My question to Godaddy's CEO at NamesCon: Domain Liquidity for the industry

[Rob Monster]

Earlier this morning, I wake up to seeing a lovely comment from Shane Cultra on his blog:

To my eyes, that comment from Shane is actually pretty crazy. Ironically, many people told me unsolicited, that my question was the highlight of the Q&A. This is not the first time that Shane has spoken out of school against me with trash-talk and it probably won't be the last since it shamelessly drives up his page views for his affiliate site. I don't know if anyone has a video of the Q&A section of Aman's keynote but if so, would be great if someone would upload the actual video clip. I believe anyone who objectively reviews my question will find it to be rather selfless. It was a question about domain liquidity. There were 2 parts, and I believe they were reasonable and sincere.

Part 1: Domain Liquidity via Loans

As some folks know, Epik provides interest-free loans secured by domains. This is popular but we cannot lend to everyone in the amounts that everyone might like. Compared to Godaddy, we are a relatively small company without access to the vast pool of capital that Godaddy has access to. I asked if Godaddy would consider extending domain loans to its customers. The lending model is proven. Godaddy has the ability to scale it to a much greater degree. Rather than forcing Godaddy customers to abandon domains to their expiry stream, why not allow Godaddy customers with liquid names to borrow against their portfolio? It seems reasonable to me.


Part 2: Working with US Congress to make domain names a bankable asset.

I have also been a long-time believer in the potential for domain names to be a respected asset class. The challenge there is that the banking industry does not recognize domains as a bankable asset class. People can donate domains to non-profits and can get a write-down for their investment basis, but if you go to a bank and ask to borrow against a 3N.com, they have no idea what you are talking about. The House subcommittee on banking could engage here but we would need some lobbying power to make that happen.

For anyone who has ever studied the history of the housing market, the correlation between the availability of borrowing capacity and the prices of the associated asset is indisputable. When credit is available, asset prices go up. If domain owners could more methodically borrow against their domains at conventional banking rates rather than only from hard money pawnshops that dominate the landscape today, it would be a game-changer for making the pie bigger for everyone.

I will be interested to hear what folks have to say on this very reasonable topic about domain liquidity that can greatly impact the future of the industry.

 

[nothere]

In the meantime, the US banks are paying depositors about 1% on time deposits. That's rather garbage..

At 1% people are actually losing at least 3%-4% yearly on inflation alone (I don't buy the official govt statistics on inflation) but then, people that deposit on bank "savings" accounts are not likely to invest on domain names.

The only question is how many folks want 10% of low risk return with a primary counterparty and at least one guarantor.

The problem is domain pricing that is acceptable to both parties, ability to sell at a profit and sell enough of them in time, should borrowers decide to "mail the keys" to the lender. Mortgage rates that are secured by homes are far less than 10% so money would move in here too.

No doubt that dozens or hundreds of domains would be financed in a heartbeat, but pricing not-category-killing domains for this to make financial sense is challenging. When you have a great name, you might forgo full potential, for cash in hand. After all you have other names, you are still making a huge profit and the buyer can wait to cash it in. Win, win, since there's a lot of money for both sides. But for $xxx or $xxxx domains it's tricky.

 

[ExploitOdds]

If you owned property on South Beach, it seems unlikely if owned outright that even a $100k loan would be cause for concern.

what I think is happening is people are worried about domainers losing their names. Perhaps you see this more as a title loan at a pawn shop. I think what will happen is those that need the loans will not get one bc the domain names aren’t strong enough. I have a hard time imagining anyone but the top domainers truly benefitting from the loans. Maybe I’m wrong, but a $500 name isn’t getting lent any money or
Much money.
Who knows?

 

[frank-germany]

...what if someone else would have been asking the same questions? Some random guy (with no affiliation to Epik) asking about if GD would ever concider implementing some features being offered by Epik? Would you concider that to be bad taste?

would that random guy
felt the urge
to promote epik?

 

[garptrader]

Twenty-five years after the internet became mainstream, domain names are quite often considered an afterthought when it comes to launching a project, website or business. With a few years experience in the industry it is not difficult to find potential end users for a domain name in one's portfolio. The end user is using a social media page or obvious reg fee domain but just does not value domain names. Despite the many thousands of dollars that businesses regularly spend on IT costs, marketing, professional services and other normal business expenditures, aftermarket sales are relatively rare. They should be an integral part of the marketing / IT function. So yes Godaddy is in a position to influence domain names being more than a $2.99 IT solution.

 

[alcy]

there are many domainers who do not have a very liquid portofolio... but still receive offers... nearly daily.. and overall profits.. lets say annually... which keep them in the green... but sometimes life situations etc can make such people people unable to complete renewals on such portofolios etc... things happen.... epecially for less liquid folios... and profit ranges which aren't very big aftr all expenses...

that being said.. maybe a solution I am thinking of here.. would be a service whereby the owners of such service .. or better still the community or participants as a whole.. evaluate such portofolios on case by case basis.. and then collectively decide if they want to participate in sponsoring or financing (as in renewals basically) such portofolio.. while the owner cannot. many variants can exist here.. some profit sharing for each sale with participants and sponsors.. etc... i think infinite possibilities! i think this is a very doable model... for people/domainers/participants who know their stuff and which names have potential to sell.. such people can take literally few mins to browse a folio and know of its potential.

what do you think of this idea? would any here be interested in joining into such venture perhaps? we can call it...... DNprofits (.com).

its no small project.. or effort.. but so is everything else. all things start small.

 

[Samer]

I hear Rob say:

"read the bible or listen to me"



" the lord needed a registrar " at 7:23

that's when I think the CEO of a tiny registrar is kind of
"strange"







but it looks like you have a hard time when you want to avoid epik promotions
mixed into any kind of threads

I took it as; everyone has their own journey; bound together, by our love for domains.

Everyone goes different path get they are;
“there’s a light at the end of every tunnel.”

All explained in one my fave Rob threads;
“What’s your calling?” Remember that thread? Rob opens up, shared personal about himself, which give him credit for, glad shared again!
should be commended, not derided. Go Rob!!

Samer

 

[Rob Monster]

At 1% people are actually losing at least 3%-4% yearly on inflation alone (I don't buy the official govt statistics on inflation) but then, people that deposit on bank "savings" accounts are not likely to invest on domain names.


The problem is domain pricing that is acceptable to both parties, ability to sell at a profit and sell enough of them in time, should borrowers decide to "mail the keys" to the lender. Mortgage rates that are secured by homes are far less than 10% so money would move in here too.

No doubt that dozens or hundreds of domains would be financed in a heartbeat, but pricing not-category-killing domains for this to make financial sense is challenging. When you have a great name, you might forgo full potential, for cash in hand. After all you have other names, you are still making a huge profit and the buyer can wait to cash it in. Win, win, since there's a lot of money for both sides. But for $xxx or $xxxx domains it's tricky.

As discussed earlier in the thread, in any cohort of domains of a given quality there is some aggregated probability of a sale at an expected value. So, let's say the expected value of a portfolio sale within 1 year is $10,000 assuming every domain is listed and has an SSL lander on it. The idea of lending $1K to $2K against that expected value does not seem reckless.

Sure, it takes years of experience and an eye for present trends to be able to say what that 1 year expected value should be, but that is what people who get to underwrite these loans will need to be able to do. Industry leaders like Godaddy would have many people capable of doing it. Epik also has a few as well. I happen to be one of them. And fortunately, software provides a basis for scaling model best practices.

ICYMI, the model Epik is envisioning, the "Jingle Mail" scenario of mailing in the keys will not impair the lender because Epik is providing a loan guarantee for the default scenario. In other words, if there is a default, Epik makes up the difference, and/or works out with the lender what the settlement should be in case it is to be settled with domains with the goal being to not wipe out the borrower.

Again, this is all in the name of empowerment. If there is transactional upside, great, but it is not the driving force. The driving force is to make the pie bigger and then monetize some of the larger pie, notably at the exit when the registrant sells or leases a domain to an end-user. I have reasonable confidence that the strategy works because we are already doing it with success. Now we are just talking about scale-up.

In the meantime, with Dan just landing $2 million (congrats Reza!), and talking more about Domain Finance, they too could easily replicate this model and perhaps they will do that. I say "GREAT", and by all means 100 more. If it lifts up more people in more places by connecting opportunity with capital, then we should all celebrate it regardless of who makes money or who takes credit.

 

[Rob Monster]

there are many domainers who do not have a very liquid portofolio... but still receive offers... nearly daily.. and overall profits.. lets say annually... which keep them in the green... but sometimes life situations etc can make such people people unable to complete renewals on such portofolios etc... things happen.... epecially for less liquid folios... and profit ranges which aren't very big aftr all expenses...

that being said.. maybe a solution I am thinking of here.. would be a service whereby the owners of such service .. or better still the community or participants as a whole.. evaluate such portofolios on case by case basis.. and then collectively decide if they want to participate in sponsoring or financing (as in renewals basically) such portofolio.. while the owner cannot. many variants can exist here.. some profit sharing for each sale with participants and sponsors.. etc... i think infinite possibilities! i think this is a very doable model... for people/domainers/participants who know their stuff and which names have potential to sell.. such people can take literally few mins to browse a folio and know of its potential.

what do you think of this idea? would any here be interested in joining into such venture perhaps? we can call it...... DNprofits (.com).

its no small project.. or effort.. but so is everything else. all things start small.

Chad Folkening has been working on a similar concept for quite a while -- tokenized domain assets on a blockchain and then jointly owned and traded.

Check out Contrib.com: https://www.contrib.com/

I imagine there are other models but that would be one to check.

 

[Rob Monster]

Next time you make a poll, make it public in the sense you can see who voted for what. There is an option for that when you make a poll.

I have to point this out tho:



2/3 of Epik employees voted in this poll - https://www.namepros.com/threads/best-lander-amongst-three.1155301/page-3

A poll you won by 6 votes, if you include the 20 employees that voted.

I think all polls should be like that, so you can see who voted for what.

Right now it's 55 - 36.

What if you had 20 employees in that 55, subtract that, you have 35, less than 36. Who knows.

------
Just took a look, check this box off next time - Display votes publicly

If @Mod Team Bravo will change the votes status to being public, I am fine with that. When I set up the thread and poll, I was not expect it to be brigaded. However, if the brigading brings more experienced domainers into awareness about an open discussion of the Aman's Keynote and the subsequent Q&A, I would call that a win. In other words, no regrets there.

 

[Rob Monster]

look @Samer

I don't have anything against you
you seem to be a decent guy

why do you dislike every post I make, that is about Epik?

you may continue to do so
I don't care too much

but why?

Rob does well without you
and I personally grant you every opinion you utter.

If Epik had a fan club, I am pretty sure @Samer would be pretty close to #1 to sign up. His loyalty is pretty extreme plus he does not seem to sleep much. I get thousands of PMs from him, but we have yet to speak on the phone. One of these days that will happen and I might advise him to tone it down a wee bit.

At the same time, let's face it Frank, based entirely on your public comments, I imagine that there are a few people here who might conclude that you have a fairly intolerant view towards Epik and me personally. I don't judge you (though I know who will) and love you all the same.

So, thanks for helping to make this thread the #1 new thread of 2020 and for drawing attention to a critical industry issue that impacts everyone here, directly or indirectly: domain liquidity and bankability. If you could stay reasonably close to that topic and go light on ad hominem, it would be awesome.

 

[JB Lions]

If Epik had a fan club, I am pretty sure @Samer would be pretty close to #1 to sign up. His loyalty is pretty extreme plus he does not seem to sleep much. I get thousands of PMs from him, but we have yet to speak on the phone. One of these days that will happen and I might advise him to tone it down a wee bit.

Hold up, this has my curiosity up again.

When you say thousands of PMs. Do you really mean, a whole bunch, or literally thousands of PMs? Thousands is like stalker/restraining order type numbers. Then, with the Monster's Inc. avatar. I don't know if that was just some coincidence or like some dedication to you.

 

[Rob Monster]

Hold up, this has my curiosity up again.

When you say thousands of PMs. Do you really mean, a whole bunch, or literally thousands of PMs? Thousands is like stalker/restraining order type numbers. Then, with the Monster's Inc. avatar. I don't know if that was just some coincidence or like some dedication to you.

Hundreds of PM threads. Thousand of posts. I try to keep up a bit because I know it is coming from a sincere place and every once in a while he points out something that I missed. I do appreciate the extra sets of eyes and ears that bring me news of something I might have missed. However, Samer is a bit much at times and I am sure he knows it since he often apologizes for spamming me via PMs. He is empowered though and from what I can gather he is just a really big fan.

 

[branding]

would that random guy
felt the urge
to promote epik?

My point is, if a random guy was asking the same stuff it wouldn't be concidered promotion. It's like checking out the competition and asking GD about the cool stuff the competition is doing and if they are looking into offering it as well.

 

[frank-germany]

At the same time, let's face it Frank, based entirely on your public comments, I imagine that there are a few people here who might conclude that you have a fairly intolerant view towards Epik and me personally. I don't judge you (though I know who will) and love you all the same.

@Rob Monster

my view of epik.com is that it's a decent registrar
it makes me nervous that you personally own it 80%

based on what you post here and in other places
I don't trust you

that's no judgment of course...
- just kidding, of course, it is, what else

I'm judging a person
maybe I shouldn't be,
but I am

and I won't pretend that I'm not

I think you are a judging person, too, @Rob Monster
but you prefer to be stuck in wishful thinking
and believing in all kind of fairytales

and that's what makes me nervous about epik



for example
you are judging about cloudflare to be some kind of evil
just 1 example


but as a matter of fact
cloudflare is as supportive as you, Rob


(Matthew Prince is the CEO of cloudflare)

 

[oldtimer]

So, let's say the expected value of a portfolio sale within 1 year is $10,000 assuming every domain is listed and has an SSL lander on it. The idea of lending $1K to $2K against that expected value does not seem reckless.

So this might work for a domainer who is well disciplined that might happen to be low on cash at renewal time, but it most likely will get everyone else who might use the loan unwisely into more trouble and debt.

So one way to make this work (in the case of renewals) is to not to directly give the loan amount out to the domainer, but rather for Epik to apply it directly to renewals (or transfers) for domains that are deemed to have potentials and then to provide some help and advise to the domainer for selling enough domains from the portfolio to pay off the loan.

That might be considered a true form of empowerment, but anything else might cause more harm than good to the domainer.

IMO

 

[frank-germany]

So this might work for a domainer who is well disciplined that might happen to be low on cash at renewal time, but it most likely will get everyone else who might use the loan unwisely into more trouble and debt.

So one way to make this work (in the case of renewals) is to not to directly give the loan amount out to the domainer, but rather for Epik to apply it directly to renewals (or transfers) for domains that are deemed to have potentials and then to provide some help and advise to the domainer for selling enough domains from the portfolio to pay off the loan.

That might be considered a true form of empowerment, but anything else might cause more harm than good to the domainer.

IMO

so now it's becoming interesting
so you say

the average domainer is too stupid to receive a loan
on a valuable domain - that he risks losing
in case he can't pay back the loan?????

 

[oldtimer]

My point is, if a random guy was asking the same stuff it wouldn't be concidered promotion. It's like checking out the competition and asking GD about the cool stuff the competition is doing and if they are looking into offering it as well.

You make a good point, everyone's opinion or questions are important if they are meant to improve things for domainers and the domain Industry, but negativity and wrong intentions should not be supported by anyone regardless of who is involved.

IMO

 

[branding]

You make a good point, everyone's opinion or questions are important if they are meant to improve things for domainers and the domain Industry, but negativity and wrong intentions should not be supported by anyone regardless of who is involved.

IMO

100% agree. Thing is, asking critical questions is often mistaken for showing negativity.

People get offended way too easily this day and age. That being said, I'm Dutch so I'm used to some bluntness

 

[branding]

You make a good point, everyone's opinion or questions are important if they are meant to improve things for domainers and the domain Industry, but negativity and wrong intentions should not be supported by anyone regardless of who is involved.

IMO

100% agree. Thing is, asking critical questions is often mistaken for showing negativity.

People get offended way too easily this day and age. That being said, I'm Dutch so I'm used to some bluntness

 

[oldtimer]

100% agree. Thing is, asking critical questions is often mistaken for showing negativity.

People get offended way too easily this day and age. That being said, I'm Dutch so I'm used to some bluntness

It seems that the whole idea of empowerment through providing loans for renewals (or acquisitions) is getting lost in all the negativity which is a disservice to the whole domaining community.

There are certain situations that a loan could empower domainers and we have to try to find that here without all the negativity.

IMO

 

[Rob Monster]

So this might work for a domainer who is well disciplined that might happen to be low on cash at renewal time, but it most likely will get everyone else who might use the loan unwisely into more trouble and debt.

So one way to make this work (in the case of renewals) is to not to directly give the loan amount out to the domainer, but rather for Epik to apply it directly to renewals (or transfers) for domains that are deemed to have potentials and then to provide some help and advise to the domainer for selling enough domains from the portfolio to pay off the loan.

That might be considered a true form of empowerment, but anything else might cause more harm than good to the domainer.

IMO

Sure, the lender has to make that call on how to earmark funds or if the loan proceeds are entirely discretionary. If someone takes out a HELOC from a bank it can be setup where it can only be used to pay construction vendors for a renovation.

It is possible in the case of a domain loan where the loan proceeds could be not in the form of redeemable Masterbucks but only in the form of in-store credit. We could handle that distinction already today, and indeed already do, as most domains loans are non-redeemable ISC.

Our current domain lending practices are definitely oriented at benevolent bridging versus the opportunistic or even predatory "loan to own" models that I am sure i being practiced elsewhere, including in the domain industry. It is an actual investment strategy.

If you want to understand more about the ecosystem of online lenders and how they get their capital, this is a pretty interesting read :

https://www.forbes.com/sites/antoin...side-the-secret-bank-behind-the-fintech-boom/

It draws attention to this company:

https://www.crossriver.com

I am not sure if they would work with an Epik but they would probably work with a Godaddy -- it would be way more versatile and scalable than a Kabbage affiliate deal.

On the other hand, a true peer to peer lending model has the convenience of being digital and highly accessible but with a much stronger foundation for true empowerment and sustainable win-win.

 

[Rob Monster]

[QUOTE="NameDeck, post: 7624712, member: 1009394" I'm Dutch so I'm used to some bluntness [/QUOTE]

That explains a lot. Another Dutchman shared this with me, and it is helpful for the non-Dutch to figure out the Dutch mindset.

Although Holland has largely fallen from its Christian roots, it did not lose its ability to serve it up straight. They are not being mean. They are being honest.

This might partially explain Shane's reaction to my question to Aman. I was not being rude. I was being sincere about something that matters a lot.

At the time I did not know Godaddy had an affiliate deal with Kabbage, nor do I have any context yet on when that deal was negotiated. What I do know is that Godaddy can do better.

 

[oldtimer]

I am going to be Dutch for a minute and say:

It seems like everyone is trying to extract more money from the Registrants, whether it's the Registries that are unfairly and unjustifiably going to raise the registration fees for domains or whether it's the Registrars that seem like they can't wait for their customers' domains to take their last breath so that they can auction them off on their expiry channels for more profits for themselves. The Elites who usually gather in the domain conferences are mostly out of touch with the average domainers who might be struggling with paying for their renewals and so even the thought of helping the struggling domainers might seem out of place to those who are busy wining and dinning with the Industry leaders who don't want their good times be interpreted with trivial issues such as empowering the average domainer.

On the other hand the domainers who take sides and start attacking one another in threads like this become their own worse enemies as many good ideas that could help them will get overshadowed by all the negativity.

I believe if there are genuine ideas out there that are going to empower the average domainers and help them to become more successful then they must be heard regardless of the venue.

Whether Rob really meant to be on the average domainer's side when he asked his questions at the conference or whether he was trying to make the competition look bad will all come to light by what Rob does now to empower the average domainer and by how he is going to treat those Epik's customers who might have an opposing view from his in some cases and who might not always say what he likes to hear.

IMO

 

[Lox]

... The Elite who usually gather in the domain conferences
...

There's 13.877 domain name collectors / investors ($100M+ / whales ) and they don't bother collecting business cards and can't find 1 good reason why they should attend DN events or talk about the sales.

Regards

 

[Lox]

1. again a privacy breach
2. there was no need to mention the name here

1. mentioned 37 times @ NP since 06-2019
2. agree