RSS at Feed BurnerBuying a Domain for your Start Up
I generally recommend that people try to get their business going for as little money as possible. Bringing investors in too early is not the best idea. If start seeking money then you will likely spend too much time working on funding instead of building your company. And getting the funding will be harder since you probably won’t have achieved much progress. Once you see some results from your efforts, it is much easier to convince someone to invest in your idea.
Sometimes it is necessary to get funding for a variety of reasons. One of them is to get a great domain for your company. There are a variety of reasons to spend money on a good domain, one of them is establishing credibility. We started a vacation rental site and would contact people to see if there were interested in listing on our site. Most would reply saying they were already on enough sites, but when they saw our site - lakerentals.com, they were much more likely to list. When we were acquired by the Weather Channel Interactive, this was one of the main reasons they were interested in our company. They really liked the domain names we had. So an investment in a domain is usually not a bad investment anyway (as long as you don’t pay too much) because it will likely have value regardless of what happens to your company.
Building credibility is also extremely important for your conversion rates. For example, without looking at the sites, would you rather buy from SoccerPro.com or soccer-training-info.com If you start out with a bad domain name, that can potentially hurt you as long as you are in business. Having an advantage with your conversion rates is a huge advantage over the long term and is largely undervalued.
A great domain also has other advantages including some help with your online marketing. Aaron Wall has a great write up on the value of domain names for SEO purposes and you should check it out.
On the other hand, you can start your venture and validate your idea without needing the best domain name. You can get a domain that could be considered more of a brandable domain, such as wisecamel.com. And if you validate your idea and decide you would like to try to get funding (as well as a different domain), you can always for a 310 redirect to send all traffic to the new domain.
Getting some funding to help purchase a great domain is one of the reasons where getting some funding early on is not a bad idea, as long as you can find investors that realize the value of a good domain name. But it still may be a better idea to hold out on funding and the domain until you have a validated business concept.
on January 8th, 2010 at 12:26 am
I’ve got this bookmarked for a better reading later, but just now I’m too busy with school and rehearsals to really focus on what you’re saying. I’m intrigued, but I need to think about it a lot more before I throw in my 2 cents.