Supernatural Agency: Online business tales

While I typically agree with those who find Business Week to be a great contrarian indicator (get lauded on the cover, watch your your stock go down), this article on the impact of applications on iPhone and the Google Phone OS gets it.

Basically, software developers don’t like to develop for mobile because the phone industry is too greedy and too fragmented. Every carriers wants their own piece of the pie, a big one, and they want the apps customized so they only work in their network. In my own experience working for a web-based email provider we found that the telecoms we sold private label versions to would only pay a few cents per user. For the average developer this simply isn’t worth the hassle.

Now, with an SDK (software development kit) coming for iPhone and the rumored Google phone operating system, we’ll have environments on phones to run apps that are not associated with the networks. This will re-engage those software developers who walked away from phone apps. The key to this, as anyone who reads this blog knows I am obsessed about, is the full browser on the phone.

Bye bye .mobi.

Hello web 3.0 on a mobile device.

And cheers for not requiring a laptop just to check my mail and the web while traveling… Next year everything changes again.

“Internet traffic and domains are the prime real estate of the 21st century. This market has matured, and individuals, brands, investors and organizations who do not grasp their importance or value are missing out on numerous levels.”

- Quote from Steve Forbes‘ press release announcing his keynote at Traffic East 2007

It’s worth registering at one of the domain parking/auction services like Sedo just to watch the bidding action on domains available through their system. If anything, this verifies my belief that we are entering a rapidly expanding price bubble for domains. The current bidding list is filled with nonsensical domains with non dot com top levels that are going for 300 euros and up (Sedo has a UK centric market though they are in the US also). Any 3 letter dot com is in the high four figures to low five figures.

When you consider country codes and languages there are innumerable combinations to buy and sell, however the lack of many dot com type-in domains on this list tells me that the market for them is far from peak. We’re seeing lots of marginal activity and I have no doubt that dealing in these oddball URLs can be very profitable. After all, selling something you bought for a few dollars for $400-500 is a very nice return, especially if you can do it consistently.

This kind of trading is probably the domain equivalent of day-trading in volatile stocks. The value of this kind of trading to the market as a whole is that it serves to stabilize prices over time and create a real market as traders arbitrage small changes in value. Of course we do not yet have a means of shorting domains so the stock market metaphor has limited relevance.

For the areas we’re focused on (dot com type-in and category domains) a longer time frame and more development is important. Every new domain gets parked until we can do something better in terms of content and optimization. The best ones get more serious web presence and more advanced monetization along with PPC campaigns.

As I’ve mentioned before, the challenge here is to know what to sell and when. For type-in dot coms the answer may be never, as long as they generate revenue and retain relevancy. In our case our business plan has a number we are reaching for before we get out but we’ve also discovered that business plans are subject to change!

The big unknown factor is you, the world. When domains become everyman’s (and everywoman’s) game, as I think they are, then everything changes. The pros will face an interesting dilemma called ’stay in or get out?’. Fortunately it is not a zero sum game- we can do both if we manage our portfolios intelligently.

Customers, clients- what if you did not have to deal with them at all?

Is a business a business if it does not require customers?

If you invest in a portfolio do you have customers?

If you never deal directly with your source of revenues are you a business?

These questions have been rattling around in the back of our minds lately. If we’re building an affiliate site, for example, and getting commissioned for referrals, do we technically have customers? Are the businesses we’re sending traffic to our customers?

If we’re parking domains and monetizing them with great content, are our visitors our customers? Do we owe them anything?

Our business cards are these cute little Web 2.0 cards from Moo. We got them because they are different and we are unconcerned about being ‘businesslike’ or ‘professional’ by the old standards. We don’t solicit customers and any networking we do is because we find it interesting, not because we need to do business development so the card is more like a calling card than a business card.

Ironically, people really like them and remember them.

So, we acquire our customers by joining programs or doing a good job promoting our sites. We don’t typically communicate with them face to face. We do get feedback via blog comments and the occasional email but 99% of the time this comes from peers doing similar things, not from someone who ‘did business’ with us.

This is a different business model. I think it’s something new…

Paul Graham of Y-Combinator on how the entire environment for doing start-ups has changed. I don’t need to elaborate- just read the post. Brilliant and incredibly important for any entrepreneur.

If anything validates our virtual business model this is it.