Traditional investors & how they see online business

[mhdoc]

I follow an active financial forum focused on conventional investments. Stocks, real estate, that sort of thing. The posters tend to be extremely well educated, many are very technical (IT heavies) and many have sizable portfolios. (millions).

These days they tend to be very "doomish" and are having a hard time figuring out what to invest in. CD's don't pay anything, Real Estate is still going down, stocks are to risky, gold has issues, etc.

I occasionally mention there might be some opportunity with online ventures. Usually no one even responds, but yesterday I got a response I thought might be entertaining & educational to NamePros readers.

I posted that I have a small website which I think would benefit from video and how I think it is amazing I can do that with less than $1,000 worth of video camera and software. Here is the reply I got.

"Is your bandwidth metered?

Do you have a license to use mpeg to "broadcast" the stream? That's not included in any software.

Inevitable Copyright infringement legal fees.
I don't mean to burst your bubble, but if your site generates enough interest, those will be a few of the quality problems you'll have."

Pretty funny isn't. Unfortunately, this is what passes for wisdom on the part of many of the people who you might be marketing your domain names or websites to. It's frustrating to see such a lack of comprehension, but I guess it means there will be a lot of opportunity to sell online businesses in 15-20 years when these guys finally figure it out.

 

[Name Trader]

I think gold only has good issues

 

[DU]

I don't ask doctor about my dog's health.
I don't ask my vet about my health.

Now I won't ask run of the mill investors for advice.

Most investors are very lazy and that fact is the foundation for trillions of dollars worth of financial institutions.

 

[johname]

Real Doomdayer dont care for online investments, they want a farm and gold coins. The problem with gold is it goes down too under the right circumstances even in times its supose to go up. Thats why people say there bullish on gold longterm.

 

[alien51]

I posted that I have a small website which I think would benefit from video and how I think it is amazing I can do that with less than $1,000 worth of video camera and software....... It's frustrating to see such a lack of comprehension, but I guess it means there will be a lot of opportunity to sell online businesses in 15-20 years when these guys finally figure it out.

Well, for one thing, you didn't elaborate exactly how your "business model" works with regards to making money with videos online.

Are you going to shoot racy amateur videos for pay site porn? (A lot of videos from those sites eventually get stolen and dumped to torrent sites, BTW).

Are you making "How To Videos" on YouTube then collect money from Adsense clicks and affiliates? Be the video version of Wikipedia?

Are you going to compete with Netflix and license Hollywood videos for streaming customers?

I think what they have asked you about your "online video" venture, can be legit questions.

Metered bandwidth. That's a legit question, right? In the US, the big ISPs are putting a cap limit on bandwidth hoggers. Videos jam the internet, whether you are the customer or you are hosting them. So i think being concerned about bandwidth, does make sense.

And yes, Copyright is an issue. I think even if they are illiterate when it comes to online business, they are sensible enough to ask about LEGAL complications because they know a blood-sucking IP lawyer can bankrupt your onine venture at an instant. It's good to know they are concerned about being legal, because there are tons of illegal video "business" on the internet.

For one thing, if you didn't elaborate your business to me, I probably would think you are selling bootleg and counterfeit videos yourself. That's the first thing that will pop-up in my mind.

Finally, just because they appear to know little about making money online, doesn't mean they lack wisdom. It may be possible that what you are earning with your business model, is just peanuts to them when they trade stocks on Wall Street which is why they never took the time to even bother with the kind of stuffs you are into.

 

[DubDubDubDot]

Sounds like he misunderstood that you would be displaying your own videos and thought you were going to pirate other's work.

 

[alien51]

Shooting your own original content handycam videos straight to YouTube, is probably the CHEAPEST business model related to online video money-making. You get free bandwidth, free disk space, and free publicity courtesy of Google search engine.

However, i don't know why a person trading hedge funds worth millions of dollars on Wall Street, would suddenly shoot videos for YouTube.... unless he got laid-off, though.

If you asking for FUNDING from these millionaires and you're frustrated that they don't want to give you money because they don't know anything about "make-money-with-homegrown-videos"... well.....

 

[mhdoc]

Thanks for the comments. It's always interesting, if a little shocking sometimes, to see the many ways different individuals view the world.

I played the high leverage, investor financed, game many years ago and it didn't work out so well. That's probably why I get so much enjoyment out of the online game these days. There are all those opportunities that require so few resources no investors are needed.

 

[lincolndsp]

ask a domainer what etf or cfd is

 

[mhdoc]

Certainly I don't expect them to be aware of specifics in another discipline. What I do find interesting is the lack of interest in a potential new area for investment.

It reinforces Clinton Anderson's description of how disruptive technologies grow from the grass roots where almost no one notices them. For example, there is frequently discussion of how the USA is going down the drain with suggestions for other countries to move to, not keeping all your assets in dollars, etc. It seems to me that a profitable website doesn't care where the owner lives. It seems like a few should see that and want to take advantage of it.

I could move a website to a host in another country and transfer the domain name to an out of country registrar in a few hours. That would be hard to do with most assets.

 

[DU]

ask a domainer what etf or cfd is

If a domainer is talking about the doom and gloom of the domaining industry and someone suggests ETFs or CFDs as alternative investments then I would expect more than..

ETFs aren't investments.. they're for traders.
It's short term with diminishing returns.

I just want 20-25% annualized return.

 

[alien51]

I think if you are looking for funding related to emerging technologies and radical ideas, you should ask money from VENTURE CAPITALISTS. They are more open-minded, and amenable to risk.

You shouldn't ask money from guys like Rupert Murdoch (who by the way, lost millions of dollars experimenting with websites like MySpace.com that went bankrupt)

ANd let's not forget the BILLIONS of investment money that burned to the ground during the DOT-COM BUBBLE destruction in the late 90's when people were still doing their online search on AltaVista, and Yahoo was still cool.

Today is the year 2011, this is not exactly the first time that entrepreneurs are investing on anything ONLINE. So taken in the proper perspective, we can't really say that "experts" know nothing about online business.

Perhaps you are just barking at the wrong people.

You might want to try asking opinion from Mark Cuban.

 

[abdussamad]

That's probably why I get so much enjoyment out of the online game these days. There are all those opportunities that require so few resources no investors are needed.

Aha that's right. It's not a capital intensive business. It's a skill intensive one

All those opportunities and the lack of competition is because the market is still immature. Eventually people will wise up and then things will get tough. For now though we make hay while the sun shines.

 

[axus_auto]

The older the bosses, I guess the less inclined and knowledgeable they are towards the online industry ...

 

[interestedenough]

I was thinking in the same lines a few days ago. Not about the websites, but domain names themselves and how domain names don't have the respect they might deserve as an investment. It is true, domain name investment is speculative, but what financial instrument isn't. There are for sure quite a lot of deep pocketed investors that hold valuable domain names... they just keep quiet about it because to the outside, there is kind of a negative connotation to domaining. I think that for some people, the repo man is higher on the value scale.

 

[mhdoc]

My engineer son tells me there is a rule of thumb that it takes about 30 years for technical advances to make it out of the lab and go totally mainstream. I wonder if this is true of domains too.

I suspect that few know enough about domaining to have any negative feelings. Hard to believe, but I don't think I have ever talked to anyone offline who had any idea of what AdSense is and how it works.

 

[interestedenough]

Domain names have had a very short life (15 years since .com started?). Since I am aware of their value (I bought my first one in 1999), I have heard from friends and read expert opinions on how domain names were destined to disappear:

1. In 2002, A friend that knew I collected domain names ( I think of myself more as a collector) contacted me and told me how dumb I was, because Google, with its search, would make domain names obsolete.
2. Then in 2003, new ICANN with its extensions like .biz and .info would make .com and everything worthless, because there was no scarcity.
3. Then in 2004, social networking would make them worthless.
4. Then in 2005, mobile apps would make domain names worthless because one doesn't type in any name anymore, and everything was going to be mobile.

With so many threats lurking around, a 30 year timeline seems infinite. Only time will tell if domain names will survive or thrive. I guess, that this risk is something that makes them less attractive.