Why I’ve spent $250,000+ on domain names

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Having a memorable domain name is like showing up to a party dressed to impress: it immediately sets you apart.

One of the most frequent comments I get when discussing the business of Examine.com goes along the lines of: “Wow, I wonder how you got that domain?”

No secret to it – Examine.com cost me $41,000.

And that’s just one domain. Others include:

  • $25,000 on SJO.com
  • $15,000 on PET.ORG (my next project)
  • $8000 on PetScience.com (my original domain for my next project until PET.ORG became available)

Why have I spent so much on domains? It gave me a leg up on everyone else.

Along the way, I’ve bought a myriad of domains – beat.com, webmaster.org, webhostingforum.com, MXO.com (Matrix Online), FFXI.com (Final Fantasy XI), diablo2.com (yup), and many many more.

Some I built up. Some I sold. Some I even forgot I owned (e.g., I bought ArticleManagement.com for a few thousand dollars in the early 2000s, and I think I accidentally let it expire).

And that’s just the .com domains. I’ve purchased a vast amount of ccTLDs, mostly when I felt the desire to move to a country (young Sol was an impulsive man).

(Admittedly, old Sol is still impulsive)

Domains are like real estate…

A domain name is akin to real estate – you have prime locations (e.g. food.com), you have solid ones (e.g. an examine.com), and then you have the rest (e.g. whatwhocaresabouthis.com).

(There’s an entirely separate discussion on buying domains based on someone’s trademark/established brand, but we’ll leave that alone here).

On a basic level, you can treat domain names akin to real estate

Real estate versus domains

What sets domain names apart from real estate is that you have no property tax. Provided you pay the renewal fee every year (roughly $10/year), you’re good. There’s no appraisal and no adjusted property tax – you’re locked in at $10/year.

It is possible to take a worthless domain on its own (e.g. google.com) and have what you build on it worth billions. There’s a real life analogy to it – you can buy property in the middle of nowhere, build something amazing on it (e.g. a theme park), and suddenly the land is valuable.

But to use our theme park analogy, would the land it’s on still be worth anything if the theme park completely disappeared?

Nope.

So it’s important to remember to disassociate the value of a domain versus the value of the business built on it.

I could buy premium property in Manhattan, start up a business that miserably fails, and then still find it easy to sell my property. That’s exactly what a domain is.

Unlike real estate, a domain name has no property tax; just a simple $10/year renewal fee

“Just like the word.”

Phonetics matters. Euphony matters.

There is cachet in names. Just like we immediately associate “LV” with high quality/expensive, many people associate a single word domain (that is easy to remember) as high value.

There is power in names.

When I first started Examine.com and would tell people that it was “examine.com” I would often get asked how to spell it.

“Just like the word.”

Invariably, the next question would be “that must have cost a lot.”

A fair amount yes, but not too bad.

The same thing has happened with SJO.com. People think it must have been incredibly expensive.

And the few people I have mentioned PET.ORG to, I get the same result. “Woah that’s a nice domain – how’d you get that?”

Pro tip: Any domain you are about to acquire, say it out loud. And then think of various ways you could spell it. The more possibilities, the harder it is to remember.

There’s a reason why Noah Kagan spent $1,500,000 purchasing Sumo.com – having a one-word four-letter word immediately sets him apart.

It’s funny – if you read the article, he mentions that a competitor for Mint.com was Wesabe. If you actually go to Wesabe.com it redirects to Due.com – now that’s a nice domain name. Not to mention, the founder even admits that the name was a factor (#3).

An easy to remember domain name makes your brand easier to remember (and also helps you stand out). There is prestige and implicit value associated with an easy-to-remember domain name.

The domain is a part of the whole, not the whole.

What people often mess up when it comes to domain names is that the cost of the domain is a part of the whole, not the whole itself.

If you have a $100,000 budget to develop a website, don’t blow $80,000 on the domain!

I’ve seen countless people get too excited, get emotionally invested in acquiring a domain, blow most of their budget on a domain, and then… whoops. No flexibility.

You should aim to acquire a solid domain name, but don’t blow your budget on it.

The secret power of domains: liquidity

The reason I don’t overthink when buying a generic domain name for my projects is that a good domain name is pretty liquid.

No matter what happens, I can sell the domain rather quickly. Maybe not for the full amount I paid, but the domain has a baseline value, no matter what happens.

If some calamity hits and I need to sell SJO.com, I should be able to sell it for $20,000 within 24 hours. PET.ORG may fetch $10,000. PetScience (which I bought for $8000) may only get a few thousand.

Hell even Examine.com – even though I bought it for $41,000, that was over six years ago. I would not be surprised if the baseline for it is $40,000-$50,000 now.

The reality is that the more premium the domain, the easier it is to sell it (and the higher the relative floor). It is not a sunk cost.

How I acquired Examine.com

The idea behind examine.com was conceived while I was vacationing with some (post-doc) friends in Colombia. As I was whining about supplement companies misrepresenting scientific research, they collectively sighed and told me to stop whining and do something about it.

You know, just do something.

After recruiting Kurtis as my co-founder, I put out the call to a few of my domain name buddies that I was looking to invest ~$25,000 on a domain name.

An important side note: domains are only worth what someone is willing to pay for it. A lot of people became way too emotionally attached to their domain name and highly overvalue them. Going to a trusted domain broker will help save you a ton of time from having to sift through a ton of garbage.

Towards the end, I had four options:

  • Configure.com
  • Diagnose.com
  • Examine.com
  • Supplement.com

Diagnose.com was immediately KOed as it was too medical-ish for me.

Supplement.com went next. I’m generally not a fan of single domain names when the plural is far more prevalent (and yes yes I know I have PET.ORG now).

It eventually came down to Configure.com (configure your optimal supplements/health) or Examine.com (Examine the research behind your optimal supplements/health). Eventually, I also nixed configure.com because I have a technical/engineering background, and configure has a particular meaning to me.

Examine.com was a bit above my original budget, but I made the stretch for it; I had the available finances to do it, and at worst case, even if the project failed, it was generic enough that I could use it for some other project.

It’s easy ex post facto to see Examine.com as a great domain name (and great fit), but I had originally gone after another name: Broscience.com

Thankfully (for me), the owner wanted a ridiculous amount, and I knew it was not a domain that would be easy to liquidate.

And that’s how I acquired Examine.com

Pro tip: You don’t have to pay a lump sum for a domain name. If you’re buying a high-quality domain, you can negotiate payment terms (similar to a mortgage).

Examine.com was not my first choice. Thankfully it worked out.

Domain names and your business

Domain names:

  • Are similar to real estate
  • Are super cheap to own
  • Can be expensive to acquire
  • Can be liquidated quickly
  • The more expensive, the higher the floor on how much you can liquidate for
  • A memorable domain helps build your brand and brings a level of credibility and prestige (especially useful when starting out)
  • Should only be purchased with a subset of the money you have available, not a majority

And there you go. A simple article on how to approach domain names.

I have a few more domain name stories to share...

I've built multiple businesses that kick ass and take names in completely unrelated fields.

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