I'm Brad Mugford, owner of DataCube.com. AMA

[bmugford]

I registered my first domain in the late 1990's, but have been an active domain investor for 15+ years now.

I am going to call this an Ask Me (Almost) Anything.
There might be some questions I am unwilling or unable to answer.

I would prefer to keep the questions related to domain investment, or business in general.

Feel free to ask general questions, or specific questions for instance regarding an appraisal of your domain.

About:
Twitter - https://twitter.com/datacubecom (I have not really used Twitter much, but plan to start using it more.)
LinkedIn - https://www.linkedin.com/in/bradmugford/

I am not sure how long I am going to leave this thread open. Let's see how it goes.

Brad

 

[bmugford]

Easily one of the people I respect the most in the forum. I certainly pay attention to people like Brad, very reasonable and thoughtful with his comments

Thanks for the comments.

I'm trying to think of something half interesting for you, but I'll throw this one. If you had a magic wand, what is the most meaningful thing that you'd like ICANN to change or do in the future, and could they be incentivized in some way to do it (if you've got more than one on your list, so be it)

The two things that come to mind are -

1.) No-bid Contracts

Get rid of no-bid contracts, like with .COM.
Technology is largely driving the cost of running a registry down, yet the cost of .COM keeps going up.

This is the result of a sweetheart no-bid contract between ICANN and Verisign. Verisign does not own the registry, they are just simply allowed to operate it under contract.

There are any number of companies and organizations that could technically operate the .COM registry, and likely for much lower prices.

ICANN is supposed to be a multi-stakeholder model. Deals like this are simply not in the interest of the majority of stakeholders.

2.) UDRP Reform -

To start with there needs to be certain standards, which leads to predictability.

It seems like in too many of these cases the panelist seems to comes to a decision, then cherry pick their way to justify it.

There are many precedents that show completely opposite things.

You have the vast majority of panelists following the rules and common sense, but some others have warped views.

Some of them have just decided that any renewal resets the registration date, or that it is not registered AND used in bad faith...but either. Some have decided to be appraisers, and use asking price alone as bad faith. Some conclude that lack of usage is bad faith.

The problem in my view is that fundamentally the entire system is tipped in favor of the complainant.

The complainant can spend a small amount of money and roll the dice when it comes to an asset worth potentially millions of dollars. Worst case they don't win.

There is no real penalty, even for RDNH. Best case, they just legally hijacked a valuable asset.

What is the upside for a respondent? They get to spend money and at best case keep their domain.

There is no penalty for bringing a meritless complaint, lying, intentionally mispresenting the panel, and any other number of nefarious actions.

There needs to be some type of appeals process without a doubt. It is not really feasible, outside the most valuable domains, to go to court to seek remedy for an egregious decision.

Also, for a respondent the timeline is too expedited.

A lot of people miss emails. Maybe they are on vacation, maybe it is caught in their spam folder, or any number of other reasons.

The vast majority of people who face a UDRP will have no idea where to even start. I imagine a lot of UDRP are not defended because of that alone. It can take some time to find a lawyer and present a reasonable defense.

Brad

 

[bmugford]

what do you think of extensions such as XYZ, VC, GG, are they worth the investment or is it just a trend and it will go?

I have been skeptical of .XYZ largely because of the actions of the registry.
They have had issues with forced (opt-out) registrations at Network Solutions, penny regs, spam issues, etc.

Over time it seems like they have cleaned much of that mess up and there are some strong sales, especially in the Web3 niche.

I am still concerned about the level of consolidation in the extension. Only a handful of people are making steady sales and the registry has introduced premium registration and/or renewal fees.

In general, I have no interest in dealing with "premium" renewals. They can quickly turn assets into liabilities when you factor in standard STR. It can also be difficult in negotiation with end users when you have to bring up that renewal fee.

If you can get high quality terms for low prices, and low holding costs, it could be worth a shot.

I think the others have a place. The lower on the totem pole a domain extension is, the higher quality the term needs to be IMO.

What are the strongest 5 extensions after .com in order from strongest to weakest?

I can't really rank a top 5, but in my view there are (3) extensions that are often the first choice of end users.

1.) .COM
2.) .ORG
3.) Their ccTLD

Most other choices are secondary options IMO.

The extensions I deal in are mainly - COM/NET/ORG/US.

what is the niche that sell best for you during 2022?

thank you

I tend to do well with (2) word .COM. Many of these are quasi-keyword quasi-brandable types.

An example would be something like "Natural Adventures". These are also the type you can find from time to time for very reasonable prices on auction venues.

Brad

 

[bmugford]

Hi Brad!

Based on your 15 years of sales experience, have you tested which pricing works best for closeouts/backorder quality domain names? I understand each domain is unique, but if I were to consider a numbers game, then did you come to a conclusion wherein a particular price band performed better for the low tier domains in general compared to slightly higher price band on the same quality?

It's kind of a complex question to answer.

When I purchase domains I factor in a standard 1%-2% sell-through rate.

If it is just some decent two word .COM or cute brand, I would want a pretty wide margin between my purchase price and sales price. These types I would generally buy from mid $XX to low $XXX and price them from low $X,XXX to mid $X,XXX.

Many of my sales are what I would called "bread and butter" sales. These are just ordinary sales that keep cash flow going. Most of these are in a low $X,XXX to mid $X,XXX price range.

Then on top of that there are some higher sales in the mix.

I would pay a much higher ratio for a domain depending how liquid it is, for instance on a CVCV or LLL.com.
Those have very high liquidity, so they are far less risky.

So I guess in summary I think mid $XX - low $XXX buy and low $X,XXX to mid $X,XXX end user pricing is a ratio that works when you figure STR and the mechanics of owning a large portfolio.

The key though, is you need the eye to find these. That only comes with experience.

When you have cash flow to justify it, then you can start targeting higher end domains.

Brad

 

[Bob Hawkes]

Thank you very much for doing this, Brad. A lot has changed in the domain world over the time you have been involved. I would be interesting in your comments on one or all of the following.

1. What are some of the most positive changes in the world of domains over the past decade or two?
2. What changes have had the biggest negative impact on domain investing?
3. If you were starting from scratch today, would you still go into domain investing?

Thank you for all of the insightful answers, and sharing your expertise.

Bob

 

[bmugford]

Hi Brad,

Please report the sales of last month.
if you can't reveal the names, just mention the type of names.

Thank you.

I am not sure if these sales are exactly from the last month, but here is a selection of recent sales -

• 9 Letter (2) Word .ORG - $7,500
• Quad Premium / Non-pronounceable LLLL.com - $7,500
• Lead generation .COM in a home service field - $12,000 (8 X $1,500 payments)
• 8 letter (1) word .US - $5,000
• Dentistry related .COM - $1,950
• (2) Word .COM brand - $5,000
• Surname .COM (not that popular) - $4,500
• (2) word photography .COM - $4,500.
• (7) letter .ORG- $12,000
• (2) Word .COM (Commercial service) - $7,500

I also make plenty of average sales for average domains on venues like Afternic.

Brad

 

[bmugford]

This one is a bit personal.
What is your 2nd favorite name after DataCube

That's an interesting question.

Maybe not value wise, but one that immediately comes to mind is BuildingBridges.com.
It is just a term with a very positive meaning.

Brad

 

[bmugford]

Thank you very much for doing this, Brad. A lot has changed in the domain world over the time you have been involved. I would be interesting in your comments on one or all of the following.

1. What are some of the most positive changes in the world of domains over the past decade or two?
2. What changes have had the biggest negative impact on domain investing?
3. If you were starting from scratch today, would you still go into domain investing?

Thank you for all of the insightful answers, and sharing your expertise.

Bob

1.) When I first started out I was manually looking at lists of thousands of domains per day. It was to the point where I started to have eye strain.

That is just a highly inefficient way to do it.

Over time I would say the amount of available tools to weed through lists has become more impressive.

People might trash automated appraisals, and I am one of them, but tools like Estibot really help weed through long lists as do free options like ExpiredDomains.

A lot of the process in general can be automated in a way that was not true in the past.

2.) Well, as a domain investor I would say the biggest negative is the rise in reseller prices, at least from the perspective of someone who sells to end users.

I think over the last several years end user demand for quality domains has increased, but not near as much as reseller prices have.

I would say another negative could be consolidation in the domain field. It not usually a benefit for consumers when one, or a handful of companies controls so much of the market.

3.) Tough call. I would still say yes, but I would probably modify how I operated.
It is certainly tougher today to find appealing investment opportunities on public venues than in years past.

Low liquidity is the main reason returns on domains can be so high, but at the same time I think they pair well with traditional investments like stocks, real estate, precious metals, etc. I would not have all my eggs in one basket.

Brad

 

[bmugford]

Hi Brad,

Always interesting and worth reading your posts and replies at NamePros so thank you for your valuable contribution

Thanks for the compliments.

What's your highest sale price and domain name?

I would rather not say, but I will say it was a (5) letter single word .COM for six figures.

How many domains you currently have in your portfolio?

I have 6,000+ domains.

How many domains do you buy generally add each month in your portfolio?

At this point much lower than in the past. Many just decent .COM sell for mid $XXX to high $XXX (or more) at expired auction. When you factor in a normal STR, the math doesn't make sense.

I would say on average maybe 10-20 domains a month in a variety of price ranges.

And what's your yearly STR?

It hovers around 1.5% on average though I don't tend to have very many higher quality domains priced.
Most are listed for sale, and open to offers.

What I have priced are mainly non .COM, lower upside .COM, etc.
The priced ones are probably a 2%+ STR.

Brad

 

[bmugford]

I am going to put a pause on this thread for now.

I had some shocking personal news that I need time to process.

I will likely return later to answer more questions.

Brad

 

[bmugford]

Lots of users saying they respect your opinion Brad. Was/is there anyone in particular in the industry that you look up to or that inspires you or that you admire maybe?

There are too many names to even list. I have respect for so many people in the field.

Instead of just listing all the domain investing legends, I am going to mix it up a bit. This is not a compressive list, but just off the top of my head.


Let's start with a couple people who posted in this thread -

George Kirikos (@GeorgeK) - He is a very important voice in the domain world. His commitment to defending registrant rights is unmatched and he has taken on the often thankless task of standing up to ICANN. One of the smartest people I know in or outside the domain field.

Check out his website - https://freespeech.com/

Adam Strong (@strong) - A domain investment legend. He has made many impressive sales and was involved in the founding of some well known companies in the domain world.


Other investors -

Garry Chernoff - He might not get as much attention as some others, but he is absolute legend in the field. One of the true pioneers.

Nat Cohen (@Nat Cohen) - Another legendary investor. A strong defender of registrant rights.

Luc Biggs (@Federer) - We started around the same time. One of the most successful investors who has built a business based on consistent sales over the years.


News / Industry -

Raymond Hackney (@equity78) - One of the best and most consistent writers in the field.

Bob Hawkes (@Bob Hawkes) - Another top tier writer. The articles he has written can be useful for anyone from noobs to seasoned investors.

Ron Jackson (@Ron Jackson) - For running DNJournal.com for almost 20 years.

Andrew Alleman (@DomainNameWire) - One of the original domain blogs.

Michael Cyger (@Michael Cyger) - He has made a lot of contributions to the field, specifically on the education side.

NamePros members -

@RJ - For founding NamePros

(retired members)

These are two of the the members who contributed the most over the years. Maybe one day they will come back.

@Kate
@JB Lions

I also want to thank everyone else who has posted in this thread.

(Side note. This post took way longer than I expected.)

Brad

 

[bmugford]

It seems you like .Horse more than any. How many .horse 's you have?

Zero. It is just my favorite extension to use when it comes to sarcasm, largely because of the limited potential use.

@DNGear

I want to congratulate you on your track record when it comes to .XYZ sales.

I think I have said this in the past, but what some people see as an overnight success story was years in the making. It is the culmination of actions you took years ago, by taking a chance on an extension when not many others were interested in it.

I give you a lot of credit for that.

Brad

 

[bmugford]

https://twitter.com/x/status/1636813043014270977

https://twitter.com/x/status/1640422222249508886

https://twitter.com/x/status/1648047165929922560

https://twitter.com/x/status/1651604324382908419

https://twitter.com/x/status/1653743894998163456

https://twitter.com/x/status/1654973192665026562

 

[bmugford]

I have never really reported many sales in the past, but I started reporting some on Twitter in recent months.

Here is a selection of some 2023 sales.

https://twitter.com/x/status/1610668124646285314

https://twitter.com/x/status/1611412869966430209

https://twitter.com/x/status/1612845471831101444

https://twitter.com/x/status/1613567730858311687

https://twitter.com/x/status/1615119204268613632

 

[bmugford]

https://twitter.com/x/status/1615735577902473216

https://twitter.com/x/status/1618643677806575619

https://twitter.com/x/status/1620458136099500034

https://twitter.com/x/status/1625886599664877569

https://twitter.com/x/status/1628795082311606277

 

[bhartzer]

Hi Brad,
Are there are certain 'niches' or 'topics' of domains that are easier to sell than others? For example, I once worked on a project to help a client sell a portfolio of geo 'home inspection' domain names. It didn't go well because Home inspectors weren't buying their 'geo domains', even at an extremely low price.

 

[AbdulBasit.com]

Hi Brad,

Always interesting and worth reading your posts and replies at NamePros so thank you for your valuable contribution

Coming to the topic, I would like to ask a few questions if you're okay to answer them:

What's your highest sale price and domain name?

How many domains you currently have in your portfolio?

How many domains do you generally add each month in your portfolio?

And what's your yearly STR?

Many thanks!
AbdulBasit Makrani

 

[bmugford]

Hi Brad

don't have a question because i pretty much know, what you have brought to the tables.

don't need to ask how much you make or what your last sales were.
don't need to question how you methodize and strategize
or whether you're a fence walker, shit talker or the real deal who says what they really feel.

from reading your posts in the early 2000's on other forums and boards, as well as here on NP,
those "ump-teen" years of replies add up to a person that i have can have some admiration and appreciation for.

on so many positions it seems we are on the same page, particularly when "questionables" need questioning and another voice of reason and respect, is needed.

many times you've posed the same question in a more palatable way, than i might have done.
though i ain't changing what i want to say, sometimes i think... How would Brad put it".

so, for being who you are and not trying to be someone else, i thank you!

+ 1 on the thread


imo...

Thanks @biggie. I appreciate the kind words.

I know you didn't ask a question, but I am going to ask one.

What is the most important trait for a domain investor to be successful?

I think having a good attitude and being willing to learn.
I have been in this field for ages, and learn something new daily.

Brad

 

[bmugford]

Great initiative. Let me begin with a question. Are there certain categories within your domain sales that stand out in terms of popularity, during the years that you have been active? Of course, this depends on the composition of your portfolio, but I'm curious if you can say something about it.

I don't really have a specific niche I invest in. I tend to target domains based on the pool of potential end users.

While I have no problem with future trend domains or cute brands (I have many myself), they are more of an unknown.

If you target domains with existing pools of end users, they also tend to grow in size over time.

Brad

 

[bmugford]

1. you have been investing in domains for 15 years and in those years you have created a portfolio of about 7000 domains, how much money have you invested in creating this huge portfolio and how many sales do you make per year? And how many domains you can sell per month

I have no idea honestly, but it would be a substantial total sum.

However, I didn't come into the field with that amount of money.
It was buy, sell, rinse, repeat for many years.

So when I sell a domain, I would buy more domains. Eventually when you do that, you just end up with a large portfolio via reinvesting.

2. How do you manage this portfolio and how much money do you spend on renewals each year?

I just keep track with excel, and consolidate domains at a single registrar to make management far easier.
Portfolio wide, renewals are probably around $55K.

3. do you invest in domains full time, and if you want to invest in domains as a full time job, what would you suggest?

It is my primary source of income, though not my only source.
It is the closest thing I have to a full-time job though.

Brad

 

[bmugford]

Can you share your experience on negotiations with buyers? (No need specific details of course, just a rough dialogue on how you two communicate during negotiations if possible)

I tend to focus my time and energy on inquires that actually have a chance of panning out.
I would estimate that being about 10% - 20% of inquiries.

The vast majority of offers I get are lowballs on domains that are worth far more.

I will generally ignore those, straight out reject them, or reject them with a message like price expectations or framing the market value. Many times these potential buyers will come back with better offers.

If someone has a bad attitude, that is the quickest way to get the offer ignored.

That would be something like -

"You are not using this domain. I am the only party that would ever be interested in this domain"

That type of offer is put straight into the garbage.

Also, when people mention things like "non-profit", "school project", etc. it almost always comes with a lowball offer attached.

I don't really care that much about the budget or usage of a potential buyer. I price domains based on my perceived market value, with rare exceptions.

Brad

 

[bmugford]

Brad, a few questions for you.

Preamble -

Our industry is far from being ethical. There are many threads right here on NP where the stuff like spamming, frontrunning, bidding on own domains, unethical brokerage, fake sales, auction games etc. is discussed/disclosed, together with the identities of the folks involved. As a matter of fact, each particular thread tends to be forgotten after some time. Moreover, anybody with experience may dig further - and he will find a lot more "interesting" things. I, for one, did - and as the result stopped visiting some blogs/websites/twitters belonging to allegedly ethical and prominent industry participants, as I'm no more interested to hear their opinions on anything.

There are issues with ethics in the domain field? That's news to me.

On a serious note, it seems like there is scandal after scandal involving shady behavior.

Questions -

Have you ever had a temptation to go over to the dark side? If so, how you dealt with it?

I think everyone has been tempted at some point. It can be frustrating to see people being rewarded for doing unethical things.

There are certainly ways you could game the system to your advantage. I won't go into details here, because it might give some people ideas.

I try to let my morals and ethics guide me.

You only have one reputation. It is one of the most valuable things you have.

You're ICA member. As a matter of fact, not all ICA members share the same ethical values. Don't you have some sort of internal conflict here?

Sure. I don't agree with the ICA or members on everything.

The ICA is composed of many different members with different interests. It is not a monolithic group.

I have had disagreements with the ICA in the past on various issues.

I have made public comments on some. I have addressed some privately.

I think the ICA serves a role, but is not perfect by any means.

One real world example is I brought the Brent Oxley situation to the ICA. His domains were locked by GoDaddy.

Brent was getting nowhere dealing with GoDaddy directly.

The ICA dealt with GoDaddy and helped resolve that situation.

Now Brent is someone I might not agree with on many issues, but it was a registrant rights issue. That is what mattered to me in that situation.

This thread has enough views and questions from new members. What can you recommend them - do they still have a chance not to fall into the traps (= lose money and go offline) as a minimum, and to build maybe small but stable and ethical own domaining business as a maximum?

I think everyone is likely to lose money at the start. The key is learning from your mistakes.

Even if you make all the right decisions, it can take a long time to show a proof of concept.

You also need realistic expectations. This is a business, not a lottery.

Brad

 

[bmugford]

Question:

Do you find that having your own portfolio site helps you with your sales? How do people discover the site?

I would say it helps passively more than actively. Though, it has been ages since I have updated it.
I have a lot of quality domains that are not even listed on there.

I think it helps for branding and credibility, but the vast majority of my sales still come via more traditional means - Afternic, Dan, broker, direct negotiation, etc.

I guess I would put it this way, you don't need a portfolio site to be successful but it doesn't hurt.

Brad

 

[Digital Nomad]

Thanks for the comments.

I dabbled in outbound in the early days. I was highly selective and emailed a handful of people for a domain.

If you handreg a domain and are sending out dozens or hundreds of emails, you probably need to be far more selective.

If you enter with limited capital, there is a fundamental "chicken or the egg" type problem.
If the average STR is 1%-2% how do you make sales with limited domains?

I am not against hustling for sales to try to get over that problem, but I am not sure how effective it is today.

Brad

I agree, same experience here, thanks!

Another question came to mind:

Would you ever sell DataCube.com and if so how much would it be in figures? It's a historic name, hard to let go of that one!

 

[bmugford]

Another question came to mind:

Would you ever sell DataCube.com and if so how much would it be in figures? It's a historic name, hard to let go of that one!

Almost everything has a price, but for me to consider it that price would need to have a lot of zeros in it.

Brad