One of the most frustrating things about the domain industry is the complete lack of innovation. This isn’t necessarily because companies don’t want to innovate but more because they are caught in a bind and can’t innovate. What do I mean by this?

Every company should be evolving. Evolution has the sense of slow change over a long period of time where internal processes are streamlined, website made “snappier” and customers are being looked after. These are all important things to do but they stem from the evolutionary basket not the revolutionary.

A revolutionary change is where a company completely transforms an industry, and everyone looks up and says, “Why didn’t we think of that?” It’s looking at domains and saying, “I think there is an aftermarket for them.” In its day, this was a revolutionary concept. It’s looking at domain traffic and matching it up with advertisers…..again, another revolutionary concept.

The problem the domain industry has is it’s been caught in the revenue bind. This is where the bean counters look at resourcing a new idea as a cost rather than as an investment into a competitive advantage. Serious innovation often means cannibalising existing revenue streams and this is regarded as a “no go zone” by managers that are given quarterly targets.

So what are the domain industry’s really big issues? What should we be driving innovatively to solve and what issues are way beyond the scope of short term solutions?

When I think about the really big issues in the domain industry I find that I’m forced to reflect on the four primary business models associated with domains:

1.       Selling domains like stock items
2.       Selling high value domains
3.       Traffic monetisation
4.       Development

Selling domains as stock items is all about increasing the sales turnover of low value domains (sub $2K) in your portfolio. This is similar to a supermarket which operates on low margins wanting to increase the throughput of products being sold.

When you look at the incumbents in this market they have all been trying to increase the demand. This has largely been achieved through increasing the breadth of their distribution networks (ie. Registrars) so their inventory is exposed to a larger audience.

I see a number of innovations that centre on pricing that can be explored in this market and I will discuss two of them in this article. To date, the feedback from domain marketplaces has been that if a domain is priced it’s more likely to sell. This seems to make sense as buyers like to know what they are about to pay for domain rather than “make and enquiry”.

If I was to describe this year in one word it would have to be “innovation”. For a long time, the domain industry has been doing the “same old same old” with a tweak here and a tweak there but I believe this year is going to see some massive changes.

For the last fifteen years, the domain industry has been caught in a malaise where landing pages look the same, domain market places are basically the identical to what they were and development has migrated up the content management systems version numbers. All a bit of a yawn.

While I was at NamesCon I perceived a growing sense of frustration and tension building in the air from people who wanted more for their domains. It was almost palpable. When there is a growing demand from the market then I’m a firm believer that innovative companies and individuals will seek to fulfil it.

I took a few days’ vacation immediately after NamesCon and one of the things I love to do is read. I picked up Elon Musk’s biography (Tesla, SpaceX, SolarCity and Paypal fame) and was stunned by the similarities between the markets he has entered and the domain industry.

For example, with Tesla the incumbent automotive industry was a lumbering giant that was incredibly slow to adopt anything innovative. Musk steps and from nothing builds the world’s first high performance all electric production car. With next to nothing he’s built Tesla into a powerhouse of innovation that is leaving the other car companies in the dust.

The same could be said for SpaceX. Through innovation he has transformed the space industry and has the audacious goal to colonise Mars…..which brings me to my next point for the domain industry.

It’s not enough to be innovative or even meet pent up demand with innovative solutions. What is keeping me awake at night (other than jetlag) is why we are doing what we are doing? Is it just to make money or is there some vaster, bigger more all-encompassing goal? What is it that we actually do and how does this translate into an inspirational vision?

At an individual level, many of us have been so caught up with analysing statistics, trying to get the next sale or build out a website that we’ve forgotten why we are doing what we are doing? From an industry perspective, the concept of an inspirational vision seems even more far-fetched.

So why will this year be different? I’ve come to the conclusion that it has to be…..because if it’s not then many of us will die of boredom. We entered the industry as entrepreneurs and have become managers….even if we are very successful at what we do we have this gnawing internal desire to still shoot for the stars!

In the companies I’m involved in I’m looking at these big questions and then aligning innovative ideas and people behind them. My job is then to remove as many of the blockages as possible from their path so that dreams can become reality. It's going to be a really tough task but one that I hope will start to bring positive change to the industry.

Have a great weekend!

When we reflect on the last hundred years of history innovation has been rampant as one breakthrough after another has succumbed to the creative talents of people who think differently.

Think about it, just over a hundred years ago the Wright brothers flew for the first time at Kittyhawk and now humanity has been to the outer reaches of the solar system. The rate of change an innovation is simply staggering.

I found myself reflecting a lot about innovation this week because on Monday I took delivery of an Oculus Rift Virtual Reality head set. I’ve been waiting for over five months for the Oculus and it’s been twenty-two years since I first experienced VR at the Walt Disney Imagineering labs in Florida. You could say that my expectations were pretty high!

It only took a couple of minutes to setup and then I put on the head-mounted display unit for the first time. To say the experience was staggering is an understatement. The sense of being in a virtual world was completely engrossing, including feeling vertigo in a demonstration which involved standing on the edge of a skyscraper.

I fired up a futuristic star fighter flight simulator that involved being launched out of a space-carrier and into the middle of a space battle. I can look behind me, above me and forward as enemies’ wheel around my ship and try and get a missile lock. Flying behind asteroids and other structures for cover is entirely real as they swoosh past my left and right. I was really there!

An interesting thing happened to me when I left VR. I began to think about the computer generated world as being all around me. Staring at a flat monitor as I write this blog just seems so old hat now. There is one thing for sure we are on the brink of a VR revolution that will change the way we interact with computers forever.

So after my bit of playing around I downloaded Unity 3D to start to learn how to program the Oculus myself. With a bit of help from an Amazon book it wasn’t long before I donned the headset to explore a world that I had created. This was a lot more fun than flying spaceships!

I’m a firm believer that if you want to really be innovative then you need to be learning about technological advances when they are in their infancy. When the Internet was first commercialised in the early 90s I founded an ISP because I wanted to learn all there was about the Net. Likewise, I did the same thing with a broadcast technology that I developed back in early 2000.

Before founding ParkLogic I learnt a lot about domain names by being a domain investor myself. This innovative philosophy is at the heart of why ParkLogic is so successful with domain investors all across the world. We are constantly looking for new innovative ways to extract greater value from domain traffic. The reason why we never stop is we have a mantra of “Innovate or Die”.

I had a discussion with one of our team this week and he was asking why we were testing out a new monetisation opportunity. I replied by saying, “We are charged by our clients to constantly find better ways of monetising their traffic. We can’t just rely on a single source of revenue; we need to innovate for our customer’s sake or we should stop right now.”

Every day I read a synopsis of the latest innovations in technology and science from around the world. For example, quantum entanglement will not impact the domain industry in the short-term but in the long-term it’s going to change everything. Behind the scenes Artificial intelligence is now changing the way we interact with the web. How it will change the domain industry is anyone’s guess.

So the question I have for you is what have you done in your business that was different today compared to a few years ago? If you’ve been doing the same thing with your domain traffic as you’ve always done, then don’t be disappointed with poor results. Give me a call, do something different and be amazed at the outcomes at little innovation can generate.

Have a great weekend…..I know that I will because I’ve got a world to build!