About a year ago things were quite different and domainers were encouraged to invest by ever rising prices on both short domains and generics and recent buyouts (such as LLLL.com and premium letter LLLL.net’s) which proven to be quite worthwhile. Minimum prices for LLLL.com’s reached $65 during peak times and there was a healthy supply of buyers. So back in those times it made sense to buy lots of NNNNN.com’s as well and hold them because prices would rise eventually. Which is what many domainers did buying up to 1k of them each. I had 875 of them at a total cost of around $6k – several other investors purchased more than 1000 of them and now realize the mistake and decide not to renew most.
Now, when the renewals came I decided to drop almost all of them, only leaving a few. I expect thousands of them to be available for registrations within the next month. The ones that represent a zip code, or have certain meaning would still be valuable, but the rest are going to wait for the next buyout phase.
Now for those who saw my posts a year ago know that I was investing in those digit domains heavily and even encouraged others, predicting that prices would rise. And I did believe that at that time, now of course I see this was wrong and it’s time to cut the losses.
Some people reading this would probably think “ha, what a dumbass, lost $6k on useless domains and he still calls himself Domain Magnate”, but I’ve long since adopted a different business approach, one that has always proven most valuable in the long term.
Failures and losses are a part of life, business especially. Only one who does nothing can never fail. Moreover, while success has its challenges too, failure is more important to growth since all failures occur to teach us valuable lessons and if we take the time to analyze them and ponder on the causes and consequences the empirical growth will be well worth the material loss.
And so a word of advice to all those who took a loss on their domain investments over the past months – use this as an opportunity to reassess your strategies and plans and make sure not to repeat the same mistakes twice. Now when prices are down again and many top quality domain names are available for purchase it’s a buyers market and a great time to invest. But as the financial crisis continues this situation is likely to continue for a while, so no rush – review hundreds of domains and buy a few.
This and other similar experiences, like the falling prices for LLLL.com’s which I’ve also invested in significantly, caused me to reevaluate my business plans and concentrate more on increasing the revenue from sites and other online properties to increase the cash flow. Most investments and projects I’ve been involved in over the past year and a half have been quite profitable and easily covered the other losses, but it is the failures that help correct the course and aim bigger.
Developing sites for affiliate and adsense revenues used to be my main business, though substituted by domaining for a while. It also showed the importance of more conservative investment strategies and long term planning. And to finish this a famous quote:
“Only those who dare to fail greatly can ever achieve greatly.”
— Robert F. Kennedy