I’m going to say something pretty controversial, you can’t build a business off big deals. Don’t get me wrong, I love a big deal but to build a business off them is next to impossible.

I’ve talked to so many entrepreneurs that espouse the next big deal that’s just about to land. In fact, just the other day I was speaking to a person not in the domain industry that told me they had a million dollar deal they were about to get commission on. The problem was they’d been working on the deal for the past two years….

Whenever I hear someone talk to me about a big deal I immediately give it about a 1% chance coming off. Big deals are like that. They take a huge amount of time and resources and have a slim to no chance of actually coming through.

In a number of past articles, I’ve spoken about the fact that traffic quality is entirely dependent upon the advertiser. If the traffic works for them then it’s high quality, otherwise it’s low. This has always seemed to make sense to me until I began digging a little further…..and now I think I could have been wrong...

Over the last couple of years ParkLogic has been experimenting with how to best define traffic quality. We’ve tried quite a number of third party services that are used by advertisers and what we’ve found is there seems to be a lot of smoke and mirrors bundled with some hefty fees.

The problem is that many advertisers rely upon these services to determine whether traffic they are purchasing is of a high quality or not. It’s the very sophisticated e-commerce website that attributes a traffic source id to a click and then tracks it right through to a purchase.

For those advertisers that wave the flag of Google Analytics then think again. If you think about it, Google is essentially in conflict with itself by wanting search traffic to provide awesome results so that the advertiser will purchase more traffic.

Out of all of the different domain investment business models I find myself still a little stumped by some of the actions who invest for domain sales. I understand traffic monetisation and development makes sense but sales is one where I scratch my head…..

I know there are people that make money from domain sales, but it almost seems like a lottery where a domain name is the ticket. The only way to win is to keep on increasing the number of tickets you have in the draw. Inevitably the law of diminishing returns comes into play and a pile of domains are dropped as they were obviously the wrong tickets…..sigh.

Being a numbers guy, I wanted to dig into what was going on in this part of the industry so the first thing I did was make some back of the envelope calculations in Excel. I’ve often commented that Excel is the best computer game on the market….it allows you to model just about anything and then time travel into what would happen in the future. Awesome!

I should say at the outset that I’m looking at the domains that fall into the stock-turn category. So those of you that have the premium top of the line domains should block their eyes at about now….actually, keep them open them for the next couple of paragraphs.

Premium domains….are an interesting concept. You speak to most domain investors and they’ll tell you about their awesome list of domains and like a guy selling you watches down a dark alley they’ll ask you if you want to buy one.

This past week I’ve had the pleasure of watching as one of my daughters achieved a milestone that she will never forget. She’d been working incredibly hard in multiple jobs and had managed to save up enough money to buy her first car.

There’s something really special about your first car. Yes, in your late teens it represents the single biggest purchase you may have made in your life up until that date, but your first car is a lot more than just an asset. It represents a sense of new found freedom and that you’re beginning to cut the parental strings.

“What time will you be home?” is answered somewhat like, “When the car brings me.”

I remember my first car, it was a Mazda 1200. Sounds really sporty until you realise the 1200 stands for the size of the engine in millilitres. For those of you that aren’t enlightened about the wonders of the metric system and how everything ends in zero then this is about 2.536 pints. A simpler way of understanding the engine size is to imagine a reasonable sized motorbike engine and then say to yourself, “That looks about right.”

My first car cost me $200 and came with air conditioning. Well, sort of anyway. The floor was so rusted out that you would get a beautiful rush of air that tickled your toes as you drove down the road. This was great in summer but in winter it was miserable until I squashed a few coke cans down to cover the holes.

The driver seat was bent way back and so being an enterprising young man I built it up with some blankets so that I didn’t feel like I was in a recliner lounge as I drove down the road.

I was just interviewed by Ed Keay-Smith from domainer.com.au the other day. I was first interviewed by Ed over a decade ago and it was great to spend some time together again reflecting about the domain industry.

We covered a wide range of topics including; monetisation, the new gTLDs, domain sales and a bit of history about what has happened in the domain industry over the years.

I hope you enjoy the video.