"If Only I Had Been Around in 2008"
The word is out: The domaining bubble has finally burst. Many domainers are short on cash and prices are falling across the board. What created the bubble, how did it end, and is there a way to profit from the slowing economy and financial crisis?
The Components of a Seductive Bubble
A significant percentage of the domaining bubble was funded by the monetary expansion that started immediately after the dot com crash in the early 2000s but did not gain full speed until 2005. There was lots of easy money out there seeking investments; some companies in the domain industry obtained huge lines of credit to enlarge their domain portfolio, while individual domainers mortgaged their homes so they could acquire yet another valuable domain. Other domaining companies were even funded by venture capitalists who at the time thought that domains would be the next big thing.
Another part of the domaining bubble was built upon rapidly increasing enthusiasm on the reseller market. Many domainers believed that prices would only go up and that if they bought a certain domain today they would just have to wait a month or two before they could sell it at a significant profit. For several years in a row that assumption was true, and as word spread it attracted new domainers and reinforced the bubble.
Accepting Reality Means Attracting Profits
It is increasingly obvious that reality has set in. The easy money that characterized the last decade is gone. The get rich quick domainers who entered the market in 2006 and 2007 have either gotten rich or given up. And most domain prices have come down to an entirely reasonable level where it's good to be a buyer again.
A Unique Window of Opportunity
The best years in history to get into domaining would have been 1994 and 1995. Domains were virtually unknown and a few visionaries who refused to sell out early eventually made a killing. Another major opportunity opened up in 2001 and 2002. "Dot com" had become a dirty word and most people wanted nothing to do with Internet-related investments.
2008 and 2009 will be another two of those years where everyone believes the sky is falling while the visionaries of today are constructing the empires of tomorrow. Take this chance because the next window of opportunity might not come around until 2015/2016.
How To Start With Nothing
It's not easy to start with nothing. If you're low on cash and your friendly bank won't loan you other people's money so you can speculate in domains, you will have to start small, learn everything you can, observe those who are successful, then work hard and bootstrap your way up.
Start with a couple of domains, sell them at a profit and immediately reinvest your profits. Domain development is another option, but do not get sidetracked with this unless you decide it will be an essential part of your business strategy.
The opportunities are out there. A few years from now you can be the next domaining mogul, or you might be one of those people who will say, "If only I had been around in 2008. Things were different back then".
Will you take action or have you already given up?
