Our Startup Journey
Starting over...1 June, 2016
It's been two years since Steve and I sold our web hosting company to Digiweb (now rebranded Umbrellar) and as our restraint of trade approached, I was keen to get back into the Domain Name business.
We started Web Drive back in 1997 and I loved the experience of building a business from scratch. Back then the term "startup" wasn't a thing; you were simply starting a business. And there were no billion-dollar valuations of early-stage tech startups to make you feel like a failure if you didn't hit it big within two years.
It took us 17 years to turn our company into a $10 million business. To any young upstart that would seem like a lifetime and possibly enough to put them right off any romantic notion of starting a tech business.
But that's what it took; two years working full time without pay (everything went back into the business) and 9 years before we felt like we'd "made it" and could start enjoying the fruits of our labour. At that 9-year mark we employed 4 full time staff, which included Steve and me. Just 5 years later we employed 50 full-timers.
So things accelerated quickly once we hit a certain level of momentum. As your (happy) customer base grows your referral network increases exponentially, so you can be assured of a steady stream of new business.
When we sold in 2014 we were New Zealand's largest Domain registrar, with over 110,000 domains under management.
Right now, in 2016, we have zero.
With this blog I'll share with you our journey as we start all over again. We are new to the market and nobody knows we exist. There's no satisfied customers around the country singing our praises to their friends and associates, so we need to work very hard to create a service that people can trust and believe in.
I hope you'll follow us on part one of our journey as we go from zero to 500 Domains.
Let's make it official8 June, 2016. Domain Count 0/50
The first thing I did was decide on a name, which was the easy part as I'd already registered domainsdirect.nz some time ago when I was toying with the idea of getting back into the business. With that secure I registered the company, Domains Direct Limited, which being exceedingly easy in New Zealand, was all done in one day.
It's official, we have a business.
I've also set up a competition on 99designs.com to crowd-source a logo for US$299.
Why did we start a Domain business?9 June, 2016. Domain Count 0/50
When we first became a .nz registrar in 2003 (with Web Drive), wholesale pricing was much higher than it is today. From memory it was $24 per year. The office of the Domain Name Commissioner (DNC) would regularly conduct a wholesale price review, and on three separate occasions dropped the price $3 per year, to where it now sits at $15.
Despite their likely intention of passing on savings to retail customers, most registrars stayed put and simply reaped far greater profits. At the time, the two largest registrars were Domainz and Free Parking, who priced at $55 and $39, respectively.
The problem of course, is that by lowering fees, you're lowering your revenue, and that is not something anyone wants to see in their financials. We were also party to this conundrum, and at Web Drive we kept our retail price at $35 (though we did introduce bulk reseller discounts.)
As more discount players entered the market, such as Discount Domains and 1st Domains, we felt we were missing a big opportunity to capture customers who were simply looking for the best deal. So, we introduced the now popular Domains4Less, which offered services at a closer-to-wholesale rate.
Naturally, Domains4Less canabalised some of Web Drive's business, but the impact wasn't huge as for most people the $10 per year saving didn't justify managing services across two platforms.
All this leads us to now, where I believe registrars are still making big profits from Domain names and there is no real solid offering in the under-$20 market for .nz Domains.
Our vision is to offer a wholesale price guarantee, so you pay exactly what we pay per year for your Domain, which as of right now is $15 +gst per year. This gives you your Domain registration, and that's all. For an extra $2 per year you can attach your own nameservers for use with other service providers.
We have a logo!20 June, 2016 | Domain Count 0/50 | by Daniel Williams
We had 132 design entries for our logo competition on 99designs.com and I'm very happy with the final choice.
The landing page has flopped28 September, 2016. Domain Count 0/50
It's been two weeks since I set up our landing page inviting people to sign up to our mailing list for when we launch (which I published on the day our restraint of trade lifted) and sadly we've managed a grand total of 5 subscribers.
I definitely expected more interest, but I shouldn't be surprised. It is disappointing though because you always read about landing pages and beta invites generating thousands of subscribers, but I'm sure this is the exception, and not the rule.
I only promoted it to my friends on Facebook, so what did I expect? Can't really justify spending on Google ads just yet.
DNC declines our application to become a .nz registrar1 November, 2016. Domain Count 0/50
It's been over 2 months since we applied with the Domain Name Commissioner to become an authorised .nz registrar, and after many emails back and forth, we got the news today that our application has been declined.
The DNC has asked us to demonstrate operational experience (since our brand new company has none) by first operating as a reseller of another authorised registrar for a period of at least 3 months.
As I tried to keep my cool I politely asked for a list of registrars that offer reseller services, and got a generous helping of irony dished up, as top of their list was... Web Drive.
Now, the reason we started this business was because we felt that other registrars were charging too much, so our whole strategy was price-driven. Now, it seems we'll have to try and make this work by finding the reseller with the cheapest rates and a front-end we can tailor.
Australians to the rescue3 November, 2016. Domain Count 0/50
Looking at all the resellers, it appears Australia's own Crazy Domains will save the day. Their wholesale pricing gives us enough room to mostly meet our requirements, and while their front-end is not brilliant, it's a good start that we can work with. We used the same system when we launched Domains4Less in Australia, and it did the job.
So now instead of building our own system we'll need to invest some time in customising their portal.
Time to simplify1 December, 2016. Domain Count 0/50
My original price strategy was to offer registration at wholesale rates ($15 p/y) and then charge $2 per year to attach nameservers, but I've decided I need to KISS (keep it simple, stupid) which is always a philosophy I strive to maintain.
Ultimately, that's going to confuse the heck out of people, and I think it will probably be detrimental, as people will inevitably feel mislead on price (because no one reads the fine print!)
So instead of a wholesale price promise, we're going to go with a "same price promise." You see, many registrars offer an amazing deal on your registration, and then the following year the renewal price is bumped up, and since you can't be bothered to transfer, you pay the fee.
To us that's called a price trick (remember what I said about not reading the fine print?) So we're going to promise the same price on registration and renewals. $16.50 +gst per year, including setting your own nameservers.
Now that's nice and simple.
What about dot coms?4 December, 2016. Domain Count 0/50
We decided early on that our focus is soley on .nz Domains. New Zealand has, what I think is, the best registry in the world.
A single Domain password for transfers, no compulsory renewal on transfer, and everything happens in real-time.
The dot com space is just a nightmare, with auth codes, transfer statuses, renewal on payment, outgoing and incoming registrar approval; and not to mention, there's just no money in it. You can get a dot com from GoDaddy for almost free these days, and we can't compete with that.
The beauty of .nz is that we can largely automate everything; and that allows us to keep extremely low pricing, because there is not much human involvement once systems are working by themselves.
Also, while we're keeping things simple, we've decided to just stick with offering .co.nz, .net.nz, and .org.nz suffixes*. All other suffixes have very low registration rates, and I think it is just better to give customers a small number of options than confuse them with 10 different suffix choices.
Just look at these stats for March 2016. The 656,607 registered .nz Domains are made up of: .co.nz 73%, .nz 16%, .org.nz 4%, .net.nz 4%, with all other suffixes (12 total) making up 3%.
.kiwi.nz, which could have been an alternative to .co.nz makes up just 0.8% of total registrations. Pitiful.
You'll still be able to register and transfer the other suffixes, but on our front page we'll just focus on the aforementioned three.
* .nz is available as a registration option but the pricing is slightly higher at $20 +gst per year.
We got our first customer!7 December, 2016. Domain Count 1/50
We got our first customer - but we don't even have the website up! How did this happen?!
I noticed on our landing page there was a link to the work-in-progress site, which this customer obviously decided was good enough to start using to register his Domain.
I like to think this is a good sign that when we launch there should be strong interest.
We've finally launched20 January, 2017. Domain Count 1/50
After a few weeks of being merry, we finally launched the site today.
There was little fanfare. I don't think anybody noticed.
So are you ready to register or transfer your domain and enjoy annual pricing of just $16.50 +gst?
Time to pay for web traffic9 February, 2017. Domain Count 1/50
Nearly 3 weeks after launch we've yet to secure any new business. No registrations, no transfers. A bit of a downer, but it's to be expected, because a) nobody knows we exist; and b) people are busy.
Domains are one of those things are just a hassle to change - especially when you're only saving a few dollars a year. So we don't expect to get truckloads of transfers in overnight. The key now is to generate awareness of our service for NEW registrations. Then, once a customer is accustomed to our service, they'll start looking at moving over other Domains for bigger savings.
We barely even register on Google right now. A search for cheap nz domain names doesn't list us until page 7 of the results, so it's going to be a while before we see organic search traffic from people looking for domain registration in New Zealand (even more sad is that a search for domains direct nz doesn't show us until page 2!)
So it's time to try some paid ad placements to generate some traffic.
Naturally I would first turn to Google, but pricing is just crazy there. If I bid on the term cheap nz domain names I could easily pay $5 for a click; and since we're making no margin right now (thanks to our reseller pricing) it simply isn't economical (it's also worth noting that a click isn't necessarily going to turn into a registration, so you could be out a lot of dollars before you see a payment in.)
Facebook would seem the next logical place to try as ads are typically much cheaper there. I'm going to set up a campaign with a max budget of $5 per day, and see what happens...
The Facebook campaign was not a success13 February, 2017. Domain Count 1/50
After spending $20.95 over a few days our ad reached 4,473 Facebookers, which resulted in 35 clicks. Ordinarily I'd be pretty pleased with that result if some of those clicks had resulted in conversions, but our tally still stands at 1/50 Domains.
It would be at this point that one might ordinarily decide this game is too hard and pack it in. But I've been down this road a number of times now and I know how long it takes to gain traction.
Eventually registrations will start to trickle through. It may be just one Domain a week, but that will soon turn into two domains a week, then three, then one a day, then two a day, and so on and so forth. And then one day it will be 30 a day and I will remember back to this time when it was so hard to just get one single damn Domain!
For now I've put the campaign on hold, and I'll start focusing efforts on creating some useful content for the site as I think increasing our Google rank and generating organic traffic is going to be the long-term driver of new business.
Let's try Google Adwords15 February, 2017. Domain Count 1/50
Time to bring in the big guns. I'm going to have a crack at getting some success with Google. I've decided on a daily budget of $10, which at $300 a month is only expected to bring in 39-67 clicks. Very slim numbers but these will be people actually searching for Domain registration (or in our case "cheap domain names") so hopefully it translates into sales.
Our budget is at the very low end of what our competitors are spending, and I'm thinking that they are spending A LOT per customer acquisition, because at only $300 a month we're looking at between $4.48 and $7.69 per click.
Let's see if we can crank this 1/50 number up a few notches.
$56.14 spent on ads; no new customers17 February, 2017. Domain Count 1/50
I know that building a brand takes time and people need repetitive exposure before they buy, but this is becoming embarrassing. This week I've spent a lot of time working on website content, creating a resources section with useful articles about owning and managing a .nz Domain.
I've also now spent $56.14 on Google and Facebook ads with a total 12,678 views and 96 clicks. The conversion rate on these clicks is 0% because it's brought in no new business.
I used the website canva.com to create a new Facebook ad, and found it to be a really neat tool. I created this graphic through their web-based UI.
Not sure what to try next. We have a solid product, exceptional pricing, and most importantly, experience. I think our biggest obstacle to overcome is visibility, as so long as we're on page 7 of Google for our search terms we'll remain unknown to people looking for what we offer. So it's on with the content creation and SEO.
Content, content, content...21 February, 2017. Domain Count 1/50
So we're still at 1 Domain. Very sad. But I've started adding content to the site to make it a bit more authoritative, including articles like Free email services are damaging trust in small business. I paid $20 to boost the post on Facebook which reached 625 people and got 18 likes. A little short of the 3,000 people Facebook suggested the post would reach.
I've also just invited a bunch of Facebook friends to like the Domains Direct page, so hopefully getting in front of people on a regular basis with useful articles on .nz Domains will keep reminding them that we exist. Then when someone asks them where to register a Domain they'll remember to say "at Domains Direct! It's just $16.50 +gst per year."
On the social media front I've chucked up links to our Facebook and Twitter pages in the site's footer, so I need to spend some time on Twitter to build an audience.
Lastly, we're still not really showing up in Google. A search for domains direct nz doesn't even show us on the first page on results. And we're still on page 7 of the results for cheap nz domains. Hoping that our content might start bumping us up soon. Might also need to start looking at some link building.
Moving up the ranks2 March, 2017. Domain Count 1/50
We're still yet to gain any more customers, but the content strategy appears to be paying off as we've moved from page 7 to page 6 of Google's results for cheap nz domains. We also now register on the first page of results for domains direct nz.
We've also finally shown up on Alexa with a rank of 22,763,327.
Last week I got in touch with an old customer of mine from Web Drive days and asked if he'd be interested in switching over his portfolio. Since we'd be matching his current pricing I offered to design him a new business logo and build a new website for free, as his is looking a bit dated. He's going to come back to me. If I can get his business it will be a few hundred Domain names.
I might need to try and remember some of our other reseller customers and see if they'd be interested in moving over to us.
I know that one day I'm going to login to my dashboard and that number "1" I've been seeing for so many weeks now is going to say "2" and it will be the best day.
If you build it, why don't they come?9 March, 2017. Domain Count 1/50
I'll be sounding like a broken record now, but... still no customers. So I tried something different this week.
As I've been regularly checking where we appear in Google results for our key phrase I noticed a few very very old forum pages high up in the ranks.
What is the cheapest place to register a .co.nz domain? - PC World
Best place to get hosting/domain name? - Gameplanet Forums
Cheapest Domain Name Registrars in New Zealand
I found that while these pages ranked highly, the information in them was really out of date, so I made it my duty to enlighten future readers with an update on .nz pricing in 2017.
But how do you do this without looking like a spammer and getting your comment removed?
Easy... add a disclaimer. So long as you're being upfront about your agenda, the posts should be approved. Case in point, the following posts were all approved by moderators.
The second post above garnered some attention pretty quickly, with a response from a potential customer.
"Do you guys offer a free DNS service? it seems you do, if so, ill move!" (sic)
I told him to contact me directly and I'll help him get switched over, but this is usually where you lose them. When it comes to the crunch, transferring a Domain often goes in the too-hard basket, so I'm not holding my breath on this one. BUT, we might see a new customer by the end of the week. Joy!
The day has finally arrived... a customer!23 March, 2017. Domain Count 1/50
It was worth the wait. Today I logged in to find 2 pending domain registrations... BUT, all was not without a hitch.
Conveniently, this customer was flagged by Crazy Domains (our wholesale provider) for "payment verification" which means they have to supply a scan of their credit card and driver's license.
So the customer emailed asking why they'd been asked for this, and all I can do is apologise and ask them to provide the required documents. Crazy were no help. The standard response was "we will process the registrations when we receive the scans."
So for now, the Domain count remains at 1/50. I'm going to make the assumption that this will simply put off the customer and they'll just go elsewhere, and avoid the hassle.
Taking one for the team24 March, 2017. Domain Count 3/50
So customer number 1 did not respond to the request for proof of identity, and since it would be too painful to lose this customer I put new registrations through, which we paid for ourselves.
I was tempted to provide our bank account number to pay a direct credit, but I think I am going to let this one slide.
A little goodwill goes a long way, and I'm happy the tally has moved up from 1!
News roundup5 April, 2017. Domain Count 5/50
It's been a busy few weeks. Today we launched our new website, which is now fully-responsive and has been coded by hand, so Google should appreciate our error-free HTML.
We've had another two Domains registered, so we're officially at 5 now.
We're moving up the Google ranks and now appear on page 4 of the results for cheap nz domains. A month ago I reported we were on page 6.
We've purchased an SSL certificate and will make the whole site run on https, for extra credibility, and because I understand Google gives extra weight to sites running on SSL.
Checking our keywords7 April, 2017. Domain Count 5/50
I've been so focused on our key term cheap nz domains that I was aghast to find today that a search for nz domain names yielded zero visibility for Domains Direct.
It seems all my copy is just Domains with little mention of Domain Names, so I've made some changes to page titles and now I'll do a bit more research on the most popular search terms.
I'm hoping this small tweak will send some more traffic our way.
The counter is climbing!11 April, 2017. Domain Count 26/50
We are definitely making some progress now as the Domain counter has climbed to 26.
I've been thinking about spending some money on Facebook/Google ads, but with a near-zero margin there's really no room for it, so we're just going to have to rely on word-of-mouth.
Please tell your friends - .nz Domain Names just $16.50 +gst per year!
All eggs in one basket24 April, 2017. Domain Count 29/50
It has been a slow couple of weeks. The Domain count has only increased by 3 to 29, and I thought it was a good time to be fully transparent on the numbers, as I felt like the last post might be suggesting things were taking off, when they're not really.
You see, the spike in numbers has come from just one customer; an old customer of ours from Web Drive who was a Domain reseller. I messaged him to ask how he came across Domains Direct and said he'd been searching for cheap nz domains and after reading this blog he wanted to support our new business.
Of course, I'm really grateful for his support and new business, but we're talking about 20-odd Domains from just one customer, and in order to gain real traction, we need to be gaining new customers on a regular basis, which so far, is not happening.
Still, we are climbing the Google ranks slowly, and I'm banking on the fact that good content will push us further up until an eventual page 1 result, and that's when we will see real results.
I've got some more content which I'll be adding soon, so I'll be looking forward to seeing how this affects our visibility.
The Adwords experiment: Part deux28 April, 2017. Domain Count 32/50
Adwords can get pretty expensive if you're selling low-margin items in a highly-competitive environment. I know some of our competitors spent a fortune on Adwords each month, and usually as a loss-leader for other services, like web design and hosting.
This week I thought I'd do an experiment to see how effective an Adwords campaign would be. I set a budget of $100 for one day with a max. cost-per-click of $5 and set keywords for domain registration etc. and here were the results:
At an average CPC of $3.63 we had 27 clicks over 1,685 impressions, which ultimately resulted in one domain registration.
Obviously this is simply not sustainable, and I'm sure myriad other advertisers have felt the same way when crunching the numbers.
So for now, paid advertising is not the way forward, as I really want this to be a self-sustaining business from day one, and not a money pit.
The good news is we continue to move up the Google rankings, so if we can land on that first page of results I'm confident that will be all we need to start generating regular daily business.
Banned form Geekzone8 May, 2017. Domain Count 32/50
It has been a very slow week, and since our Adwords experiment there's been no increase in new business.
Last week I posted to the Geekzone Startup forum to introduce Domains Direct and its pricing. I followed similar posts from Domainia and Octopoly as I didn't want to do anything that might consistute spammaing.
Regrettably, Mauricio deleted my post and emailed me to say I was blatantly spamming. I replied that my post was no different from this similar post from 4 years ago. He then replied that he's deleted that post as well.
So, Ok, I'm happy to play by the rules, so instead I posted a new topic about this very blog and our startup journey.
Within a few hours this post was also deleted and my account disabled. Meanwhile, Octopoly's post remains.
This post probably sounds like sour grapes, but what's up with these double standards?
Banned form Geekzone (again)11 May, 2017. Domain Count 32/50
So after last week's banning from Geekzone I registered a new account with the intention of being extra-cautious when posting on forums, so as not to upset any admins, however within a matter of hours, this account was also disabled. I guess my name now has a red flag against it. Nevermind, we will continue on without the Geekzone audience.
So yesterday I spoke with an SEO consultant and we talked about our visibility in Google etc. His suggestion was Google and Facebook ads, but I explained that our margins are too thin to justify them long-term, especially given you can be paying up to $10 per click. His next suggestion was to bundle Domain names with hosting; but I don't want to do hosting - yet. He also suggested re-thinking our strategy, but that's not really an option either, as the reason we're in this business is to bring prices down.
Ultimately, he said, we're a new player and we're competing against 10-plus-year-old established players - which of course I realise and appreciate as we simply don't have the credibility as far as Google is concerned, to put us on page 1 of the results.
I watched a lecture video from Dustin Moskovitz (co-founder of Facebook) yesterday who said that paying for ads is the laziest growth strategy, and I tend to agree! Nevertheless I might do one more Facebook experiment to try and increase likes on our page so we can push our blog content out to users.
I'm meeting another SEO company today for a free consultation and I'll be interested to hear what suggestions he has to get our Google rank higher.
Links! links! links!17 May, 2017. Domain Count 33/50
After my chat with a PureSEO consultant I got to work on some serious SEO. His two tips for great SEO were:
- Clean HTML and fast-loading content
- Link building, starting with easy wins like Instagram, Pinterest pages etc.
With the clean and fast-loading content already sorted I thought it a great idea to create some backlinks from big-traffic websites. I was actually surprised at myself that I hadn't already done this, especially on local directories like Finda, Yellow, and Localist.
Rather than a flood of social media icons in the footer I decided to make a links page that lists them all.
If you're unfamiliar with the reasoning behind all this, the basis for Google's search ranking is a method called PageRank.
We'll take the NZ Herald website as an example. This is a top New Zealand website that gets a lot of traffic - a LOT. Given all this traffic, Google considers it an "authoritative source" of information, and assigns it a high PageRank (between 1 and 10). If the NZ Herald, with its high page rank, wrote an article on Domains Direct and linked to our website, Google would consider this a vote of credibility, and this would greatly affect our PageRank (there are about 200 different criteria Google uses to rank pages, but PageRank was the original.)
So with a bunch of profile pages created, I've now linked to Domains Direct from some of the web's top 10 websites. It will be interesting to see what effect this has, if any!
Defining keywords for intent, not information19 May, 2017. Domain Count 33/50
This week I spent some time using Google's Keyword Planner to define a small set of keywords to focus on.
My first list looked like this:
The list looked pretty good until I realised that there wasn't enough commercial intent in the words. For example, if we ranked highly for lookup this would result in lots of traffic for people wanting to lookup Domain holder details, but they wouldn't necessarily be buying a Domain. So I compiled a new list to make sure we rank highly for people who know they want a Domain and are ready to purchase.
Now the list looks like this:
The keywords are now much more focused on buyers as I'd rather get less traffic but more sales, than the other way around. It's the difference between asking Google how to register a domain versus where to register a domain. One query is for information, the other is for action.
A cold-calling experiment22 May, 2017. Domain Count 34/50
First the good news - we're now on page 2 of Google (up from our original page 7) and we're still climbing, albeit slowly, but I'm confident that in the next 4-8 weeks we'll have broken into page 1.
So last week I decided it was time stop waiting for customers to come to us and hit the (virtual) pavement. I crafted a friendly, non-selling email and sent it out to 15 web designers:
My intention was to create some warm leads by making the conversation all about them, and for the most part, it worked pretty well, with 6 replies (40% response rate.)
Mostly the replies were "we're using Web Drive and it's not great, but it works", so faced with the prospect of having to reply "Yes, sorry, I built that system" I saw it as a positive opportunity that looked like this:
So I think there is a huge opportunity to cater to the reseller market, but of course our hands are tied right now until the DNC decides (if at all) to authorise us as a registrar.
Going the distance, going for speed24 May, 2017. Domain Count 34/50
I thought it would be worthwhile making sure our site is loading as fast as possible, so I tried some online tools and was really surprised at what room I had for improvement. I started with a site called GTmetrix who let you enter your URL and they check all sorts of stuff on your site, including optimisation of images, use of browser caching, minification of code etc.
On my first run these were my results:
Not great, with a front page load time of 4.3 seconds. I then spent probably 2 hours going through their checklist of items, which they score out of 100, and tweaking all aspects of the images, code, and included files, and then managed to get this load time down to 2.5 seconds.
So why does this matter? Well, I'm determined to get to page 1 on Google, and Google loves pages that are fast and free of errors, so it's really important to invest the time to get all these things right.
Almost on page 1 of Google12 June, 2017. Domain Count 49/50
So the Domain counter is up, but only by a couple of customers who brought a few Domains over. Very happy nonetheless.
We've been hovering at the top half of page 2 on Google, often only one result away from breaking onto page 1. I can't wait to see what impact getting to page 1 will have.
Here's a snapshot of our Analytics since February 1.
On to Part 2 of our Journey