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Domain Economic Forum: A Reflection of an Evolving Market – with Soeren von Varchmin

Soeren von Varchmin, CEO of CloudFest and NamesCon, the domain name conference, keeps very close tabs on trends, shifts and changes within the domain name market in order to present the best conference possible. He shares his insights, thoughts on the future, and how that will be incorporated into the newly launched Domain Economic Forum at the NamesCon conference this January in Austin.

Why it’s time to level up NOW: there is a distinct sense of urgency if you haven’t gotten around to leveling up your game. Soeren and Andrew Rosener see a tipping point as the domain market continues to expand. We discuss:

TRANSPARENCY & DATA

  • We agree that the single most important takeaway from NamesCon Vegas last year was Radix CEO Bhavin Turakhia’s keynote, transparently sharing domain company strategy based on DATA… We want to hear more!
  • Big picture industry issues and ideas that need to be addressed, which the conference is breaking down into specific actionable items, “Initiatives to Develop and Quantify the Domain Industry”
  • The single biggest road block to moving forward in the domain market: the need for consensus on how to value a domain name
    •  Idea of investment grade domain names

STARTUPS

  • How to get companies at an earlier stage of startup on their domains?
  • The most effective moment for a startup to acquire the best possible version of their domain: minimum viable product stage
  • Getting the topic of domain names at the center of the conversation is critical: HOW do we achieve that?

MARKET EXPANSION/INCLUSIVITY

  • Growth shift in attendees and what that means for the domain market

SALES:

  • The need for creating new structures for selling, leasing, and joint ventures that benefits everybody
  • GoDaddy taking over as the auction’s backend provider and how that will be a game changer

Any domain investor, corporate domain portfolio manager, or startup will benefit from today’s show!

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This Show’s Sherpas

Soeren von Varchmin
Soeren von Varchmin
Soeren von Varchmin is CEO of CloudFest and NamesCon, and the ultimate combo of tech star and rock star! He plays guitar in a band of tech executives, plus is an Angel, Investor and Advisor to various businesses.

More shows with Soeren von Varchmin »

Andrew Rosener
Andrew Rosener
Andrew Rosener is the CEO of the industry-leading domain name brokerage firm Media Options.

Andrew is widely considered a thought leader and expert on domain name value & methodology as well as domain name sales & acquisitions. With 20 years experience with domain names, Andrew has leveraged his knowledge and expertise to make MediaOptions the Go To domain name firm for startup & company domain acquisitions as well as high value domain name sales.

More shows with Andrew Rosener »

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Interview Raw (Non-Edited) Transcript

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https://www.domainsherpa.com/evolving-domain-market

Today, Drew Rosener and I have a great conversation with Soeren von Varchmin, the CEO of CloudFest and NamesCon. This is not an advertisement for NamesCon. This is a really interesting conversation because you know NamesCon really tries to evolve their content as the market is evolving, so we talk a lot about the changes that they’re seeing in the market, how of course NamesCon is meeting those with some specific actionable items for the conference. We also discussed the big game changer of GoDaddy as the backend auction provider…and the big question, is Wayne the auctioneer staying on?! Enjoy the show.

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Hi Sherpa Network, I’m Tess Diaz, executive producer, domain sherpa.com and today we are delighted to have Soeren von Varchmin, CEO of CloudFest and NamesCon. Hi Soeren. How you doing?

Yes. Good afternoon. Hi, Tess. How are you doing?

Fabulous. So excited. What’s different this year at NamesCon?!

Drew Rosener, our popular panelist at NamesCon, joining us per usual. How are you doing, Drew?

Doing great. Doing great. Little little sick. Working through it. The show must go on. Uh, thank you.

So, Soeren, we’ve heard some rumors the domain economic forum is happening this year at names con. Tell us what’s new, what’s different? Let’s start out with the venue itself. Uh, the entire city is new.

Yeah, but that’s a very good point. I mean, I’m now six or seven [inaudible]  in, uh, with NamesCon in Las Vegas. We thought it’s, it’s time for a physical change off a conference. Um, we, we were sick of the, um, uh, [inaudible]. Uh, that was the main reason. But, um, but for now, um, besides, um, that idea that we do physical change and have a, A) new venue with Austin, Texas, which is an amazing town, uh, B) to sit by purpose. It’s one of the few cities where you can walk everywhere, um, and, and apply to internationally. I recently discovered, so great, great new town venue. Uh, I mean South by Southwest proven, but it’s a great venue for conferences. Um, and um, with domain economist forum, we go one step further. It’s not only a physical change, uh, it’s also a change to the agenda STFC and uh, the whole idea behind. But the domain economic forum is we are asking a couple of questions ourselves and our audience like, uh, one of [inaudible]  what we can do today to make our niche market bigger. And the second big question is what are the real economists shaping the fortunes of domain registries and [inaudible] trust? And around that we are building currently the agenda for name’s con 2020 answering specifically these two questions which I mentioned so far, but let me turn by the round through. What is, what do you understand under the domain economist forum, we brainstorm a little bit since names con European and Portugal town. We had a lot of conversations around that. Um, what’s your opinion about that? So, um,

first and foremost, uh, we just need a shift, a shift in perspective, a shift in content and shift in, uh, uh, even in players. Um, I think Mmm. You know, we, so tell me back sort of names as a, as a, as a conference, you know, clearly it’s developed into Beth domain conference, uh, of the year. Um, I, I love that there’s, you know, some satellite conferences such as the one that you did in Lisbon, the names [inaudible] Europe. Uh, I think that that gives us, you know, as an industry, uh, you know, the ability to have a wider impact. There’s a lot of people, they can’t shop with us because of visa issues or, uh, money or time, et cetera. And I think, um, you know, giving people in Asia and people in Europe and people in South America, uh, maybe it was Sunday in Africa. Uh, I was blown away. I was just in South Africa. I was blown away by the breadth of the startup community in South Africa, Cape town particularly. Um, but I think widening our scope should be one of the primary focuses of the domain industry. We need to grow ties. He said, um, I think there’s a number of ways to go about doing that. If we’re, if we’re, if we all agree that know growing the pie is really the big goal, uh, because it benefits all of us. You know, it, this isn’t a, a, a zero sum game. This is, uh, I believe at least [inaudible] and the industry is still in its infancy that that is a fraction of its overall addressable market. And, um, anything we can do to, to get there faster is good. And so I think getting more, you know, getting domains, uh, educating more people and making domain names more visible to more people. Uh, first and foremost, uh, I think, you know, disrupting some of the narrative that we’ve been having. You know, I think time after time and we’ve got some really smart people in the domain industry. Uh, but I think a lot of the content that we’ve seen over the years is, is somewhat redundant. You know, it evolves as the market evolves. Uh, it shifts as, as, as preferences shift, uh, in terms of, you know, the types of domains that are popular or you know, just what’s emerging in the market.

Mmm. You know, whether that’s a, you know, a new outside industry like, like, you know, crypto or the Chinese boom or you know, the cannabis industry, you know, these are three eggs, XO factors, uh, from, with outside of the industry, which have really shaped the industry and shaped, I think a lot of the content at, at names calm, uh, in past years. But I think, uh, we have an opportunity to, to, to shift sort of, uh, you know, the endo narrative that the narrative within the canvas isn’t there within the domain name industry. And I think, you know, the topics there that will move the needle are consensus on how to value a domain name. I think first and foremost, I think that’s like [inaudible], you know, technologically speaking, the single biggest roadblock that we as an industry face. How does a bank lend money to startups that want to buy our domain names if they don’t know how to value the may, how do these companies get insurance products on their digital assets, which in some cases are the most valuable asset on the balance sheet.

Uh, how do these companies, you know, uh, account for these domain names in creative ways? How do we create new, uh, structures to sell or lease or create joint ventures on these domain names in ways that benefit everybody out of this close minded approach to, you know, I’m the domain owner. You either pay me millions of dollars or you take a hike, right? Because they’re going to take a hike. Uh, but what we really want is to make a deal and to do that, we need to get creative because, you know, I think that there is billions, if not tens of billions of dollars a year wasted in inefficiencies between the companies that are launching venture back, high growth startups that are launching and should be launching on the best version domain name for their company from day one or from day whatever, that they have a minimum viable product, uh, versus, you know, going two, three, four, five years before upgrading from a Dotsie or that IO is some prefix and suffix domain to their RA, you know, on adulterated brand.com, a exact match, brand.com, uh, which in most cases, let’s face it, that is the, you know, that is the, the, the, you know, that’s fifth Avenue.

That’s, that’s three. If you want to be a regret, that’s kind of where you got to go. I mean, you know, the numbers speak for themselves. I think it’s 499 out of the top fortune 500 companies.com. They just, you want to be $1 billion company. You better do it if you don’t, you know, you’re going to pay one way or the other. So, um, how do we get these companies at an earlier stage onto our domains? And I think that’s a really important question, uh, for a variety of reasons, uh, which we can talk about. It needs time. But I think getting these topics at the center of the conversation is critical. You know, um, I think stories are great, you know, new Kelby registries pitching how they’re doing it differently. That’s great. And at the end of the day, you know, you need to address all of your constituents and your GTL.

The operators are a big part of that constituent. And, um, I think there are really important lessons to learn from one operator talking about, you know, I actually, one of the, I would say from the last name’s gone, uh, glass games con in Vegas. Uh, the single most important lesson I learned out of the whole conference, uh, was, um, uh, uh, from the Radix, uh, uh, yeah. From. So when you had, you had, you did like a fireside chat with Bob and, and um, you know, it was about the Radix registry and their numbers and uh, you know, the very data driven approach to how they analyzed which strings they wanted to apply for, which strings to go after the most aggressively their marketing strategy, you know, everything had to have a quantifiable data driven, uh, basis. And uh, you know, again, the results speak for themselves. They seem to be doing quite well. So

yeah, core incidents I’m working today in bobbins in London. Yeah, I mean that’s a good point. I think that was a very good starting point we had last year with this extremely driven approach and the way how Reddick’s actually shared the numbers with the attendees. We got amazing feedback from that. And transparency is so crucial. It’s so crucial. Exactly. And I think there were a lot of like what I would call it, actionable actionable items, which attendees were able to take home from, from that fireplace Chet or a keynote, which, which he was doing last year. And that is something which we put this year into this domain economy forum. It’s all about actionable items, which the attendees will be able to take home after that. And especially with what you mentioned already before with, we call it transparency serious. Yeah. This is something we are building out in 2020 so we are going to have workshops, um, in a transparency series for how to run, um, a domain investor, how to run a registry and how to run a registrar.

So we have, we have a couple of people who will help doing this. These workshops will be half of backend providers, you know, who can, who can help us to, to explain how to run a registry, you know, together with, uh, but guys from registry office Dean as global business intelligence, they deliver with our systems. Um, same, you know, like that’s very smart people who can explain us how to run a registrar. I mean there’s different ways. You know, you have a wholesale guys, you have a guys spending likely, you know, then others will focus specifically on the main investors as a target group. So we, um, we are going to for transparency, serious internet, like how to run a registrar and Ben obviously because it’s 70, 80% of our audience, but domain investors the same here, you know, like showing like pools, you know, which can be able to use and, and how to bring more transparency, you know, into, into this very niche segment.

We always compare ourselves to the real estate industry, but actually being really con because we are so entrance parent as can be and um, the profession is a little bit also what I learned. Uh, and I can in one play outta, um, two weeks ago like having a lot of interviews and talking to people. It’s like, it’s a little bit with question like what, what level of transparency do we really want to have, you know, and, and vet is something we really put like to discuss extremely openly in January with SIA and, and find, find actionable solutions as an industry fight. Yeah. Um, yeah, it’s transparency serious is, it’s one of the two major things we are concentrating on from a content perspective. This is really a big, I feel like it’s a big shift in the slow

for the domain industry. You know, um, I think drew mentioned the content evolves as the market evolves. [inaudible] um, what big shifts are you seeing in the market in general that are driving this? Is it just that you’re seeing, you know, new, smarter investors coming in? Um, are, um, and maybe I should have backed up and asked you to, how many people do you talk to throughout the year? Like, I know you’ve had many conversations with drew about Mmm. Just hearing feedback and looking for how to, um, adjust the conference to the market’s changing needs. How many, how many conversations do you have, how many people do you talk with? And then I guess after that, what, what are you seeing in the overall Mmm, uh, economy that’s, that’s driving that makes you think this is the time for this change.

Okay. That’s, that’s also a very good question. Um, yeah. Um, basically, um, I see it like this. So, um, being deceived off named [inaudible] and our team organizing that event, uh, we just don’t want to do an event. The, we see, we see a larger social responsibility as the largest, um, uh, domain conference in the world to basically try specific themes and to invite in or widening our market. Yeah. So it’d be CBC responsibility and not only to run an event, you know, which everyone likes, but, uh, that people take something home and breakfast actionable items over the year. Uh, and, um, I would say in preparation for, for this event, like over 12 months before I tried to talk regularly to about 20 to 40 people, you know, I would call us my inner circle of, um, how I get the information. And like, people I regularly talk to to get different perspectives, you know, from let’s say truest one of them, you know, but obviously best mess up us, you know, so I, I tried to have a complete, what is cheating on me?

You cover it. Yeah. From the guys, from the backend providers to the registries, to the registrars, the different kinds of domain investors. Um, but guys who, uh, basically providing solutions for the domain industry, but traffic guys, um, the business intelligent guys. So, um, I would say, but in a surplus like 20 to 50 people, um, which I regularly talk to. Um, and so answer the second part of the question. What is driving right now? Um, I think, um, I have a feeling that, uh, it’s picking up, uh, again automatically compared to the last two, three years. We see definitely some growth. Again in the secondary domain market, we see prices going up slightly. Um, we see that some players are actually helping the whole industry to, um, to become better like go daddy being very aggressive, very good in marketing, um, helping people to understand basically the value of domain names. And, um, I mean in general it’s becoming, it’s, it’s becoming a little better to, let’s say two, three years ago. And, um, I mean it’s, it’s a combination of things which, which definitely is striving back, but we see it picking up funnel. What does your opinion true about it?

Yeah, I mean, um, you know, I think, I think that, uh, in general, one of the big problems that we have is an industry [inaudible] ourselves as one complete package. And, you know, um, I would say like the main aftermarket, uh, hold on the wholesale aftermarket. So the domain investors trading with other domain investors are trading with, you know, industry companies. Um, not the end user market. Uh, but, but the wholesale aftermarket is about as bad as I’ve ever seen it. It’s, it’s, there’s very little liquidity. Uh, the only liquidity you find really is in the expired auction marketplace on go daddy, which is grooming, right? The prices are basically, so, you know, domain goods made sell for end user prices in the expired auctions. I go that in house. Uh, most of the main investors are priced out of the market to get good names, uh, when, when they drop on, uh, on go daddy.

Um, but if you are on some of these other, uh, you know, outlets, auctions, forums, uh, it’s dead. I mean, it’s just, it’s people talking amongst themselves. There’s no transactions happening. Uh, if you need fast liquidity, there’s very little out there. Uh, you know, it’s, it’s pretty ugly. I mean, I have people coming to me daily that are complaining. Uh, you have people who are leaving the industry. We’ve been in it for three years. Mmm. But, uh, you know, it’s, it’s just, it’s not good. It’s not good. But the, those people represent, you know, probably the lower, let’s say 95% of the market there. They’re trading in smaller names or maybe investing in, you know, names that aren’t very liquid. Um, and what I find so interesting is that on the flip side, on the whole, on the, on the end user active market, [inaudible]

boom. I mean, we’ve been, uh, media options is, you know, 12 years going on 13 years now. And, um, no, sorry, 12 it’ll be, yeah, 12 years this month, I think. 12 yeah. 12 years, 12 years this month. And, um, uh, you know, this is the busiest we’ve ever been. I mean ND domain sales, you know, and again, we’re focused really on the top 2% of domains, but those domains are selling for higher prices than they’ve ever sold, sold for before. Um, you know, we just sold a four letter.com domain that we owned that we’ve been negotiating with the same company for three years. Now you can easily say, well, okay, the company grew up to a level where they could afford to buy the domain. Uh, in this particular case. That’s, that’s, I mean, of course the grown over those years or they wouldn’t be here.

Okay. They could easily have afforded to vitals domain three years ago when we first, when they first engaged with us. Uh, and I think what has changed is the perceived value and the [inaudible] known scarcity of, Hey, I better take this name off the market because otherwise it’s going to go somebody else and they’ll be off the market forever. And, um, so I, I find it so interesting that there’s this dichotomy of, is one of the worst Vester wholesale markets I’ve ever seen. And one of the best end-user at the markets. I’ve ever seen. And so where’s the discrepancy? Why is that happening? And, uh, and I, and I have some, some, some guesses as to why that’s happening. Um, which again, I think he’s great. You know, it’s got to the nighttime, but, uh, it’s just an observation that I think is really important to point out because it’s a very strange scenario that you would have more end-user sales at higher levels than ever before.

At the same time you made it. That’s you’re struggling, uh, to make sales, make any sales. And I think that, uh, I think that the conversation there again, it should be focused on helping doing investors understand what domains have value, what domains represent investment quality, domain names. Um, you know, maybe we should scrap some of these words around premium domains. You have domains which are investment grade, right? And investment grade stocks, art, you know, stocks which have companies that are profitable or a path to profitability. You know, they, they, they meet certain qualifications are of a certain size. If you’re in your hand registering domains, those are not investment grade domain by definition. Because if they were in order to be registered, so, uh, we’re, we’re just at that point of maturity in the market, right. So I think, yeah, there just needs to be a little bit more, Mmm. Sort of hard talk, you know, a good direct learning and education and actionable talking points, you know. Um,

so what I really hearing, you know, from my 14 years in the industry is this change from, because before pretty much anybody could show up, let’s figure something out and make a profit. And we’re having a change where domain investment is basically getting harder, but there’s even more opportunity for profit at, at the ultimate. Excellent. Um, and I think too, probably soar in, you would agree that we’re seeing a higher quality of demand investor coming in. And we also have a lot of qualified investors who’ve been dabbling for years and years. But basically it’s like, I’ll get around to it, I’ll just pick up another name, but I’m not going to evolve my game to the next level because there’s no pressure. There are, Oh, sorry, I muted your saw. What were you gonna say?

That’s, sorry. No, I think you, you, you made a really, that’s a really good point. So, um, you know, in terms of like what’s changing and how do we change that narrative and what, what, what can we do that’s actionable? It’s like, you know, let’s talk about some of the tools that are either coming or should somebody should build that would solve some of these problems. Let’s talk about these new mechanisms by which we can all start promoting our domains. Um, let’s talk about new ways to structure deals that will, uh, create liquidity where it didn’t previously exist, where, well, you know, we can grab some of that inefficiency. So when I say inefficiency, it’s like, alright, and you want $100,000, here’s a startup and they don’t have $100,000, but they would be an ideal candidate for your domain. You’ve been sitting on this to me for 10 years.

It hasn’t sold. So what’s your opportunity cost by sitting on it for another 10 years versus saying, okay, let me give you this domain for 10 grand, which will buy you $100,000 oxygen. The bite is the made for a hundred grand at anytime in the next five years. And you can start leasing it for 1% of the purchase price per month. So $1,000 a month, you know, less than your hosting costs, probably less than your, you know, the guy that gets your, for your woman that keeps your floors clean, like, you know, keeping your floor clean, more important than your global digital brand. Probably not. And if it is, no, uh, maybe you need to rethink your business. Uh, w w you know, in what world does a intelligent startup founder not take that deal, right? Oh, I can brand on my perfect.com brand on day one, which is gonna help me with fundraising, which is gonna help me with him.

Uh, re retaining employees and hiring. We’re just going to help me make with a cofounder if I need to, which is going to help me, you know, just with my marketing, my trust, my conversion rates, my cost of customer acquisition, right? Like, so all of those things I just mentioned, it’s a pool of, of efficiency and efficiency is money. So this is whole pool of money that we as a domain industry aren’t touching. You know, we’re touching maybe one and a half to $3 billion a year. I as in, you know, an aftermarket or the domain aftermarket. I think that we should be touching around 10 to 15, maybe even $20 billion a year. Uh, and I think we could do that in the next three to five years if we solve some of these problems. Grabbing that fricking grabbed some of that inefficiency.

Yeah.

Dope. Now, you know, it’s like, you know, right now what’s happening is that’s an Oreo I just laid out. It’s, you know, some domain investor goes, you don’t want to pay $100,000. Okay. And he sits on his hands and then he sits on that domain for the next 10 years. And that pool of liquidity that we just talked about go somewhere else. Right? It goes to hiring more employees. It goes to marketing, it goes to [inaudible] whatever else. And maybe, or maybe not they ever come and show up and buy you to me. Yeah. But means industry need to go out and drag that [inaudible] is solving problems for these people. Solve problems for the people that want our domains, create efficiency for them, which provides value to us. If you provide value to them. Money chases value. So if we can provide value to them by solving these inefficiencies, we will earn money. We being, you know, domain investors, uh, marketplace is brokers. Anybody who is, you know, on the transactional side of the dominion history.

Yeah. But look, I see it exactly the same way. Um, and, and to maybe answer of the second part of, uh, test, test question. Um, I, I was thinking what can we do as, as name’s Khan, to basically understand the market, really picking up and working well, you know, let’s concentrate on bat part, you know, so, so it’d be left thinking, what can we do from our side to, to enable that, you know, to bring more speed into it, to, to go into the second or third gear for now. You know? And, um, so I mean, at the end it’s all about the buyer, right? They’re all interested in the buyer. And the premium quality buyer. So, um, that’s like three audiences which we can concentrate on as an organized, it’s the startups. Yeah. Itself. This is a try. You know, we are doing it in Omni hotel and Justin to this Omni hotel in the same building is this, um, uh, social factory in Austin, which hosts more than a thousand startups.

So we do some program for both who are interested to learn more about the domain industry. It’s a try. You know, we, we will try, um, to see, but it’s like one audience, you know, which we are concentrating on the second audience, um, which we are seeing more and more coming to NamesCon specifically over the last three years since I, I’m able to observe it. It’s um, you get more and more for the main portfolio managers of fortune companies. Um, let it be like three years ago when I first went through the attendee list, it was five or six of them, you know, the year after it’s 10, instead of very small number, you know, but we see more forthcoming and also in our marketing and outreach, we are concentrating more to get this specific person. You know, it’s, it’s usually a one man show, invitee T department, you know, bitches and shops for 10 or 20,000 domains and fert uh, uh, and um, also very important.

I’ve a print agencies, obviously target groups. So for us it’s like what can we do to, to concentrate on this top segment, you know? And it’s basically for us it’s inviting these type of attendees concentrating to get this type of new fresh plugs into the industry. And match-make obviously if the domain investors, so they’re concentrating on and you have a part is to put more transparency into bed. It’s a very small industry. We all agree on back. You know, if you look at, let’s say public listed companies in our field, Eva public listed or private private equity owned, there’s not so many, you know, that’s, that’s just like three or four analysts in the whole world. Um, who are basically covering companies in our ecosystem, which are public listed, you know, best very silent GoDaddy, but just the two of them, the big ones, you know, three or four which are covering the smaller ones, you know, let’s say, but once like two cows or MMX or central Nick and so on. So that is also something which would be like to try, you know what I mean? There should be much more coverage coming from and spell, you know, in order to, to, uh, widen our market, you know, so that is a Napa Trav itch, which we are currently doing, you know, to identify with people and getting them over to our conference and um, yeah bet it’s we believe which needs to be done, you know, we need to be more talk about it. So that’s good for people that here, you know, who talk about it.

All right, great point. Great point. And I think I’m right along with that. One of the other big sort of hurdles that I think we have to address is just breaking down that, that, that friction between the domain industry and everybody else, right? Like there’s this inherent in implied and perceived friction of good, bad, good, bad. You know, it’s just like we need to get past that. Uh, you know, there’s no w w w when a company, a startup is looking for a headquarters or you know, if you want to use the real estate analogy or, or if they’re, you know, any other product or any other service, it’s not a, it’s not a, you know, a, a, a, what’s the word? Um, a adversarial relationship. It’s a, you know, it’s a partnership. Uh, we’re trying to add value to you. You’re trying to evaluate why, you know, it’s, I don’t know why that friction needs to persist. I understand why it’s there. Because in the early days of trademark infringement and you know, the wild West, you know, we, we did it to ourselves. You know, we shot ourselves in the foot and hopefully we’re far enough past that now. Um, you know, it’s not perfect, that’s for sure. And there’s still problems that persist, but hopefully we’re fighting to pass that now that let’s figure out how to eliminate that friction that’s changed the perception. And so, uh, I think that’s also a role that you guys can, can help play.

I think the complete answer to that problem is education and communication, especially connecting like in person at names con. Um, I think that education, you know, I think the reason that a lot of the friction continues no matter what created in the beginning. People walk in with their misconceptions basically on the brand and they think domainers are jerks with astronomical prices for no reason. And so they need to be educated on how to value a domain. What’s behind that? And I think on the domainer end, um, there are a lot of domainers who don’t understand that they are, um, not only devaluing their own domains, but any domains when, you know, some poor corporate brand manager or portfolio manager is receiving, you know, a thousand unsolicited emails a day about why they should buy this trademark infringing or otherwise just stupid, um, domain name. So, um, for domain investors to learn how to speak to them, who to speak to them through what they’re

looking for in value beyond just, well, obviously this is an awesome domain. Um, and I think that you’re really addressing both of those problems. RN and, um, I’m, I’m excited. You know, I feel like 2020 is like definitively the, um, isn’t that the year that um, cars start to fly? Don’t you remember when you were a kid? Like it was 20 totally didn’t all the movies of the future. It wasn’t everything in 2020. Um, so it seems very fitting to me that we’re going to start the year off with what I really am. Searing is a big shift because of a lot of opportunity. And drew, you know, I hate math, but you’re saying maximum right now at three, 3 billion, and you think of the next three years we’re going to be looking at 20 billion. That means we’re at maximum where did 15% of where we could be or should be or will be in the next three years.

Yeah. I think, you know, obviously that’s a pretty ambitious prediction, but the reason that I say that with some degree of confidence is that you have some really big macro, uh, trends and factors that are ducktail and you know, the emergence of crypto and people’s sort of understanding and acceptance of digital assets. Uh, the fractional economy, uh, where people can fractionally invest into assets. People can fractionally participate in the use of an asset. Uh, these are all concepts that if you went back five years, they didn’t exist. People didn’t, yeah. This was not something that you could even talk about in the mainstream. And now it’s household conversation. Mmm. You’ve got, uh, this massive shift of, you know, which is just, you know, now it’s just accelerating, uh, exponentially where, you know, shift from retail commerce happening at the brick and mortar street level, moving all to digital, right?

Uh, you look at like real estate investment trusts. Again, coming back to that real estate analogy, a retail driven real estate investment trusts, which are just no publicly traded funds that own large amounts of physical retail, real estate, sorry. Many of them, particularly the early ones were very focused on commercial retail, a real estate, say particularly mall shopping centers, strip malls, et cetera. And those Reese, um, are hemorrhaging value value because more and more of the retail spaces sitting empty real for lease or for sale sign on it. And that trend is, is growing very quickly. And uh, as uh, mr Einstein said E equals MC squared energy is a constant, you can’t energy and, and, and, and everything is energy. So it’s ultimately, it’s like the value of commerce isn’t, it’s not shrinking. Okay. Value commerce is in yours. Stay neutral. Or maybe we’ve got some slow global growth, but the only place is growing is in the digital economy.

And all of that value that’s shifting from the, the retail brick and mortar economy is shifting to the digital economy. And domain names are the underlying assets of the digital economy. I’m just, I’m sorry, it’s just [inaudible] don’t, no, there’s a lot of people to try to dispute it, but it’s a simple fact. Mmm. The land, you know, underneath Manhattan is the, the underlying asset of the Manhattan economy. Plain and simple. Without it, it doesn’t exist. Um, so, um, I think that for those reasons and a whole slew of other ones, uh, you know, we’re finally hitting that tipping point of where like, I think it’s the next three years we’ll have doubled the number of people online from two years ago. Um, we’ll triple the number of businesses online and, you know, all of them, uh, or some percentage of them are competing for this digital real estate.

And, you know, of course the best is always going to [inaudible], you know, accelerate faster than the rest. I, I think, um, yeah. This is again, another topic that we can discuss, but there’s a lot of things happening that’s people are probably aware of did, you’re not putting the pieces together to understand how this is going to impact the main names and it’s almost everyday now I feel like I’m seeing some piece of news that’s, you know, on the fringe that I say, Oh, there’s, you know, just a nother needle in the stack. Right? Like, okay, no other reason to support the growing value of domains. Um, you know, I, I don’t think there’s any big change here. I think it’s just, you know, the curve is accelerating.

Yeah. I totally agree with you and I think you made an amazing summary of macro economics, which are basically helping to boost that whole industry right now. And it’s kind of up to us what we do out of it, right? So, right. So

we can just run us over, we can have this conversation and say, Hey, okay, here’s the opportunity. How do we get our arms around it?

Right? Yeah. The last couple of weeks I got a little bit more into this fine violin industry. You know, my, my son plays very good violin, so he’s at the age where his fingers are dug thing as now. So we went shopping, you know, 14. Yeah. So basically, um, we went to this, um, store here in London, which is supplying which the supplier for a Royal family. So it’s like a 250 year old company or whatever. And I was able to compare like some of the economists off of like, let’s say, but fine violent collector market to the domain industry. Yeah. So look, I mean, it’s very simple, but it’s like only 80 study bodies left in the world. So it’s limited the deep supply, you know, but it’s available more, you know, it’s like very, very limited, you know, and it’s the same, let’s say, if you can compare it very well with two letter of comms, you know, there’s 580 combinations, but it’s not more, you know?

Okay. You’re right. Okay. Um, okay. It’s very, very limited, you know, so, um, and the same like in this violent business compared to our domain industry, there’s some certain in transparency, you know, for collectors. Yeah. Um, however, I mean the fist physical good, it has to be advantage, you know, in the case of my son, um, it’s basically someone super rich, you know, bought a wild land, which is 300 years old and, and basically gave it to my son to play it, you know. Um, so, you know, the owners of foes violence doesn’t necessarily don’t need to play them or need to use them. They make them to people, you know, who do it better or it, and that is something, you know, but done, you know, from another asset class, you know, like compare that to our domain industry and we also to get some ideas which we were discussing in preparation, you know, for business.

Like how, how do the make this asset class bigger, you know. Yes, instructional ownership is one of them. But I think another big thing which we need to answer is like, look, we all are getting older, you know, like, look at, um, at, um, um, at one point, you know, we have to think about what’s happening to our domain portfolio. You know, if for the people who will inherit it, you know, but it’s something which was never discussed before at any of these domain conferences. But it’s one of the topics which we, which we put high on the agenda, you know, and I think it will be very, you know, for, for a lot of just,

you know, we got to go to BP. I just met, I went last week, I was invited by my law firm, uh, to, uh, come to this a startup event. It was a startup pitch contest. Uh, the locker room has like a little incubator that they do. And, um, uh, there was one company that I really love because it’s, you know, it solves this problem that I’ve been thinking about a lot, which is exactly what you just talked about, but not just for domains, but also, you know, cryptocurrency for passwords for how do you manage that and pass it on and provided proper instruction. Um, you get the, the right people involved, uh, in, in, in, you know, the handover, the management, et cetera, monetization. And these guys, uh, inadvertently they, you know, they weren’t focused on domain names at all, but I think they actually solved it. The first solution I’ve ever found. It solves the problem. Why? Well, um, and I, I, so I’m talking to these guys, I think I’m going to invest in them, but maybe I should tell them to come to a Austin and, and you know, uh, talk about what they’ve done. Mmm. But yeah, but you’re right, that’s, that’s another, you know, buttoning up all those sort of Hillary things around the asset class that exist in other asset classes. Uh, it’s so critical to moving forward.

[inaudible] true.

That’s super interesting. So who, who’s your, who’s your topic expert, um, if you could say, I don’t know if you can say or not, but that subject, is it a lawyer or is there somebody trying to, is there somebody actually with a solution? I know Demain guardians had sort of attempted at some point, but uh, I know, I don’t remember why, but maybe rebranding to a variety of problems and pursue it, uh, on the subject of, you know, um, passing along domain portfolios to the next generation and what will be done with it. And um, you know,

to drill. Are you thinking that Soeren is saying he’s going to have someone speak on that?

Yeah. Well, uh, it said it was, you moved that up to a quite high, I’m the priority list of topics to discuss. Is there, is there something scheduled?

Uh, it’s the filling

[inaudible]. Okay. But it’s a super interesting topic. That’s the topic I want to go watch that topic. Okay. Because it, you know, it directly affects every single domain investor, you know, at the show.

Yeah. But it’s actually a good reminder. We are just at the time where we are filling the agenda daily, you know, so one who watching this, this episode of dementia, it’s the right time to get in touch with us right now. For, for anyone who wants to see page.

Yup. I know. So Adam Strong and Jen sail. Uh, uh, I think Mike Roberts, uh, when he was still involved with that group, Mmm. They had launched domain guardians at some point and they were trying to solve for that problem, but they shut down. It didn’t, it didn’t really get anywhere. Okay.

Would be before, I don’t know what, what roadblocks they hit, what needs to be overcome to take it to the next level. I don’t think they have really any ambitions of redoing it, but it could be interesting to have them on the panel.

Just talk about what were some of the hurdles they ran into so that somebody else solve for that.

Yeah. So Soeren, are there any speakers you can tell us about or you think we should just keep our eyes out for, for further announcements?

You know, I sought for FERPA announcement. It’s just the time of filling. Why, why be talking and record that episode. But we’ll look a little different a little far, but down into December and two or three weeks. So we are filling it in the background. We, before people would publish the next steps. So, um, I think it’s good if we touch base again in two, three weeks from now. Perfect.

Yeah, just real, you know, real quick, what, talk about the auction. I mean, you know, my favorite part of the name’s Todd is always the auction. Um, uh, what, what, uh, you know, you’ve got GoDaddy now hosting the auction. Uh, but I assume the format of the live auction will some more or less be the same. Are we still going to have Wayne, uh, Monty’s running the auction? What, give it, give us some insights into the auction?

Yes. So, um, I mean what you saw last week is basically when ounce meant that we changed the backend provider to go daddy, which I see as a future advantage because it will help overall in the industry with the marketing power in order to promote the mains and this idea of this life option much more than ever had before. Yeah. So very, very good point. Especially on the marketing side, you know, but back end is now based on GoDaddy. So Monter and [inaudible] team are working very hard right now to basically adverse life option functionality to [inaudible] platform, but it’s working great. And um, yeah, I mean it just opened for submissions, you know, it’s submission time, you know, you can go to names, contact global. I think we have a block entry bail and be um, uh, about for auction but for link, you know, to submission page.

So it’s time right now to submit to mains and Monter and for go daddy team is already busy looking into everything what is coming in. Um, I mean beside of that, Wayne will be there. Yeah, I mean it’s great. You know, it’s his home town, you know, where, where this takes place. So he will be extra motivated. Uh, this awesome and jet lag. The S and less Chet lag. That’s true. And um, I mean from performative will be the same, you know, whether it’d be was free for 500 domains, Enbrel optional including extended options. And so one and and life we will have our 120, 150 domains which are going over the taper. And, uh, what is also import this, I think the whole scenery will be much nicer been in the Tropicana in Las Vegas. So we hope it will also any mate, uh, to, uh, to get the high end bigger results. Um, but in general, I mean, I see, but SB

okay.

Over the next years I see that as a major point, um, how we can grow NamesCon as an event, uh, putting more and more focus on it and now have been provide back and provider in place. I’ve been also the marketing power to, to go to new steps, you know, which we can reach in the auction results.

[inaudible]

I think it’s super fabulous that I go, daddy’s doing that part of it and that Wayne is still on board. I love, love the combination. Yes.

Yeah. Yeah. I mean it’s a game changer to have the reach of GoDaddy to be able to, you know, I hope that they use that reach, uh, to promote the auction and to, uh, you know, sort of bring awareness, uh, not just the auction but also the conference. Cause there are so many startups in Austin, uh, you know, it would just be such a great opportunity to sort of draw them in. Uh, you know, I dunno, I don’t know what kind of outreach you are doing or have done or plan to do, but you know, even just to invite them, you know, it’s like, how do you get somebody interested in, you know, car racing? Well, you know, you don’t, they don’t get excited watching it on TV. They will, they get excited about going to a race here in the engines war and, you know, seeing this car black by him and, you know, the blink of an eye.

Um, I, you know, I would think, and obviously I’ve got a biased opinion here, but I would think that this would be something that a lot of startups were local. If they’re available, you know, allow them, uh, allow them to come to the auction component of the, uh, of the show for free. Like, you know, you guys earn on the commissions. Um, you know, it’s good for everybody, but like make it an open invitation for anybody who wants to come. Uh, to be, uh, you know, you don’t have to necessarily put it up on the website, but maybe you do a targeted marketing approach, you know, reach out to like South by Southwest or reach out to, you know, some of the local startup incubators and say, Hey, any of your members, any of your participants, Jen, you know, whatever, uh, are welcome to come to the auction.

Uh, you know, that you can buy a ticket for the show or you could just attend the live auction event. Uh, and, uh, I just, I wish I had it. I’ll, I’ll look for it. And if I, if I find it, I’ll send it to you, but I just read this amazing article, I don’t know if it was in vanity fair, but it was about, um, how, uh, live auctions are making this massive, where they had sort of been sort of dying off and people prefer to not amenity. And you know, it’s becoming sort of a new way of showing social status, you know, a new way of, you know, sort of community. And there was all these elements that I, you know, never had clicked for me, but it was, it was a really interesting article. Um, you know, it was about a watch auction and a car auction and it was about, you know, how the topic of the auction became actually less.

Basically what they figured out is that the less they pushed it as, you know, a commercial auction and the more they made it about, you know, bringing together interesting people to be in a room for an event. And Oh, by the way, you can buy some of the best watches in the world, the most exclusive and rare cars. Uh, you know, it’s like you bring together your proper audience in a room and you say, Oh, Hey, by the way, we’re selling some really cool things that I know you guys are interested in. Uh, it works. It just works. It, it creates a magic that works. Uh, and they had their highest selfie rate. I think it was a record setting auction, you know, it was, it was, I just, what I remember from my takeaway was that it was done in a sort of new format.

It was a little bit of a risk and it worked. And they talked about some of the reasons why it works and uh, I think that, you know, getting those people, I mean get the local VCs, get the local startups, get the founders, get the guys who are, you know, the exited, you know, if you can somehow reach those folks and say, Hey, we’re going to host a live domain auction, a free booze show up, get a paddle Bedford domain. Right? Yeah, they’ll do it. I think people are just enough intrigued by the domain industry, but they’re like, Oh wow. And you know what, those people will probably buy a ticket and come to the whole conference next year

and it could be a year over year build. But drew, when you say an auction, there’s the roar of an engine and the burst of a car passing you somehow I feel like you are describing yourself.

Yeah. I became one after I went to my first formula one race in Montreal. I was like, Oh my God, this is the coolest sport ever. Uh, and then now they quiet motors and I don’t care anymore.

Well, I’ve always loved the auction, but um, but my favorite part about it is CMU. I’m Soeren speaking of Montreal. Any key takeaways or things you want to share before we wrap up about the ICANN conference in Montreal? A couple of weeks ago.

Oh wow. Faucet was a super busy time, like catching up with the sponsors and potential sponsors. So it was basically running from meeting after meeting and having a couple of, um, evening social events, um, to participate and to be like, I didn’t get March, you know, it’s because we were just concentrated so much on us, you know, talking to the stakeholders and also getting feedback on our ideas from various parties, you know, sponsors and partners in the ecosystem. Um, so for me it was just free days flying by extremely fast, to be honest.

Fair enough. That’s okay. All right. Well, I think we’ll probably say the same about a name’s con in a couple of weeks. Really. Uh, I’m looking forward to seeing you there. Yeah. Thank you for taking the time to tell us what’s new and different. Drew. Thanks for jumping in and being our loud race car and get, get your, get your workouts going for your paddle holding. It’s common to say hello to bobbin. Thank you for can you use your, don’t say hello to him. Have him and bring him. Um, he was, I think the most talked about keynote I have ever heard after a demean conference. Uh, bring him back. Bring him back. All right.

Either talk to them about it now. Thank you. Bye. Bye.

 

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2 Responses to “Domain Economic Forum: A Reflection of an Evolving Market – with Soeren von Varchmin”

  1. Albert says:

    One thing I will never understand is why you did the show in Las Vegas in the coldest season.
    You probably would have had much bigger turn outs had people known that they (and their family) could have gone in the pool areas, outside events without having to worry about freezing, etc.

    At any rate, nice overall all review.

  2. Saro says:

    Really interesting interview:

    Many great major points were touched upon. Hope there will be more interviews with this caliber and guests that can go more in detail regarding the points that were brought up.

    Godaddy is often mentioned on the shows, but rarely see a top guest from Godaddy on, maybe that can be a really interesting.

    Thanks.
    Saro

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