Saturday Musings - Integrity

Saturday Musings - Integrity

For the past week and a bit I’ve been working my way through the “joys” of Influenza Type A. When your body has integrity, everything seems to function just right and work is a great reward in itself. When there is an invader like Influenza, everything gets out of kilter…..in a similar manner people can get out of balance with their ethics.

A number of years ago I was asked to mediate between two friends that were having a shouting match about who should pay their landlord $300. It was at lunchtime and I calmly ate my meal while I listened to the both of them really go at it.

I finally got up and said, “You both disgust me.”

They both turned to me and asked, “Why?”

“Because you value the friendship at $300.”

I then walked out…..so much for mediation.

Don’t get me wrong, I’m very happy to help different parties out when there is a genuine dispute over a matter. When people value friendship at so little then it makes anything that I would say as completely irrelevant. These people have much bigger problems than $300.

Escrow.com

At the recent Namescon conference I was speaking to a few guys that jointly owned a large domain portfolio. At the end of the conversation we shook hands on a deal and everything was great. Over the next few weeks they dodged phone calls and avoided replying to emails….obviously, their word was not their bond.

I don’t mind if people get a better offer….this sometimes happens in business but don’t avoid talking to the party that you’ve made an agreement with. If there is a problem then speak with them straight away….otherwise, you end up just looking like an idiot and a person that lacks integrity.

I was recently speaking to one of my kids and they were faced with an opportunity that could have saved them literally thousands of dollars with no one knowing. For some stupid reason they got me involved and they asked, “What should I do? No one will know.”

I immediately replied, “But you’ll know.”

There’s no such thing as “no one knowing”….it just depends how much you’re willing to ignore your conscious and sell you’re integrity for.

My business partner and I had a coffee at a local shop and we were so focused on our conversation that we just got up and left without paying the bill. The next day we discovered our error and I made the journey to the shop to fix up our bill. The coffee shop owner was stunned that anyone would make a special trip to pay for their coffee…..I didn’t want to know that I’d just sold my integrity for the price of a coffee.

Integrity is as much about being true to yourself then being a bit of a showman to those people around you. It’s being able to look in the mirror and like the person that is staring back at you.

The benefits of leading a life of integrity are multitude. When you sit down and talk with me I’ll tell you things straight. I won’t lie, shake your hand on a deal and then renege. If I can’t tell you something then I won’t. I’m entirely disinterested in short-term relationships which means that I’m committed to developing our relationship into the long-term. You should have the confidence that you’re dealing with someone that respects you and just as importantly, takes it very seriously when asked to look after your assets.

The benefits to me are incredible. I end up doing business with some really great people. I’ve known many of them for well over a decade and had the pleasure of seeing their children grow up. I don’t have to remember which lie I told to whom….I just tell the truth….it’s so much easier! If something goes wrong then we discuss the issue together and work on resolving the problem together.

I have people ask me what’s the secret of running a successful business and I tell them it’s really hard but also really simple. Live a life of integrity and you’ll attract the right customers that stand with you rather than war against you.

The result of this mindset has been that my own company, ParkLogic, has continued to grow year after year. Every client has a line directly to me. If there is a problem I want to get it resolved as quickly as possible. I also like hearing about the good news as well!

I would like to say that I get it right all of the time….but I don’t. I make blunders and the wrong decisions on a regular basis but I would like to think that I make amends, learn from the experience and move on. Living a life of integrity is not a destination but a journey of constant self-improvement. It’s working on the little things and learning to enjoy the simple satisfaction from doing what is right.

Like my Influenza Type A, knowing that you’ve just done the wrong thing can begin to eat away at you…..trust me when I say that it’s not worth it. When I got sick I went to the doctor to get checked out….who do you go to when you damage your integrity? Everyone needs someone.

Have a great weekend!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Saturday Musings - A Sad Tale

Saturday Musings - A Sad Tale

I was talking to a 20 year old at a party last night. I generally enjoy getting enthused by young people as they tend to have a really different outlook on the world which inspires me to new ideas. In the case of the young man, it was really sad to see that his life completely revolved around doing absolutely nothing. Nothing isn’t strictly true, as he sits in front of the television watching movies or playing games all day. Doh!

I love life and just wished that I had more hours in each day to do all the incredible things that seem to come my way….so to say the least, I was a little flummoxed during the conversation. His speech was slow, he moved slowly and everything about him seemed to be just plain slow. There was nothing wrong with is faculties but he had just ground down to a halt.

I tried to get him excited about doing Youtube videos or a blog about something that he was interested in. He told me that they were awesome ideas but when I looked in his eyes I saw that he was going to do absolutely nothing.

In the end I said to him, “I’d never ask you to do anything for me.”

He replied, “Why not?”

I said, “Because you’re not busy.”

It was his turn to be a little confused so I expanded on what I meant by saying, “In my experience, if I want something done then I give it to a busy person. They add it to their list of things to do and it gets done. People with a lot of time on their hands tend to push things off to the next day.”

As I looked into the young man’s eyes I could see a light bulb suddenly turn on in understanding. And just as quickly it looked like the dimmer switch had been wound back. There was nothing…..absolutely nothing there.

What’s amazing is that it’s actually quite easy to become a successful person online and make a whole lot of money. All you have to do is create at least three blogs or videos per week for about five years. Over time you’ll build up a lot of content that Google just loves and you will gain a following.

The problem with many people is that they give up after the first few months. I’ve been writing my own blog for over ten years and during that time I’ve built up a lot of readers. The challenge is to constantly provide quality content that readers want to read…..if you disrespect your readership in this manner then don’t expect them to hang around.

This is actually a really good lesson for young people. It’s rare that anything happens quickly….good things take time and perseverance. The problem with the instant generation is that they expect to become an instant hit immediately and get despondent when it doesn’t happen.

My book Battleframe took me around 20 months to write and publish. My company, ParkLogic has been in business for over 8 years. As I mentioned, I’ve been writing my blog for around 10 years and been in the domain industry for around 14 years.

Sure, I’d love instant success with any one of the new business ideas that I’m trying out but I’m also realistic in that I know that it just takes time. Some people think that it’s luck that determines success. Golfer Arnold Palmer said, “It’s amazing how lucky I seem to get the more that I practice.”

Have a great weekend!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Common Domainer Misconceptions

Common Domainer Misconceptions

One of the easist mistakes many domain investors make is paying too much attention to their average daily revenue and not really understanding what it really means. The average daily revenue is made up from all of the individual earnings of each domain in a portfolio…..which makes sense but underneath that statement is a lot of hidden meaning.

A couple of years ago I met with the CEO of a large domain portfolio and they were amazed when I began to unpack the data that made up their average figures. So let’s look at a number of the misconceptions that many people hold to around their average numbers.
 

The Law of Averages

It's best to look at an example to illustrate what I'm talking about. Let's imagine that you have two domains in a portfolio, A.com and B.com. The average earnings per day for A.com is $1 and B.com is $0.10. Obviously, the average daily earnings for the portfolio is $1 + 0.10 = $1.10 per day.

If you are able to increase the earnings of B.com by 50% (which is a lot) then the earnings become $1.15 per day....which is barely a blip on the radar for most portfolio owners. Now here's the interesting part. Most people have 10 times more type B domains compared to type A domains. This means the average daily earnings is actually $1 + 10 x $0.10 = $2 per day.

Escrow.com

If we increase the earnings of all type B domains by 50% then the results is $3 per day or 33% increase overall in earnings. This is a substantial uplift and is ACTUALLY ACHIEVABLE....all you need to do is really think about how your domains earn revenue. Here are three misconceptions that many domainers don't really think about.
 

Misconception One - Park All Of Your Domains At One Place

The problem with most domain owners is that they leave all of their domains with a single monetisation provider. This strategy can have a dramatic impact on your earnings.

After collecting data across the last 8 years at ParkLogic we've seen that no single parking/monetisation source wins more than 25% of the traffic at any point in time. This means taht you could be getting paid more for your traffic 75% of the time!

What's interesting is that this doesn't really depend that much upon your revenue shares etc. You could be getting paid 100% and the results are still much the same. The reason for this is that around 30% of the domains move every 3 months to a new higher paying solution. Finding out which 30% should move is part of our "secret sauce".

If you want to increase your revenue then do NOT place all of your traffic domains with a single source.
 

Misconception Two – Google Pays The Most

As much as parking companies endeavour to optimise traffic they largely have their hands tied behind their backs by Google. How is this? For a start, assuming that your domain is not blocked by Google (ie. it’s not a bad domain) then contractually the traffic for that domain MUST first be monetised by Google to the exclusion of all other monetisation solutions. This means that the domain traffic ONLY gets Google’s best price and this is not necessarily the top price that a domainer can receive for their traffic.

Never forget, that although Google is a key domainer partner they are obligated to first increase shareholder value and that improving your revenue comes in a distant second place. As can be seen from the below graph, for the past ten years Google has been driving down their Traffic Acquisition Cost (TAC). The domain traffic channel is a part of the TAC.

Google TAC

I recently conducted a test on a small domain portfolio that were being paid less than 1RPM by Google by routing the whole lot to tier 2 providers. The result was a 37% increase in revenue. This increase would never have been realised if I hadn’t conducted the test.

The next stage in the test is to continue to route the domains that were performing better on tier 2 and re-route the balance back to Google. Finally, the optimum answer is to then automate the process so that the traffic will always be paid the highest price by the entire market….and not just the Google market.

It’s clear that by continuously driving TAC down Google has now reached the point where tier 2 providers are clearly competitive. I don’t know any domainer that wouldn’t be happy with a 37% uplift in revenue! In a future article I want to really pull apart TAC and what it means for domainers.
 

Misconception Three - The Euro to $US Exchange Rate

What many domainers don’t take into account is that the Euros/$US exchange rate can play a very real part in the average performance of a portfolio.

For example, let’s imagine that we are comparing the performance of a portfolio 30th June 2015 against the same time in the previous year. During this time the exchange rate has decline from 1.37 $US per Euro to 1.12 $US per Euro. That’s a decline of 22% that impacts negatively the numbers of any earnings for US domainers earned in Europe. Conversely, European domainers are loving the decline in their currency as the majority of online advertising flows from the US and they get paid via the US/Euro exchange rate!

Exchange Rates

Let’s make this a little simpler to understand. Let’s image that in June 2014 a European domainer parked with Domain Sponsor (US company) and they earned $1. They would have received $1 /1.37 or 0.73 euros. Ignoring all other effects that same domainer would now earn $1 / 1.12 or 0.89 euros. This is a big change in earnings that is largely brought about by the currency fluctuations.

The massive decline in the euro has meant that European domainers are enjoying a free increase in their parking earnings courtesy of absolutely no one. So many of the German domainers really need to go and thank their southern Greek friends.

So when a baseline is taken from a previous point in time....one of the things that you may have to consider in determining the success or failure of a test is the exchange rate. You also need to think about where your traffic routes through to and whether you can take advantage of the local advertisers and exchange rates.

 

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

 

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The Cult of Personality

The Cult of Personality

In every industry there are people that we all can be tempted to aspire to be like. I’ve watched some domainers desperately believe that if they follow an industry celebrity then they will achieve the same level of success. Sadly, they get swayed by a personality and completely ignore the results.

When you’re at a conference it’s really easy to get caught up in all the hype and you can fool yourself into believing that everyone is much more successful than you. Let me say from the outset that the great majority of numbers that you hear can be divide by at least three. So don’t panic and just keep your eye on your own key business metrics.

Escrow.com

When you get home from a conference and sit there alone wondering how you’re going to pay your domain renewals, the parties and personalities seem to become a distant memory. All that counts is the bottom line.

So don’t be swayed by the personalities…..dig into your own numbers. It takes a lot of work and skill to understand what is actually going on with a domain portfolio so that you can make sound business decisions rather than an emotional ones.

Don’t get me wrong, I love having a great time as much as the next person and it’s often the personalities in our industry that make it so exciting and vibrant. But business is all about making wise decisions rather than jumping from one miracle cure to another because someone said that the new solution was just so awesome!

Always ask yourself the question, "Who is ultimately who is looking after my valuable assets?" Are they measured individuals that will treat your family’s inheritance with the respect that it deserves or will they party like there’s no tomorrow on the value of your domains?

I don’t know about you but there are some personalities in this industry that I wouldn’t let within a hundred feet of my assets! The short-term excitement of being with these individuals may be exhilarating but remember when you leap off a cliff the fall doesn’t kill you….it’s the inevitability of the ground rushing towards you that does the damage.

Our whole industry is built on numbers. Numbers of people come to our domains, numbers of people click and numbers make up our revenue. Don’t lose sight of the fact that it’s the numbers and not the personalities that we should be watching.

There's a great saying that goes something like this, "Don't speak to the butcher if you want to invest in precious stones....speak to the jeweller." In other words, find the real experts in the industry and get to know them. They are often the ones that are quietly going about do their work.

And ultimately, get inspired by others but don’t aspire to be like them…..just be yourself.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Good Players - Jothan Frakes

Good Players - Jothan Frakes

I’ve been asked a number of times about who are the really good players in the domain industry. I thought that from time to time that I would highlight these individuals that quietly go about their business. They are people that are generous with their time, are absolutely trustworthy and great fun to be around…..in essence they are the heart and soul of what it means to be a domainer.

Escrow.com

Jothan Frakes

I first met Jothan many years ago at a TRAFFIC conference and we talked into the small hours of the morning about the domain industry. During this time I gained an enormous amount of respect for him as one of the most knowledgeable people in the industry.

Our relationship really cemented at the TRAFFIC Downunder conference when he was part of a group of domainers that flew light aircraft back from the Gold Coast in Queensland to Melbourne. I was one of the pilots and it was a great time getting to know Jothan on both a professional and personal level.

Jothan has played many diverse roles in the domain industry but it is clear that he has a real gift for running exceptional conferences. From founding the successful Domain Roundtable conferences in 2006-7, to being intimately involved with DomainFest while it was with Domain Sponsor and now with the largest industry gathering, NamesCon. Jothan has developed a unique gift for conference formats, topics and promotions. Even now he is launching a series of regional conferences under the DomainFest banner – information on the next one can be viewed at doaminfest.asia.

The reason for these successes stems from the fact that Jothan consistently works incredibly hard at whatever he puts his hand to. When you speak with him you have his 100% attention and if he doesn’t have time then he’ll politely let you know.

Jothan has spent countless years attending ICANN conferences and helping raise the domain investor flag with registries, registrars and policy makers. Without his endless lobbying domainers may not have some of the protections over their assets that they enjoy today.

What many people may not be aware was that Jothan was intimately involved with the approval process for many of the new gTLDs. He conducted this extremely confidential work as a contractor for accounting firm KPMG and clock up endless numbers of air miles between the USA and India.

As you may have ascertained from his professional life, Jothan is one of the most connected people in the domain industry, knowing the domainer, parking, registrar, registry and ICANN sides of the business. If you ever need an introduction to almost anyone then Jothan is very likely able to make the connection.

When I first met him, Jothan’s one failing was his desire to help everyone and sadly I’ve seen people take advantage of his big heart. Thankfully, this exceptionally generous attitude has been tempered with wisdom as he’s continued to develop his professional career.

Personally, I count Jothan as a great friend with whom I have complete trust and confidence. More than all of these things, he is a down to earth fun person to be around that always has a great joke (seriously, he has some really good ones!) and a welcoming smile. I have had the privilege of meeting his wife and the three of us have had way too much fun together!

These are only a few of the reasons why Jothan is in my “Good Player” list. No matter how busy we both get we always make it a point of catching up at conferences to swap stories and learn from each other. He is the quintessential “Good Player” of the domain industry.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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