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I Got Fired

Antony Van Couvering

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.

  • Registry as a technical function, concerned with infrastructure and service levels; this is what ICANN would prefer, but it's a commodity function with little on-going value. Increasingly, this will be an outsourced service with lower and lower prices.
  • Registry as a domainer play: the registry is essentially an unlimited portfolio of names, and like a domainer you can price your inventory, park it, and wait for the right buyer to walk through the door. This model is concerned with understanding the value of each name and pricing it for maximum return. It also requires staying power and self-sufficiency; impatient investors are going to have a hard time with this model.
  • Registry as supermarket. Sell it super-cheap or give it away and try to win on large volumes with low margins. Because low prices disproportionately attract fraudsters, this approach is problematic but in the short term at least it seems to be profitable. In terms of resale, however, it may be a poisoned well.
  • Registry as small business. Make some nice signs, tell some friends, try to get good shelf space at the local store, take out some stands at trade shows, get some testimonials, keep the costs down, and build the business over time. This can work if there are no investors, or if they are angel investors looking for a nice ongoing income in the future. Having a single TLD instead of a portfolio is actually an advantage here.
  • Registry as part of a bigger plan. Naming is part of a vaster ecosystem that includes the branding, positioning, marketing, selling and licensing of companies, goods, and services on the Internet. And, importantly, it includes Internet governance. It takes no great power of observation to see that being a big registry, essential to commerce and communication on the Internet, contributing substantial amounts to ICANN, gets you a privileged seat at ICANN, at the center of things when it comes to deciding what the Internet will look like in 10 years. That's actually worth a lot, but it's only available, or useful, to the biggest players.

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 avc@avc.vc.

By Antony Van Couvering

Related topics: Top-Level Domains

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Welcome to the Club Keith Teare  –  Feb 22, 2016 8:45 AM PDT

I like this article-a lot.

Like Antony I too am an ex-MMX board member. Perhaps I am a little less diplomatic. The investors who have conspired (that is the right word) own over 50% of the public company.

They have forced stock buy-backs, fake share price support, inclusion of non-qualified board members, exits of highly experienced domain experts (Elliot and myself and now Antony).

Their actions are probably illegal under AIM rules about conspiracy of investors, which is deemed to be a back-door takeover.

And now they have hired a PR guy (I love you Toby but good as you are at investor relations you are no MMX CEO).

Its a disgrace that no journalist has dug into this....and that no lawyer or regulatory body has seen fit to expose these highly illegal maneuvers.

And all that aside, they are highly unlikely to be able to sell the asset or grow it.

This is activist investors in toy town playing at being in control, but with no knowledge of the market they seek to prosper in. It makes me ashamed to be British!

AVC you are a star Jodee Rich  –  Feb 22, 2016 12:46 PM PDT

1. Jobs was fired too. Congrats.

2. You have incredible vision and ability to execute

3. Agree the industry is in transition. Has to be.. It's smaller than the smallest Fortune 500 company… It supports three dominant players (ICANN, Verisign and GoDaddy).

All your friends wish you and Tina a wonderful break. Here to play with you again when you are ready.

Wishing you well Joe S Alagna  –  Feb 22, 2016 1:16 PM PDT

Hi Antony,

Wow - this is a surprise.  You are a visionary and come into great ideas very early.  You were one of the first people I spoke to at length when I came into this business 17 years ago. 

I felt that you made a great difference and wish you the best.


Unfortunately... Paul Walsh  –  Feb 22, 2016 1:35 PM PDT

The domain world appears to have a lot of snake oil merchants. I've got some good friends who are brilliant and ethical but I've also worked with some who are just snake oil merchants. It's a world I don't like much.

On a more specific note, I had to fight for board control during the round I'm about to close - we're way too early to even have an "even" board. Next time make sure you retain control - in whatever form that may look like.

Doors will open to you quickly... Jothan Frakes  –  Feb 22, 2016 4:31 PM PDT

Hi Antony-

Classy - even while raw from the nonsense you find professional words.  Why I have always liked you and felt blessed to have you as a friend.

Their loss, totally.  You have good vision, great wisdom, and one hell of a magnificent rolodex.  I learned that one door closes and others open with Minds + Machines, and I was grateful to help in founding it with you way back when we started.

All kinds of doors eventually opened to me after the 'forced alumnist' event round we had due to all the ICANN delays.  Amazing things are ahead and doors will open for you too. 

Enjoy your time in the interim and stay positive.


All the best for the next Chapter! Raymond King  –  Feb 22, 2016 5:14 PM PDT


You had a clear vision of what was to unfold in our industry long before others and I am personally grateful for your friendship and guidance throughout the process.  This article, is a great example of your ability to generously and calmly share your industry wisdom — despite the circumstances!

I have trouble understanding how this can be anything but a loss for M+M and the industry at large.  So please take a much deserved break and come back to us soon!

- Ray

Congratulations Andrew Franz  –  Feb 22, 2016 5:26 PM PDT


Your article shows clearly how in touch and creative you are - creativity cannot be replaced like a plug-in. Good luck to them!

- Andrew

On to the next.... Braden Pollock  –  Feb 22, 2016 6:43 PM PDT

You've been a thought-leader in this space for many years. That's not going to change. There are plenty of people that are now anxious to know about your next venture. Enjoy your break and I look forward to hearing about your new plans.

Boards and Managements John Welles  –  Feb 23, 2016 3:05 PM PDT

Managements serve at the pleasure of the board.  If a founder raises capital and later finds himself as a small minority shareholder working for a board which controls the company, he better learn to change direction if the board so orders.  A board's ultimate responsibility is to the shareholder.  This is clinical.
Best of luck to you, AVC.

John, you need more facts. There are always specifics Keith Teare  –  Feb 23, 2016 7:59 PM PDT

Actually in this case it was to a secret cabal of shareholders - meeting together in private - and with a board that disagreed with their goal of emptying the company's coffers to get rid of other shareholders - formerly the majority. A lot more going on here than you know my friend.

Antony -- I'm very sorry to hear Christopher Parente  –  Feb 24, 2016 1:20 PM PDT

Antony — I'm very sorry to hear it. And as already stated, impressed that immediately afterwards you not only share the experience, you provide analysis of where the gTLD industry is going.

Enjoy your break. Looking forward to hearing about your next adventure soon.

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