The pecking order of domain investing – “No holds barred”

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It dawned on me tonight that I haven’t come across a good reference for the evolution of a domain investor.

With that said, tonight I am writing about the pecking order of domain investing. It will be very easy to follow along and it may help inspire someone to get more creative, so they can speed up the process.

Domain Investors

Let’s start off with a reality check. An end-user for a domain is also a domain investor. They acquired a domain from a registrar or reseller and then invested more capital into it for development and marketing (Sometimes, to make a profit). Just because someone buys a domain from you, it doesn’t mean they aren’t investing into it like you did to make a profit later. It’s still an investment for everyone involved.

Now that we got that out of the way, let’s see if we can shake things up.

  • The Beginner (Also referred to as a newbie): The learning curves and millions of different directions they can go this early in their adventure is very overwhelming. It’s hard to decide which niche domains to invest into. To make it more stressful on them, they then have to learn how to sell them and get them in front of the right eyeballs. Lots of mistakes will be made at this stage of their adventure.
  • The Coat Tail (Also referred to as a follower): With all the overwhelming information out there it’s common at this stage of the adventure for a new investor to select a few veterans to coat tail/follow and mimic. Generally, what works for one may not work for another, so coat tailing can lead to a lot of bad investment moves for them.
  • The Novice (Also referred to as a green investor): With a few coat tailing mistakes out of the way, the investor now has a better understanding of good and bad investments and begins to research more due to the motivation and desire of not wanting to lose any more money in bad investments. At this stage, the investor also starts to become receptive to isolated niches to help them focus better on their investments.
  • The Guru (Also referred to as the “Fake it till you make it” stage): At this stage of investing, the novice has finished soaking in a lot of data and knowledge. They are feeling like an iron eagle making more consistent sales/profits/developments. Along with their boost of pride in the accomplishments they made, they also develop a small ego that can sometimes backfire on them as they try to provide advice to other investors.
  • The Enigma (Also referred to as “Lucky”): With a little humbling from the guru phase, this investor has started to mix techniques, test theories, and apply slightly modified investment strategies to their arsenal. They will make a few random larger sales spread out a few months from one another (Between the smaller consistent ones) or have development projects that become popular and generate revenue. Some investors may not fully wrap their head around this investors new strategy and start to question the validity of resale amounts or development project revenue. The word “Luck” will be used often when someone is discussing the larger sales or revenues they generated.
  • The Seasoned (Also referred to as a “Consultant”): This investor now knows enough about the industry that they can provide valuable input and advice to others in an effort to give back to the industry what they learned over the years (With their own spin). Flipping and developing domains are on this investors radar. Their portfolio (Large or small) is no longer in the red and there’s plenty of consistent profits after renewals, hosting, and other fee’s that are incurred in this industry to pay some of their living expenses more frequently.
  • The Veteran (Also referred to as an “Expert”): At this phase, the investor is well versed in the industry, has a firm grasp on appraising their own domains, has multiple effective strategies in their arsenal, public relations experience, and solid reputation in the industry. While this status may seem attractive to some, it’s actually a roller coaster ride of investment opportunities. There are lots of ups and downs, as well as time drains that can easily get them side-tracked often. It’s not all smiles and camera poses for veterans as some may think. Behind the camera, they sometimes go through major life struggles, just like everyone else.
  • The Tycoon (Also referred to as a “Whale”): As a serial entrepreneur and domain investor, the tycoon has successfully achieved balance in the domain industry along with business development and team management skills. They are able to cover all their living expenses, hobbies, and other guilty pleasures at this stage. A tycoon works smarter, not harder and utilizes coops, partnerships, and crowd sourcing to achieve their new goals. It’s not all fun in the sun though. Most tycoons are subject to social scrutiny, paparazzi type publicity, and inundated 24/7 with help/advice requests. The stress level of a Tycoon is actually much higher at times than some people would imagine.
  • The Retiree (Also referred to as an iconic pioneer): This investor has hung up their hat and only deal with some of the less stressful online business ventures that succeeded. They slowly drop out of the limelight and duck into the shadows to watch at a distance. With peace of mind and relaxation on the menu every day, they find happiness in some of the more simple things life has to offer.

The above evolution of a domain investor is not comprehensive and there may be other sub-stages/phases that I left out. It’s my hopes that it at least gives a general idea of the journey some people have ahead of them in this industry.

Questions to ask yourself:

  • Which type of investor are you right now?
  • How are you going to achieve the next level?
  • Did you do at least 1 hour of research today?
  • Did you write down your new strategy yet?
  • Are you testing new markets?
  • Where do you want to be in the next 3 months?
  • What are you going to do, right this second, to achieve that?

Learning can be fun, it doesn’t have to be brain numbing. Sometimes you just have to clear your mind and let the happier thoughts poor in so you can focus better on accomplishing a new set of goals. Negative thoughts/vibes tend to slow you down and makes it harder for you to achieve greatness.

Stay positive my friends, no matter what challenges you face today.

Happy business building everyone.


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Eric Lyon

Entrepreneur, Freelancer, Domain Investor/Developer, Brand Designer, Brand Manager, Founder of Scorpion Agency™, Founder of OfficeDrift™, And A Father. Since 1996, Eric has managed companies with 240+ employees, online communities with over 1 million members, attended numerous industry related events/conventions and has personally worked with start-ups, personalities, small mom and pop businesses, corporations, freelancers, news outlets, and a variety of domain investors one-on-one from all over the world. That equates to a lot of years behind the scenes with his fingers firmly on the pulse of multiple industries. LinkedIn: Profile/Resume - FaceBook: Profile/Social