It's a story told a thousand times: founder of a company ousted by investors. It's a story so common you can find it any day of the week as a minor headline in a tech blog. Not much of a story at all really, until it happened to me.
Minds + Machines, the company I founded in 2009, informed me last week that I was no longer wanted as CEO. Without going into details, which I can't, there were differences and disagreements. Still, it was a surprise. All the plans, the hopes — pfhhht! into thin air. It sucked.
Now what? New gTLDs are barely birthed. The industry is very young. Twelve million new gTLD names have been sold in just about two years. That's nearly 5% of all domain names out there. What reasonable person doesn't expect that to rise to 20% or more within the next few years? There's a lot of opportunity in the field.
And yet there are some signs of desperation out there. Demand for new gTLDs hasn't been what anyone expected. Many single-TLD registries, though not all, are hurting. Many registrars still do not fully support new gTLDs that aren't plain-vanilla .com clones. ICANN continues to treat registries and registrars as unpleasant necessities despite the fact that its sky-rocketing budget is underwritten by domain name sales. No breakout awareness of new gTLDs has yet occurred and until it does marketing new gTLDs may feel as useless as pushing a piece of string.
Even so, the larger players in our industry continue to be very bullish: .shop went for more than $40M, .app went for $25M and a secondary market in new gTLDs is heating up fast. Existing registries, and companies outside the space, are on the prowl. Despite the perceived lack of demand, some people are clearly seeing a lot of value in new gTLDs.
Why the disconnect? It's a matter of perspective, and cash. Owning a registry, or even better a portfolio of them, is a fantastic long-term business. Those who can't think long term (no cash) or won't (no vision), will not be well served by what's to come.
What kind of registries are out there, and how will they fare? Below I've listed some of the major types of commercial models (non-brand) that exist today, and what their prospects are; there are also hybrids of these models.
2016, I predict, will be filled with new gTLD acquisitions. Buyers of new gTLDs see bigger players coming to gobble them up down the road, paying a premium for size, diversity of portfolio, and market leadership. They think TLDs are still a bargain, even in the aftermarket, and they are out there trying to make deals. If a registry, of any size, is not a buyer, then pretty soon they will either be a seller or a small player.
Existing portfolio registries have basically two ways to go. One option is to build up the TLDs in the existing portfolio, treating them as a collection of small businesses, and hope that they become self-sustaining and will fetch a decent multiple of profits in an eventual sale. A better option would be to treat today's highly fragmented ownership of new gTLDs as an opportunity to continue the portfolio-building that began with the first applications, acquiring good TLDs that are selling cheap now, keeping focused on the long-term value.
Back to me getting fired. It still sucks, but I'm seeing some silver linings already. I'm going to take a break, re-connect with friends, and consider what's next. If you have condolences, thoughts, ideas, or just want to reach out, my new email address is email@example.com.
Related topics: Top-Level Domains
|Data Center||Policy & Regulation|
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|Internet Protocol||White Space|
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