In 2007, Aaron Patzer traded more than 1 percent of his personal-finance company's stock for a single URL: Mint.com. And the technorati issued a collective gasp, because giving up equity for something so intangible as a domain name seemed an extreme measure.
Still, anyone doing business on the Web knew that prices for prime URLs--those prize four-or-five letter, easy-to-pronounce domains--started to sneak into absurdity in the late aughts. (Remember when Toys.com went for $5 million and Fund.com went for $10 million?) Today, good gets are increasingly harder to find. In 2013, unregistered four-letter dot-com domains officially went extinct. Those searching for virtually any URL not yet in use are quickly reminded that, as ever, hordes of shady prospectors own the undeveloped real estate.
"It's a Wild West," says Parker Conrad, co-founder and CEO of Zenefits, a human resources software startup, largely because, when it comes to getting that ideal URL, "there is a supply of just one."
Jesse Draper, who hosts a talk show about entrepreneurship called The Valley Girl Show, knows it. She spent time over five years pursuing her dream URL, ValleyGirl.com, at times going to such extreme lengths that she started questioning her morals. I first met Draper when we were both planning trips to the Midwest. I was traveling to see my family; she, to knock on the front door of the woman who owned ValleyGirl.com to offer her fresh-baked cookies. Draper's logic: Maybe if the domain owner accepted cookies and conversation, she'd potentially accept a wad of bills in exchange for the URL.
See, it had been two years of emailing, calling, and snail-mailing hand-written letters to this URL-owner, who wasn't using that primo Web address in any capacity. But Draper, whose father is the legendary venture capitalist Tim Draper, was conflicted about how much further she should go. "I found out her name, though it wasn't listed publicly on her GoDaddy account, and then I did an online background check, and found her home address," Draper says. "I literally looked up her house on Google Earth. I knew everything about her short of her Social Security number. How creepy is that?"
Draper stopped just shy of turning up at the domain-owner's house. (Ultimately, her father secured it--for about $4,500--through repeated phone calls, and gave it to Jesse for Christmas the following year.)
What to do when $1 million isn't enough
Other savvy entrepreneurs have developed an arsenal of strategies--some deft, some underhanded, some mildly deceptive or worse--to acquire the domains that will become the cornerstones of their brands. One simple path to success, and to avoid paying an arm and a leg? Don't be yourself.
Matt Mickiewicz and his co-founders lucked out when starting up their tech-talent recruitment site. The day after brainstorming a new business idea at a pub in San Francisco's North Beach neighborhood, Mickiewicz's co-founder Douglas Feirstein simply purchased the domain DeveloperAuction.com for $1,600 and sent his newly minted co-founders a receipt.
Soon after launching the site, though, the name started to feel imprecise. Mickiewicz, Feirstein, and their co-founder, Allan Grant, started pondering a rebrand. "We were finding jobs for designers and data scientists, too, not just developers," Mickiewicz says. "And it wasn't really an auction. So we'd start every conversation about the business by defending the name."
Developer Auction paid a branding firm to come up with some new names. One appealing option, Saffron, hit all the notes of a good startup moniker: It was unique, phonetic, and had positive associations. As a bonus, the domain was owned by merchants at a local shop, down on nearby Valencia Street in the Mission District.
Oh, if only those merchants weren't so savvy. But the surrounding local tech boom certainly hadn't been lost on them. According to Mickiewicz, when he approached them to make a deal, they laughed, saying they'd expected an offer--and had already received offers--that topped $1 million. Cross Saffron.com off the list.
But the co-founders discovered an Australian firm, which had listed another promising name the branding consultants proposed. The price: $250,000. A lot of money, but the name--Hired.com--was ideal. Rather than risk being Googled as founders--each of the three co-founders had previously built successful tech companies--they enlisted a male friend to pose as a woman, with no link to startups, to begin negotiating.
A handful of emails later, "she" got the price down to roughly half the $250,000 that the sellers sought.
"The important aspect was that the Gmail address doing the asking wasn't associated with me or my LinkedIn profile," says Mickiewicz, a serial entrepreneur whose other successful startups include 99designs, SitePoint, and Flippa. (Mickiewicz has an inside perspective on the domain industry: SitePoint, a tech education site, covers them, and Flippa is a website, app, and domain marketplace. And Mickiewicz still owns hundreds of prime names, including the three-letter Yet.com.)
Still, he is a bit shocked the deal worked out so smoothly. "The original buyer had registered the domain in 1998," Mickiewicz says. "He must have had thousands of prospective buyers contact him. Why he chose us is beyond me. Luck, maybe."
'My name is an alias, too.'
In a somewhat similar vein, when approaching the owner of Zenefits.com, Conrad had a friend--an associate professor at George Washington University, far from Silicon Valley--make the inquiry. She (in this case, an actual woman) said she wanted to create a blog about fitness and meditation, and offered about $400, Conrad said. The seller asked for $750. She negotiated. It worked. Final price: $650.
Jessica Scorpio kept the gamesmanship in-house--at least initially. Her company, the car-sharing startup Getaround, had already launched, to some acclaim, at TechCrunch Disrupt. But her company's Web address had two t's: Gettaround.com. "Honestly, when I bought it I was thinking of the Beach Boys' song, and just typed it in like that," Scorpio admits. Still, she understood the correct spelling was far more preferable.
"We knew it would be super important to get the [real] domain," and soon, she said, given Getaround had already earned some press coverage. "We didn't want to be a funded tech company asking to buy the domain name."
She created an alter ego she describes as "me but with no connection to Getaround," complete with Twitter and LinkedIn accounts and an email address, from which she sent an inquiry to the owner of the domain, a big seller of URLs who responded that the price was more than $100,000.
So Scorpio tried Plan B: to network her way in, meeting others in the domain industry. She finally found someone willing to reach out to the owner to say, "Hey, can you give her the friends-and-family deal?"
"The funniest moment," Scorpio says, "was when I had to tell my new friend" that she was operating under an alias. The industry contact "turned around and said, 'Oh, don't worry. My name is an alias too.' "
Eight months after starting her hunt, Scorpio scored her URL for a fraction of that original price.
She was overjoyed, but described the process of acquiring the URL as emotionally taxing, and a bit of a rollercoaster. "It's exhilarating. You're in the negotiations. You are intentionally being rational. You don't want to seem too eager," she says. "There are a lot of complex emotions involved."
That kind of perseverance is often a prerequisite to scoring a dream URL, especially if it's coupled with an eye for opportunity.
Jeff Braverman went hunting for a URL in 2008, back when consumers were finding his family's Newark-based company at NutsOnline.com. (Braverman had picked up that address from Network Solutions in the late '90's--for approximately $70.) Nuts.com seemed the natural fit--and in fact was often mistaken for his company's website. Friends, acquaintances, and even Rachael Ray on her national television show, referred to the business incorrectly as Nuts.com.
"It was always weighing me down," says Braverman, who is now CEO of the company. "First, the name would definitely be easier to remember. It would also give more credibility. If you have a four-letter domain-name, you are definitely no fly-by-night operation."
Third, he says, he was scared. "What if a competitor would get it before I did?"
It took him months to track down the owner--who was in Guam--and make inquiries through online forums on which that owner had posted. Braverman also tried snail mail. Not only was the asking price high, but when the owner diverted existing traffic on the site to Braverman, so he could analyze it, Braverman found it was far from what he was looking for: mostly porn referrals from abroad. Not exactly the kind of health-food-seeking U.S.-based customer he was hoping to attract.
Negotiations stalled, and Braverman walked, but two years later, the owner listed Nuts.com for sale through a broker as part of a huge portfolio. The happy Braverman snagged it.
The price? A hefty $700,000. But Braverman says the name paid for itself, in traffic and purchase referrals, in less than a year. "I thought, even if it takes a decade to make back the price, it would be worth it," Braverman says.
All this fuss isn't just for vanity: The right URL can mean big business. Draper says upon adding ValleyGirl.com to her arsenal and transferring her site over to it, she saw a boost in organic search traffic.
What if it doesn't work out? If the owner never responds or the asking price is persistently too high?
Jordan Kretchmer got stuck when trying to purchase Livefire.com for his social-media content-marketing startup homepage. This was 2009, and country-code top-level domain names (.io, for Indian Ocean, and .ly, for Libya, in particular) were becoming popular. Several investors encouraged Kretchmer to forget the .com, and get one of these--known as a top-level domain, or TLD--instead. He decided to buck the trend and instead change the spelling of his dream startup name to Livefyre. Now he'd just have one little hurdle: Building a brand around a misspelling.
Five years later, he loves his company's name. "The good news is, that once you build equity in a unique name, it pays dividends in owning Google search results for both the incorrect and the correct spellings," he said in an email. "For example, Google suggests Livefyre.com in the search drop-down when you type 'live fire.'"
Universal Music Group's $800 million mistake
Sometimes, entrepreneurs have no choice but to pay big for their domain names of choice. In the case of Uber, which was originally known as Uber Cab, and whose online home was ubercab.com, two agencies in California--the San Francisco Municipal Transportation Agency and the California Public Utilities Commission--objected legally to the use of "cab" in the company's name. So it bought Uber.com from Universal Music Group for 2 percent of the company. According to Vanity Fair, the company later bought back the shares for a whopping $1 million.
Well, whopping then. Today that share would be worth $800 million, given Uber just closed a funding round that values the company at $40 billion.
It's enough to make the slightly more than 1 percent Aaron Patzer gave up for Mint.com seem slight. And it was, in a sense.
The previous owner of Mint.com, who ran a hedge fund, wanted $2 million to $3 million--or equity in the company.
"I could have been discouraged and thought 'let me choose a different name,'" Patzer says. "But 'mint' is where money is made, it was four letters, easy to spell, and is spelled unambiguously. It hit all the criteria."
Patzer was just starting out and couldn't meet the price. Negotiations stalemated. Then Patzer got his deal by ponying up equity--and allowing the URL owner to be the only New York City-area investor in Mint's next funding round.
Turns out bragging rights can be pretty valuable too. And Patzer didn't even have to pretend to be a woman.