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Paul Stahura’s time machine – 1995 domain rush all over again [interview]

I wish I could go back to 1995, and register domains. We’ve all said this line at least once in our life. I wish I could go back to that magical 1995… But think about, you would have to pay at least 1000$ for renewals because back then price for .com was as high as 100$. What’s my excuse for not buying domains back then? I was a kid in Croatia and my parents didn’t have any money. Especially not 100$ for some “moniker” on some “Internet”. Heck, they just bought the damn thing – Internet (computer with Internet access)!

But what if I told you it’s not too late? What if I told you 1995 is today? There, I said it. I dropped the bomb. Some of you probably hit the close button on the article.

Did you ever hear anyone say all the best houses are already taken? Or to use one of Paul’s analogies, are all the major cities are already built? Paul Stahura was a guy with a vision back in 1995. I read an article a while back, how you can make money by digging gold, or by selling shovels and picks to gold diggers. In this regard, our gold diggers would be: Rick Schwartz, Frank Schilling, Mike Mann and Rob Grant all domain investors made millionaires. Today, I am giving you an angle from a guy who made a fortune by selling shovels, domain shovels that is. He did it in 1997, and don’t tell anyone, but… Pssssst, he is doing it again.

 

Paul Stahura
Paul Stahura

Paul Stahura founded domain name registrar eNom in his garage (I am beginning to think we need more garages) with little capital and during a time when the industry was dominated by a single combined registrar and registry. He took the company from $0 in sales to more than $80 million in total revenue in less than 10 years, and from no domain names under management to the second largest domain name registrar in the world. The company now generates more than $100 million in highly profitable revenue.

Paul sold eNom to Demand Media in 2006, now publicly-traded company was formally organized and closed its first round of $150 million in financing. He is also the founder of NameJet, a leading domain name auction platform, has been a member of the board of directors of AboutUs.org since that company’s founding, and is an investor in and board member for several Seattle-area technology startups. Although a one of a kind business man, he is also an inventor and holds 4 patents (3 in the domain name system space).

Method for domain name registration and a corresponding apparatus

Method and system for mapping a domain name with no associated address to an address

Method and system for providing static addresses for Internet connected devices even if the underlying address is dynamic

So what is Paul up to now? Here’s a nice article that covered it nicely – (This Seattle area startup just raised more than $100M in a huge series A financing) but what exactly is his time machine which I mention in the title? His company – Donuts has applied for over 300 new gTLD’s. I already wrote about gTLD – Dawn of a new era where i mentioned it takes roughly a quarter of a million dollars for 1 TLD. So naturally, Donuts have the support from multi-billion dollar private equity and venture capital funds.

You can find all of them here – Donuts complete list of TLD applications. Some of my favorites are: .app, .blog, .book, .cloud, .dog, .domains, .film, .free, .games, .gmbh, .gold, .inc, .shop, .sucks, .vip, .web, and .zone. Everyone special in its own way, different flavor, like a donut.

WhoAPI:
What was the first domain name you registered?
Paul Stahura:
Me personally: servotogo.com in about 1995 – it was for a company I started and “servo.com” was already taken. When I started eNom, in 1997 “ename.com” was already taken, so I picked “eNom” instead. I had no money to buy a great name like “name.com” in the aftermarket. At eNom: competitionworks.com. We registered this name as our first name since we appreciated the benefits that competition at the registrar level would bring to consumers. Subsequently, eNom, in competition with a number of other registrars, brought retail prices down from $70/name/2-year registration (I’m not joking – that is what NSI was charging when they had a monopoly before competition came) to $7/name/year.

WhoAPI:
What was the biggest domain sale you made?
Paul Stahura:
clear.com. Due to confidentiality, I can’t say what I sold it for, but a partner and I bought it for $6K out of bankruptcy. It was the best investment, return-wise, by far, I ever made including my investment in eNom.

WhoAPI:
How big is your portfolio?
Paul Stahura:
Not very big – about 50 names, and many are in TLDs other than .com. I was selling names back in the day, instead of buying them.

WhoAPI:
What is the oldest domain you currently own?
Paul Stahura:
I don’t know. What I did know back in the day, and am even more certain of now (even with Facebook, hashtags, apps, etc.), is that domain names will not go away in our lifetime. It’s one of the very few worldwide standards. Even electricity delivery (plugs, voltage, etc.) is not a worldwide standard. The non-proprietary DNS standard is just as entrenched as the 110V 60Hz electricity standard is (in the US), and that standard has been around for 100+ years! That permanence and openness is what drew me to the domain name space, though I didn’t start buying names (and holding them, not immediately selling them) until about 2004 (It was after my first TRAFFIC meeting in Florida when I first met Frank Schilling in person).

WhoAPI:
What excites you most in domaining? Now that you’re on top, where do you find the motivation to keep competing?

Donuts - a new generic top level domain company
Donuts – a new generic top-level domain company

Paul Stahura:
I wouldn’t classify myself as a domainer, though it’s an honor to be nominated as “Domainer of the Year” this year (Strangely, the same year I was also honored to be named one of the top 50 most influential people in Intellectual Property. I likewise do not classify myself as an IP guy either.) I own names for various purposes, like business ideas or names related to my family. My new company, Donuts Inc., is an applicant for 307 new TLDs and my motivation today comes from working to make that a success. I am motivated by finally, after 15 years, opening up the registry level to real competition. New gTLDs open to anyone to register their chosen name that is real competition. I was motivated by that 15 years ago, and still am today. New TLDs will give newcomers, the public, brands, anyone a renewed opportunity to get great names. Intuitive, memorable, meaningful names. That’s another thing that excites me.

WhoAPI:
How does your typical day look, and what are you currently working on? What does day to day at Donuts look like?

Paul Stahura:
There’s not much typical about day-to-day at Donuts. We’re a small team, eight people total for now. Most of my effort last year (when it was just four of us) was focused on fundraising and string selection. Now it’s more fundraising and what you’d expect: keeping up with what’s happening with the approval process, board-related issues, charting out the next moves for the company, etc. Basically getting ready to launch our TLDs next year – and by the way, we’ll be introducing new innovative stuff, so we are working on those too, in preparation. We have a lot going on every day.

enom domain registrar logo
enom domain registrar logo

WhoAPI:
Why did you sell eNom, and why to Demand media? Once the company sold, did you “vest in peace”, or everything stayed the same? I learned the term “vest in peace” in Tony Hsieh’s book “Delivering Happiness” where he sold his
 company, and then had to stay there although he almost died out of boredom. 😀

Paul Stahura:
I sold it because at first I was looking to raise capital to invest in the business, then decided to sell the entire thing because I thought the Demand Media buyers could do more with it than I could. So I sold the company in 2006 and took some money off the table. Immediately after the sale I became President and COO, then was Chief Strategy Officer at Demand Media, and I was a board member until I left in 2009. All my shares were vested the day I sold it. In hindsight, it was a good decision to sell it then. I stuck around to make a good transition for the business (I was, after all, a major shareholder of Demand Media) and I enjoyed the work very much. We (the eNom folks) transitioned from a tech-centric infrastructure-type domain name registrar to being an important part of a pre-IPO media company. I left after three years because I really was not contributing much anymore and needed a break. While I sold a number of shares over time just to diversify and so I could make other investments such as Donuts, I still own a significant number of shares, and still believe in the Demand Media vision (and as demonstrated by their great recent results).

WhoAPI:
Where do you see the industry going? What does your crystal ball tell you?

Paul Stahura - photo by Joi Ito
Paul Stahura – photo by Joi Ito

Paul Stahura:
ICANN’s new gTLD program is the most significant expansion of namespace in the history of the Internet. The answer is not so much about where the industry is going, but where users are going to take the Internet itself. We have millions of users, some of whom even today aren’t active Internet users, ready to use web technology in their native languages and character sets, thanks to internationalized domain names. That’s significant but even bigger than that is the opportunity for new and specific identities online through the gTLD expansion. We’re looking at the potential for about 1,500 new TLDs—some will be brand-related or geographic, but many of them will be open for registration and will give much more intuitive options for providing products and services over the Internet. There will be new uses for domain names, too – imagine saying a domain name into your phone (iPhone, Android, Windows, whatever), but instead of a browser starting up and going to a website when you say “ebay.com”, the “Pandora.app” starts or the cell phone calls ”stahura.phone”. My crystal ball had been hazy on WHEN gTLDs will happen, but not THAT they will happen, the same crystal ball tells me this will be an exciting couple of years.

WhoAPI:
What is your favorite new gTLD? What’s your opinion on hundreds of new gTLDs that are lining up?

Paul Stahura:
I never saw a gTLD I didn’t like—a lot! So my favorite is all of them. Or said another way, my favorite TLDs is any new TLD – since each new TLD is an opportunity that hasn’t existed before. Frank Schilling, as he said in one of his blog posts after the TLD reveal, regrets not going “longer”, meaning applying for a larger number of TLDs (he applied for 54). I think many have the same regrets – I know I do. All new gTLDs won’t succeed and all won’t fail. It will be like registrars. Some will be big and others will be small with each in a different niche. The few that fail will be acquired by the others that succeed – without any issues for any registrants. Hundreds lining up is good because consumers will get variety and choice. Donuts is applying for more than 300 itself, including “.fail”

WhoAPI:
Are you doing something to clear the name of domainers that are doing a great job instead of squatting and spamming?

Paul Stahura:
Domainers (who are legitimate domain name speculators) are not squatters (defined as trademark rights infringers) or spammers (defined as folks who send unsolicited emails). I think anyone who has been in the industry for any length of time knows that. We all have to do what we can to operate cleanly and discourage and even punish bad guys, but just like any other endeavor, a couple of bad actors can affect the reputations of others, even if the others are doing all the right things. The opponents of domaining use those few bad actors to tar the reputations of all legitimate domainers These opponents purposely confuse “squatting” and “domaining” when speaking to people who are outside of the domain name business and do not know any better, such as some congressman, for example. Others understand the difference. In my dealings with policymakers, I try to explain the truth – domain name registrars, registries, and speculative operations are all legitimate businesses, but infringing the rights of others is not and has no place in our industry. And anyway the money is, and always has been, in generic words not in trademark squatting. Only idiots squat. You can’t get a trademark on the word “water” for bottled water – its just not allowed by the USPTO – but you can get the generic domain name “water” and use it for bottled water.

That’s huge.

WhoAPI:
Great answer and I am really glad you said that! Now for the final and perhaps toughest question. There’s a lot of people talking about how .com will remain the king, so what do you say to those people – what’s your USP?

Paul Stahura:
.COM will likely always be “king” if you measure it by registrations. It was first, or nearly the first, TLD. Just as New York City will probably always be the biggest US city since it was the first, or nearly so. That certainly doesn’t mean cities that come along later won’t be significant or grow quickly. Think of Chicago, Los Angeles or Las Vegas, even thousands of small towns. Just like new gTLDs, these newer cities and towns each have something different to offer from NYC and from each other.

 

Written by Goran Duskic

I am the founder and CEO at WhoAPI. Entrepreneur for more than a decade in the hosting and domain industry. Sold my previous company. 500 Startups and StartLabs alumni. Author of a white paper "Domain Disclosure: Dirty Dozen" and eBook "26 Fundraising Questions for Startups".

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