Democratizing Dropcatch – Why we give away valuable domains for FREE

While attending DomainFest, I received several unsolicited comments about Epik’s policy of giving away valuable domain names — words like “brilliant”, “clever”, “disruptive”, “game-changing”.  However, it was clear from the tone, that these comments were not always expressed with joy, notably by companies who are in the business of auctioning off names to the highest bidder.  So, what exactly are we trying to accomplish here?

Traditional Dropcatch
When Ray King and Ron Wiener co-founded Snapnames in 2000, they invented the category of “catch and auction”.  Even today, long after Halvarez, the company still has a great business.  It has relatively high fixed costs, but also insane gross margins.  The historical challenge for this model is to get lots of bidders to participate in the auctions. This is where the business model gets more complicated. The more bidders, the higher the price.  The more successful Snapnames, Pool and others become at promoting their services, the higher the price, and the further out of reach domains become for bootstrapping domain investors who are confined to 2 and 3 figure bids due to economic realities. In a weakening economy, and with a shrinking pool of major wholesale domain buyers, there is an obvious tension that I don’t see getting resolved anytime soon.

Democratizing Dropcatch
Epik’s dropcatch model is quite different.  We catch to develop. And we develop a lot — about 300 custom sites per week.   But did you know that every week, we give away domains for FREE to people who are developing on Epik? The logic of this approach is simple.  Our cost basis is reg-fee.  We want to build a community of developers who share our passion for building useful websites that make money for their owners.  The community of Epik developers keeps growing every day, in part because of our philosophy of leaving money on the table for the next guy.  By giving away a high quality domain for free, there is a high probability that the developer’s downside is fully protected by the resale value of the developed domain.  That’s it. Simple.

Some recent catches
Every day, Epik catches between 10 and 50 names. The average catch rate is on the order of 80%, through a network of direct registry connections.  We catch names that we want to develop, or that we think someone that we know will want to develop.  We don’t park. Period.   Here are some recent catches:

This is typical of what we catch on the drop.  We have now been catching regularly for nearly a year with increasing efficiency.  If you are looking to build a portfolio of developed, income-producing websites, we have an ample quantity of raw land with which to do it.   You can also screen for dropping names using our free service at domains.epik.com.  The bottom line is the same — if you develop on Epik, the domain is FREE.