Brad Mugford is a domain investor who runs DataCube.com. DataCube.com is the 68th oldest domain name ever registered.
I interviewed Brad back in 2012, and now 8 years later Brad was kind enough to do another interview. How has his portfolio changed? How has his approach changed in an ever more crowded space?
1) It was 8 years ago that you and I last did a quick chat, Has your approach to domaining changed and if so how?
Time flies. It sure doesn’t seem like 8 years ago.
I am still buying and selling domain names to end users.
The major thing I have changed is buying fewer, higher quality domains in recent years.
The main reason is that reseller prices on popular auction venues often don’t make sense from an investment perspective when you factor in sell-through rate.
Decent quality .COM that might have sold for Mid $XX – Low $XXX in 2012 are usually selling for mid $XXX+ at auction venues today.
When you already have a relatively large portfolio, it is hard to justify that higher acquisition cost for similar quality domains.
2) What areas look good to you for fresh investment in 2020?
I think what looks good now is what looked good in the past. The best investment IMO are quality (2) Word .COM with end user potential.
As long as domains have value, it is likely quality .COM are going to lead the way.
One thing to realize is the vast majority of end users are not buying single word .COM. These are generally out of the budget of most domain investors and end users.
Quality (2) Word .COM sell consistently in the $1K – $10K price range to end users.
3) Any niches .com that you think are over hyped and over valued?
I would personally say “future trend” domains. This includes fields like 3D, IOT, Virtual Reality, AR, Drone, Holo, Marijuana, Crypto, etc.
While there are some exceptions, the vast majority of high quality registrations in a niche are long gone by the time domainers get to it.
I consider this kind of a new investor trap. If you look at the registration showcase threads on NamePros it shows why it is better being the registrar.
If people want to invest in these type of fields they should go after great terms or combinations, not just settle for whatever was available to hand register.
4) Have you delved into any of the country codes that have been hot since last we spoke, like .ai, .co or .io?
The only ccTLD I really invest in is .US. I own a portfolio of around 800-1000 mostly top quality keywords, brands, and GEO.
I just see the extension as undervalued in general. My inquiries and sales are solid.
I have sold terms like Tech, Cloud, and others for serious prices.
As far as secondary extensions go in general, I would only be willing to invest in the top tier terms. Basically the lower quality the extension, the higher quality the term needs to be.
5) Did you ever register any new gtld names?
Nope. It is just not a field I am that interested in for a number of reasons.
1.) The vast majority of high quality combinations are not usually available (for a reasonable price). They are usually either owned by the registry with premium prices attached or other domain investors.
2.) Many of the nGTLD come with high renewal fees. I have zero interest in investing in an extension that has either variable renewal or premium renewal fees.
3.) I don’t see that much end user demand. There are sales here and there, but I don’t think it is enough to really sustain the acquisition and holding costs.
I think a lot of the new registry operators missed their window of opportunity to get real consumer traction due to excessive greed and other shady behavior. The new extensions are really no longer new and fresh at this point.
With that said, I would still be interested in top tier combinations with reasonable prices attached.
Some examples would be ones like Real.Estate, Wedding.Photography, Life.Insurance, etc.
I would only be interested in a popular term, separated by a dot.
6) Someone with no knowledge of domain names thinking about getting involved. Do you talk them into it or out of it?
(My view point on this comes from a passive sale perspective. If you proactively pitch domains this might not apply.)
At this point it would be tough without sufficient starting capital. There is more competition now than ever for quality domains.
If you are entering this field, I think the most important thing is to have realistic expectations and be willing to learn.
It seems like a lot of new investors enter the field with wildly unrealistic expectations. If it was easy to make money, everyone would be doing it. It can take many years to even sell top tier domains for end user prices.
In my view the end user demand for domains has been relatively stable, but reseller prices on popular venues have really climbed in recent years.
With a standard 1% – 2% sell-through rate you need large margins on the domains that do sell, to cover all those that don’t in a given year.
If you enter the field realizing that you don’t know much and are willing to read and learn, then you have a chance.
7) Any recent sales you can share?
Sure. I would rather not share specific prices, but (5) of these sold in a $X,XXX price range and the other sold in a $XX,XXX price range.
Thank you for your time Brad and continued success to you