Domain Development: an interactive discussion with Elliot Silver

I can’t say I’m a fan of either the Golden Globe or the Oscar awards.

But when domain investor and developer Elliot Silver won the 2010 TRAFFIC award in the Best Domain News blog category, I was right on the money with my vote.

Through his blog, Elliot churns out content daily that contains not just useful tidbits of information, but most importantly he shares his domain development endeavors with other domainers and developers.

For that matter, Elliot and I had an interactive discussion that’s split over two parts; his answers to my questions simultaneously appear at my blog, and my answers to his questions are featured at the latest blog post, at ElliotsBlog.com

I hope you will find the whole concept interesting and rewarding 😀

Elliot, who was your primary mentor with regards to moving away from domain parking and towards development as a viable domain monetization option?

David Castello was my primary mentor when I began to develop (parking was never one of my major revenue streams, as I primarily flipped names).  When I first purchased Lowell.com, I emailed David, and within minutes, he emailed me back and told me to call him. Since then (almost 3 years ago), he has given me some great advice about development, monetization, and advertising sales. David and Michael Castello always seem to be willing to share information with people to help them build their businesses, and their advice helped to encourage me to develop, and they were very supportive of my efforts. There are a number of great people who have also given me great development advice.

A lot of people use the cybersquatter tag a lot. Outside of the usual “domainer” circles, what is the approach and attitude of your peers (e.g. former colleagues, friends, family). Do they understand and accept the concept of development moreso that simple domaining?

When I first started buying and selling domain names, most of my friends were very surprised that someone could make money this way. I think a few of them were annoyed because it was something I always talked about.  A few busted my chops for buying and selling domain names, especially when I dabbled in adult names back when I started. It was pretty funny brainstorming some adult names with them.

Now that I’ve been doing it for a while, they realize how much work I do to research domain names and development opportunities, and they understand it’s a real business.  A couple of my friends have entrepreneurial aspirations and they look at my building websites as building individual (small) businesses. It’s fun to see some of my friends start businesses, especially those who make the Internet a big part of their startups, and it’s great to be able to help them with their new businesses.

I don’t think my friends really thought of it as cybersquatting, but some random people I meet mention cybersquatting when learning domain investing is what I do.

For practical purposes, how do you outline the plan for development of a particular domain name? E.g. charts, spreadsheets, taking notes, other tools. Do you feel more of a project manager than a developer?

I definitely feel more like a project manager than a developer, although with my limited coding knowledge I can fix small errors and make small changes (as you can attest). When I start a project, I generally have a good idea of what I want in terms of style and monetization.  I brainstorm with my main developer (Mike McAlister) to discuss the options for the project, and he provides his feedback.  He will build the website and we’ll consult along the way. I think I’ve gotten better at managing the development process (and managing my own expectations/requests) than when I started. I don’t take a lot of notes, aside from email lists of changes/requests I send during the build phase. Most of my requests are done on the fly, making changes and improvements as we progress.

Do you believe that in the future more domains will enter the secondary market as sites with developed content? Is it then perhaps better to take each developed site a step further and build a real online business, prior to pursuing a sale?

Good question. I do think the hold time for domain names has probably increased over the last year and a half (at least it has for me), and as a result, some people have decided to try their hand at development.  I don’t think it’s wise for most people to build something significant on a domain name that’s intended for resale for three reasons. First, if a potential domain buyer visits the site and sees a developed website, he might look elsewhere. Second, the effort and expense might not yield the return that’s needed to justify it. Third, if a person sells advertising and a buyer wants the name but not the site, the site might be encumbered if there’s no out clause in an advertising agreement.

Ultimately, I think a person should only look to developing a business if he or she intends to maintain that business. Domain investors should know there’s a lot more to making money with development than just putting up a website, and even a good looking/profitable website might not be of significant value to a domain buyer who may want the domain name for his own project or company to develop.

What percentage of your developed domains do you build in order to ultimately sell, versus maintain for revenue?

I don’t really build websites to sell them. For my business model, it doesn’t really make sense to sell a website with a steady revenue stream, and when I put a full effort into building a website, it’s not generally for a quick flip. Of course the purpose is to make money, so if someone has a compelling offer for one of my developed websites, I’d certainly consider it.