanks to Nat for taking part in an excellent interview. If you are interested in joining the ICA, then you can do so by visiting the ICA website; individual memberships cost as little as $50 per month.