The Path from Scallop Kingpin to Selling 8-Figure Domains — Andrew Rosener | The Tim Ferriss Show
Added: Dec 22, 2023
Andrew Rosener begins the conversation by sharing his background, which includes studying management information systems in college and starting a software business in East Hampton. However, he quickly realized that this was not the path he wanted to pursue. He then received a call from a mentor figure named Peter Moehrke, who offered him a position in the seafood business. Rosener describes Peter as a unique individual with a different perspective on the world. He spent eight years in the seafood business, traveling the world and negotiating with various countries and people. He learned valuable lessons about business and life during this time.
Lessons from Charlie Tuna
Rosener shares that Peter Moehrke, also known as Charlie Tuna, had a significant impact on his life. He describes Peter as an old hippie with a unique lifestyle and perspective. Peter's approach to life was focused on freedom and he had no ambitions of scaling his business. Rosener learned from Peter the importance of adapting to people and meeting them where they are, rather than trying to bring them over to his own perspective. He also learned the value of being direct and not beating around the bush in business dealings. Peter's influence on Rosener extended beyond business and into his personal life.
Introduction to Jamón Ibérico
Rosener's interest in the domain industry began when he tasted jamón ibérico, a type of Spanish ham, while visiting Mallorca with his now-wife. He was impressed by the quality of the meat and decided to import it to the United States. However, he discovered that it was illegal to import at the time. Years later, he heard on NPR that the first legal import of jamón ibérico was about to take place. He contacted the importer and made a deal to transfer some valuable domain names in exchange for a ham from the first legal import. This experience led him to realize the potential of the domain industry and inspired him to start Media Options, a domain brokerage business.
Media Options and Tess Diaz
Rosener founded Media Options with his wife and began to build a domain brokerage business. He realized that there was a lack of matchmakers in the domain industry, and he saw an opportunity to connect domain owners with potential buyers. Tess Diaz, who worked for GoDaddy, played a pivotal role in Rosener's journey into the domain industry. She introduced him to the world of domain trading and monetization, which sparked his fascination with the industry. Tess eventually left GoDaddy to work for Rosener, and they continued to grow Media Options together.
The Domain Industry
Rosener provides an overview of the domain industry, explaining that it has a clear structure and texture. He describes the different types of domain investors, ranging from those who collect domains as a hobby to those who invest strategically using algorithms and data. He also mentions the role of forums and industry news outlets in the domain world. Additionally, he discusses the business model of parking domains with Google or Yahoo to earn revenue from type-in traffic. Rosener emphasizes the distinction between domain investors and domain squatters, highlighting the negative connotations associated with the latter.
Leasing Domain Names to Startups
The conversation then shifts to the strategy of leasing domain names to startups. Rosener explains that startups, in particular, should consider leasing the best possible .com domain name for their business with an optional path to buy later. He elaborates on the benefits of leasing, such as de-risking the process of acquiring a domain name, maintaining a strong brand presence, and lubricating the fundraising process for startups.
Rosener provides an example of a startup founder who approached him to buy a domain name but was hesitant to pay the full price. Instead, they negotiated a deal that included a combination of cash payments and equity in the company. This approach allowed Rosener to treat domain names as capital investments in startups, providing him with a unique position on the cap table and the ability to claw back the domain if the company fails.
Investing in Startups with Domain Names
Rosener discusses how he has invested in several startups by leveraging domain names as a form of capital. He emphasizes the potential for domain names to play a significant role in the early stages of digital commerce and the internet, especially as commercial real estate experiences distress while digital real estate booms. He believes that domain names are the digital places where businesses meet their customers and sees a correlation between the decline of brick-and-mortar locations and the rise of digital presence.
The Future of Domain Names
Rosener expresses his belief that the domain name industry is still in its early stages and that there is a significant opportunity for growth and innovation. He sees domain names as valuable digital assets and emphasizes the importance of owning the exact brand match .com for businesses. He also discusses the potential for domain names to play a crucial role in the future of digital commerce and branding.
The Impact of AI on the Internet
The conversation also delves into the potential impact of AI, particularly tools like ChatGPT and Bard, on the internet and domain names. Rosener acknowledges that these AI tools may affect the SEO game and the way people interact with the internet. However, he believes that domain names will remain crucial, especially as AI continues to evolve. He also discusses the potential for domain names to be used as crypto wallets, highlighting their versatility and relevance in the evolving digital landscape.
The Pursuit of Novelty and Contentment
Rosener shares his perspective on the pursuit of happiness, expressing a preference for contentment over happiness. He explains that he seeks novelty and uniqueness in his life, striving to stand out and pursue greatness. He believes that the purpose of individual lives is to pursue novelty, which involves doing things that others are afraid to do and reacting to the world in unconventional ways. He emphasizes the importance of embracing pain, suffering, and hard work, as these experiences often lead to meaningful achievements and personal growth.
Rosener's views on contentment and the pursuit of novelty are rooted in his belief that great art and success are often born out of darkness and adversity. He encourages individuals to lean into pain and discomfort, rather than avoiding or ignoring it, as this is often where true growth and innovation occur.
Valuing Domain Names
Rosener delves into the intricacies of valuing domain names, highlighting his unique approach to objectively determining their worth. He explains a mathematical valuation methodology based on the domain's ability to arbitrage the cost of customer acquisition. By considering factors such as search volume, conversion rate, and click-through rate, he demonstrates how a domain name can reduce the cost of customer acquisition for businesses. He also shares examples of how owning the right domain name can significantly impact a company's brand and customer journey.
Inception and Emotional Attachment to Domain Names
Rosener discusses the concept of "inception" in the domain name industry, where individuals experience a pivotal moment of realization about the value of a domain name. He shares a story about a client who initially resisted purchasing a domain name but later regretted it and attempted to buy it back at a significantly higher price. He emphasizes the emotional attachment and perceived value that individuals develop for domain names once they own them, leading to a reluctance to sell them at a later stage.
Jeff Bezos' Strategic Domain Acquisitions
The conversation touches on Jeff Bezos' strategic acquisitions of domain names and his foresight in understanding their impact on branding and customer behavior. Rosener highlights Bezos' purchase of domain names such as podcast.com, author.com, prime.com, and tube.com, showcasing his deep understanding of the role of domain names in shaping the customer journey and brand recognition.
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