Back in the good old days, domainer owners would buy a name, park it, and wait for the check. During the 2008-2010 recession, that model largely broke down. Since then, we have seen a period where liquid domainers bought inventory from the illiquid domainers. However, recently, domain traders are reporting that they are having a tougher time to move the inventory as they are selling to a shrinking universe of wholesale buyers who can choose from abundant supply. It is time for a new model.
Back in September 2008, very few people saw the storm coming. Tremendous wealth was destroyed in a very short period of time as the world endured the fallout of casualties (Lehman Brothers and Bear Stearns), nursed the too-big-too-fail (AIG, Goldman, JPM-Chase, Citi, etc.), and sustained the walking dead (Fannie Mae and Freddie Mac). And with trillions of dollars of conjured liquidity, the financial system was able to step back from the abyss. Or so it seemed.
Flash forward to Summer 2010. My personal view is that the Double Dip has arrived. Not coming. Arrived. Welcome to the recession that never really ended, otherwise known as Pain 2.0. And with that comes more uncertainty, more dog-eat-dog, and more pressure on household finances. This is the highly regrettable reality of the leading economic indicators. The ECRI’s leading indicators is flashing trouble: -10.3.% versus +10.8% a year ago. See the green line below.
The 30 year US mortgage rate dropped this week to an all-time low of 4.44% — assuming you and yours have the balance sheet strength with which to secure said “cheap money”. The notion of further debasement of the US dollar through the Fed’s Zero Internet Rate Policy (ZIRP) is nothing new. Printing currency to buy treasuries, also known as “Quantitative Easing”, is also nothing new. And Record US trade deficits are also nothing new and not going away. And the issue of structural unemployment is unsolved which means budget deficits as far as the eye can see.
However, as an internet entrepreneur, the true canary in the coalmine for me was Amazon’s latest earning report, which I blogged about here. They missed by a lot despite executing brilliantly in so many ways. Since then, the flurry of IPO filings (e.g. Demand Media … ), KKR’s cancelled offering, and Fortune 500 CEO “resignations”, all scream one thing: an “inflection point”. Add to that, Massive fires in Russia, epoch flooding in China, Fidel pontificating about the imminent risk of global conflict. What next? It doesn’t matter. The smart money is already heading for cover and for higher ground.
What to do? Bootstrap Baby
A double dip, should it indeed happen, does not mean that commerce stops. It means negative growth which in turn means that there is a tougher battle for a smaller pie. This favors two types of people: (1) the deep-pocketed folks who can ride out the downturn, and (2) scrappy, nimble, adaptable people that can out-compete and/or out-innovate more bloated players. Said another way, even an extended period of US/EU deindustrialization does not mean there are no opportunities to create value.
So, welcome to the era of “You, Inc.” If that concept sounds scary, perhaps the alternative of being singularly dependent on the generosity and well-being of your employer will cause you to reconsider. The truth is that becoming financially independent is not really all that hard and is often less stressful than wondering if your job will be there in 3 months. Becoming financially independent won’t happen overnight, but anybody with discipline and self-awareness can do it.
Recently, Epik partnered with domainer Oliver Hoger to build a portfolio of mostly product portals. Oliver is quite possibly the next Kenny Hartog. And by that, I mean an Epik developer whose Epik portfolio alone is a basis for financial independence. Kenny and Oliver both work from their home offices, as do I. They don’t have secretaries. Nor do I. With low overhead, your new startup is almost instantly profitable. Overhead is overrated!
A portfolio of Epik-powered sites, features low setup costs, and essentially no operating costs. Acquire and Develop new properties when you have funds. Optimize and Sell existing properties when you don’t. You can do it. Get started here. Or come to the Epik Developer Conference in September and the growing community of successful domain developers will teach you what you need to know and help you on your way.