Blogs about the domain industry and the various players and companies within it.

ICANN Los Angeles Wrap Up

At long last I’ve finally returned from attending ICANN Los Angeles. So was the jetlag, long hours and sitting in a flying tin can for a day and half worth it?

I found that the main attraction for me was that there were a lot of domain owners at ICANN that were looking for a solution that ParkLogic provides. This was great news and we ended up doing a lot of business.

I spent the majority of my time either in meetings or hanging out in the lobby waiting for my next meeting. I think that we had about 30 scheduled meetings and many more that were impromptu while passing someone.

As always, I enjoyed catching up with the many, many friends that I’ve made over the years as well as making a bunch of new ones. Both Joe (from ParkLogic) and I have been working with many of the people that we met for years and putting a face to a skype voice was fantastic!

A real highlight for me was when a group of us hung around a fire pit at the Intercontinental hotel until about 2:30am. It was a chance to really get to know the .green team and hear about their passion for the extension. Dirk from .club was also there and it was great to hear his story and journey over the last few years. We sometimes forget that with all of these new gTLDs that there are real people with real lives behind them that have often put everything on the line to see the extension come alive.

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mgilmour
No I didn't meet anyone specifically from China....although there was a lot of people there. I think that it could be worth going ... Read More
25 October 2014
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What was the ICA thinking?

The Internet Commerce Association (ICA) has just altered its membership structure and the way that board members can be elected. I must admit that I applaud the efforts of the incumbent board in trying to juggle the various stakeholders but let’s try and unpack what they’ve actually changed.

There are four classes of membership:
Platinum - $25K/year and an automatic board seat.
Gold - $10 to 24,999/year
Silver - $5,000 to $9,999/year
Bronze - $1,000 to $4,999/year

What’s interesting is the way in which new board seats are awarded. For every $25,000 in revenue a new board seat is created and the gold silver and bronze class members can nominate a member or non-member to the position. There is an election where Gold members have 5 votes, silver members 3 votes and bronze members 1 vote.

From what I see of this structure is that it rewards those with the cash. If you have money then you can effectively buy a board seat at the platinum level. This works well for a commercial organisation that has profit as the motivation but I do not believe that it is healthy for a non-profit association.

In an association the motivation needs to be for the common good of the industry. When it can be seen that members can buy seats then it can be construed by the wider domain community that the association can essentially be “out for hire”. If EVERY seat is up for election then this issue can never arise.

By tying the number of board seats to the revenue line of the association means that as the association becomes successful then it will either have a HUGE board or the $25K hurdle is increased. This will effectively enshrine the “board seat for money” ethos. What I believe it actually means is that the ICA is planning, at its core, to remain a small association. I don’t really understand why you would do this.

Just think about this. Let’s imagine that the association grows and the revenue line becomes $500K/year. This means there will be 20 board seats which in my opinion is way too large. Even Jesus had 12 disciples and one of those didn’t work out too well!

The converse to the situation is if the ICA contracts during the hard times does this mean that the board shrinks in size? This is crazy! This is the time when the board needs to become highly active to ensure that the existing and new members appreciate the value proposition. So just when the association needs the board it slashes the number of positions to reinforce the downward spiral. Why would any association do this????

Now let’s look at the voting structure. The first thought that I have is when a new board member is voted to the board who do they represent? The current structure doesn’t have a representative side to the voting system….it’s all money based. Wouldn’t it be good to have the monetisation, sales, development etc. constituencies rather than just platinum to bronze? Elected board members would then know whom they were elected to represent.

It doesn’t take too long to work out that I can get 10 votes for $10K at a bronze level 6 votes for $10K at silver and 5 votes for $10K at a gold level. How does this make sense? It doesn’t. As soon as you tie money back to number of votes then you no longer have a truly representative association.

What would have been better would be to have 3 board seats plus the CEO for all four classes. This would provide 12 board seats. Each class can vote for the nomination in THEIR class with ONE vote per member. As the association grows then the board seats will become more precious and even prestigious.

Since there are less members in the Platinum class then they are more likely to get voted onto the board. The competition would potentially be fierce at the Bronze level but they can still be nominated and still be elected to the seats allocated to their class.

This is democratic, representative and fair. It detangles the money from the number of votes and resolves the tying of the revenue line of the association to the number of board positions.

So what has really changed with the ICA announcement? I’m not really sure. There was nothing about vision, values or issues that are currently being tackled on behalf of the industry.

Unless I'm not clearly understanding the ICA boards decision, I don’t think that they have really thought about implications of what they have proposed. By putting this out in the public domain as a decision versus a discussion document the ICA board is now committed to a direction that in my opinion will not inspire the industry to get behind them.

As always, I’d be more than happy to discuss any of this with any ICA director.

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mdafni
Ouch. Is it any wonder that it is so difficult to get those in the industry involved?
09 October 2014
donna_mahony
Not even worth paying attention to any more. The ICA Facebook page is just kudos to those who gave money, this new announcement is... Read More
09 October 2014
mgilmour
Completely understand your position Donna.....don't blame you really
09 October 2014
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A Domain Name Association - part 6

I had an interesting question in one of the forums about the topic of a domain industry association. The question was, 'Why is Michael doing this?' This question really caused me to think why I was spending time thinking about a domain association and it justified an answer.

I looked at the two associations (thedna.org and ICA) and it was clear to me that they really didn't represent the interests of the typical domain owner in any way. For a start I have a real problem with any association where board seats can effectively be purchased. This is fine for companies where profit is the motive but in my opinion it is not OK for an association.

If an association is to truly represent members then EVERYONE needs to have an opportunity for a board seat....hence the concept of classes of members and an allocation of board seats per class that individuals could potentially win via an election in their class.

There also needed to be different fees per class (hence the financially modelling at the end of the presentation). The great majority of domain investors aren't able to afford $5K/year but many would put up their hand for $250/year.

Given the challenges I saw with the current associations I wanted to push the discussion forward in such a manner that it at least reached the two associations and a dialogue established at the domain investor level. So where am I at with my goals?

 

1. The ICA was represented by Andee Hill in the webinar (she is not a director of the ICA). The other directors of the ICA are trying to work out when they are able to jump on a call with me.....I think that many of them have been on vacation.
2. I have been contacted by the chairman of thedna.org and he is connecting me with the CEO. They are completely open to everything to embracing domain investors. This includes changing their constitution to ensure that domain investors have representation at the board level. It was actually a refreshing conversation with the chairman.

I find that the bigger challenge is to engage the domain investment community themselves. What has surprised me is the general apathy towards both associations and the discussion itself. There appears to be a disconnect in the VALUE provided by either association for domain investors. This could be a function of us tending to be "lone wolves" but I actually don't believe this is the cas e as domain communities do exist. Fundamentally I believe that both associations have failed to prove their value.....and more importantly for me.......I've failed in someway to proactively engage the community as well.

For example, out of the whole industry about 9 people said they would attend the webinar.....6 turned up. I've run webinars before on topics such as selling domains and had 18 people say they would turn up and 18 did. Just for the record I think that anything over about 15 people can become quite unwieldy. What's interesting is that over 500 people have read each of the articles in the series on "A domain association". This tells me that the topic is important to people but they aren't willing to engage as yet.

I would be interested to know if I am interpreting this correctly. I would also like any ideas on how we, as a community, can engage more effectively on the topic. Or, maybe we shouldn't and just let the chips fall where they fall . Should I run another webinar? Is the time wrong etc. Any feedback would be well received.....can't promise that I can do something but I would like to do my best and try.

I liked the picture of the key for this article as it has two sides to it. If only one side was present then the key wouldn't work. What we really need is for domain investors to speak to complete their side of the key and get their point of view across to the associations.......and myself for that matter. It's through an engaging dialogue that a better outcome for us all can be achieved.

I look forward to your feedback and comments.

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Domain Association - Part 5

The reason why most people do not join an association is that they don’t clearly perceive what the benefits are for them. We could leave it as, “I feel all good about myself being part of an association” but that doesn’t really cut it from a business perspective.

So why would anyone join a domain industry association?

  1. An association can fight the fights that you just can’t fight yourself.For example, let’s imagine that a domainer found that a registrar was jumping the gun and changing the nameservers on domains prior to them expiring.  The risk for the domainer is that could be “punished” by the registrar if they kick up a fuss…..while if the association had a code of conduct for registrar’s then this issue could be addressed.
  2. There are many fights that you just don’t know about.Whether it be price increases on domains, changes to the UDRP process or net neutrality and liability. There are many issues that actually impact the domain investment industry that as individual domain owners we have little to no say over while as an association we could have a voice.
  3. More confidence in dealing with people of at least some integrity.If there is a “seal” of approval that can be applied to businesses and individuals that agree to abide by a code of conduct then it would provide external buyers/sellers with more confidence that they are working with “good” businesses. Anyone that knowingly transgresses the code could be “punished” by have the right to use the “seal” taken away from them.

    I personally believe that the fastest way that we can all increase the value of our domain portfolios is to behave in a transparent and ethical manner. If an investment firm is wanting to invest $100m in the domain industry then they need to have confidence that they are dealing with people of good standing. Having a “seal” doesn’t solve the problem but it heads us all in the right direction.

There are many other reasons why joining a domain industry association would be beneficial to your businesses. I’m sure that as it expanded there could be deals cut with conferences, parking companies and registrars for association members that would largely offset the cost of any fees…..but that is a little ways down the track.

I’ve had a number of people say that if a person they didn’t like was in the association then they wouldn’t have anything to do with it. Just consider where this line of thinking leads. If everyone thought this way then no one would be in the association because there is ALWAYS someone that has offended you in the past.

On the other hand, if a person is in the association and they agree to abide by a code then their behaviour will need to change or they are evicted. One is backward looking (I was hurt in the past by them) and the other is forward looking (give them a second chance but they must change).

Other people have suggested to me that there are too many different and conflicting issues for a single association to handle. I actually disagree with this. The reason being is that the structure I proposed in an earlier article suggests the application of taskforces that are formed and disbanded as issues arise and are dealt with. There can be as many taskforces that are necessary to deal with the multitude of issues…..all it proves is that an association is really necessary to deal with them all.

Conflicting issues are ultimately addressed by the board and each constituency has an equal say at that level of the association. Remember that the board is charged with the task of expanding the domain industry.
In my time as vice-chairman of the Australian Internet Industry Association there were many times that individual directors were in commercial conflict with one another. The challenge for the board was to always focus on what is best for the industry and not just a particular member.

I hope that you have found the series on a “Domain Industry Association” interesting and thought provoking. I’ve had a LOT of feedback via email…..feel free to leave your own public comments as well.

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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 is the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael

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A Domain Name Association - part 4

Funding the Association

To be effective the association must have both a representative membership base and also the funds to fulfil the vision and direction provided by the board. There is little point in running an association that either prices itself out of its market or does not have the buy-in of the wider industry at large.

The proposed fee structure is to be based upon the Class and category of membership. Annual membership fees range from as low as $250 for a small individual domain owner doing less than $10K in sales per year up to $25K for a large company doing in excess of $5m in revenue.

By having the annual fees linked to a Class and category (eg. A, B or C) of membership means that the association is affordable to the broad spectrum of the industry. From the previous article I indicated that the members within each of the categories can also nominate for board election to represent their constituency.

There are four major areas of the cashflow.
1.    Drivers – new members and total number of members.
2.    Income from membership fees – other potential incomes have been ignored.
3.    Expenses -  what it will cost to run a lean business with a reasonable CEO package.
4.    Profit and cashflow – results if the targets specified from the above are met.

The drivers outline the targets that the new CEO and board for that matter need to reach in terms of new members by category. After the initial push of gaining 41 members a typical month will mean 10 new members each month for the following 12 months. This will provide near enough to 150 members in the association by the end of 12 months. This does not count the “free” members from the “general user” category that would essentially sign-up for a newsletter.

The above drivers and fees then translate through to the income line of the association.


Finally, the expense are calculated and a monthly profit and cashflow is derived.



As can be seen from the cashflow the lowest point is around $90K positive and by the end of the 12 months there should be near enough to $120K in the bank. The total revenue for the association is $406K with $287K in expenses. This will fund a CEO and membership assistant plus allow ample funds for marketing and traveling to the various conferences around the world. It also allows a not insignificant amount of money for consultants (eg. legal advice, lobbying etc.).

The association will not have an office....I really don't think that it needs one. This avoids a lot of fixed costs and overheads.

So is it financially feasible to build an association based upon these numbers? Although more work may need to be done on the financial model I believe that it does indicate that our industry can support a thriving association. It really comes back to whether the wider community buys into the vision and principles outlined in the initial articles in this series.

There are two keys to building a successful domain name association:
1.    Having a working board – there is absolutely no point in having directors that turn up and haven’t given any thought to the association since the last board meeting. Board members need to be harnessed and put to work for the people that voted them into that position.

2.    Sourcing the right CEO – There are a lot of skills that this person will need to have. Corporate governance, team building, political savvy, respect of the industry and of course an ability to inspire others to join the association. If the wrong CEO is selected then I think that trying to meet the targets will fall largely on the directors…..this may be quite hard.

I know that this article has skirted a number of issues but I believe that it provides the bones from which a good discussion can be had to add the flesh. So please don’t be shy! I’d love any suggestions that you may have and how the association can be given new life and vitality.

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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 is the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael

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