How Microryza Acquired the Domain Experiment.com | Hacker News Reader

How Microryza Acquired the Domain Experiment.com

priceonomics.com

138 pointsirollboozers87 comments

"The broker would help them find the owners of domain names, negotiate the price, and handle the transaction in exchange for a 10-15% commission of the price of the domain."

The incentives there seem misaligned to me. The person negotiating the price for them gets paid a higher commission if the price ends up being higher?

Good system I've seen for domain buying is this: You set price you'll pay. Broker decides to take job. They negotiate a price that equal to or lower than your cap. They get fixed fee plus X% of difference between price paid and max price you'd be willing to pay.

I've always wondered why this isn't the way real estate agents work.

There are some complications to the implementation of this system. If you choose to incentivize the Realtor to stay below a specific budget, the Realtor might start steering you to cheaper units (re: smaller, shabbier, poor neighborhoods) in order to get a bigger commission. If you base the commission on the discount negotiated off the list price of a home, you may push the Realtor into low balling offers and not closing deals (not to mention, in many markets, homes sell for over list price).

Probably the best method would be too use a flat fee, or a percentage of list, and then add bonus commissions for performance in negotiations, using the average 'over/under asking price' in the local market as an index. But this is probably too complicated for most people, and at the end of the day, the Realtor is more concerned about the volume of deals they can close rather than the individual deals, so performance based commissions will still probably have minimal impact on behavior.

> If you base the commission on the discount negotiated off the list price of a home, you may push the Realtor into low balling offers and not closing deals [...].

That's not too bad an incentive, because all other incentives lead to them closing more often than you'd like.

It might make more sense when negotiating with a selling agent rather than a buying agent.

Because most real estate purchasers aren't sophisticated enough to manage their end of a deal like that well.

Unless the US market is very different, I thought it was pretty obvious that the sellers/landlords are the real estate agent's customers and the stream of prospective buyers are the product...

It's different in the US. Buyers and sellers both have agents. They split the commission when a sale goes through. In some cases they end up being the same person (e.g. if an individual approaches the buyer's agent directly).

(I do this and work buying domains for people.)

There is a problem with that.

That system only works in the case of names that you don't care if you get or not. In the case of a domain that you really need (and most buyers that I've dealt with really want the name or names they have decided on) you run the risk of pissing off the seller and having him play all sorts of games that can result in paying more or deciding to not sell at all. The broker stands less to lose than the buyer does. They only lose their commission but a deal screwed up means you don't get your domain name.

But most importantly an incentive like that assumes that every seller is the same and can be manipulated with effort. I can assure you that is not the case.

These are all good points I hadn't thought of. It's clear you have a lot of experience in this--what have you found to be the best structure?

I do this for a living. You are correct. The way I work is a fixed fee in advanced based on rough estimates of the final value of the domain. Consequently I get paid the same but I'm incentivized to purchase as cheaply as possible in order to get referral business (but not at the expense of making money).

They also talk about setting a budget. It's easy to imagine schemes where there is a fixed fee plus a percentage of the part of the budget that is saved.

Works excellent for NY real estate brokers.

You are right it seems a little odd. Seems to always work in the sellers favour.

Like buying a house, no?

For a house it's 2-5%. At this Rate, it's usually better for the broker to just close the sale whether it's $400k or $500k.

This was an example in Freakanomics Vol 1 I believe.

That's the American housing market, I believe.

> Sure, they got a little lucky because they connected with a domain owner that shared their vision for science.

The fact that the domain wasn't sold since 1996, even when there were better offers from domain flippers during the time, suggests that luck played a much larger role than the statement implies

"even when there were better offers from domain flippers during the time"

It's quite common in the domain business to claim that you have offers that you have turned down. I would take that with a grain of salt. By the way while it is possible that the seller was telling the truth I have been in this business for a long long time. Most likely it was merely posturing. And for the record nobody flips domains quickly. It can take years and years.

(Also I strongly agree with the luck assessment..)

> [...] but their budget was $12-15K [...]

> ....

> After weeks of gentle negotiating, they came to an agreement: $54K in cash for the domain.

Yikes. That's 3.6x the max budget they were hoping to spend. I really do hope that in the long run it pays off.

It's a strong-enough name to be considered an asset. Worst-case ... just resell it.

I doubt anyone with a semblance of a conscience in their shoes could do that, except back to the benefactor, for cheaper (which would also be pretty lame)...the man turned down 6 figure offers and gave it to them because he believed in their mission. That they would go "whoops, it cost too much, gonna sell it to whoever offers me the most while we bail from our failed startup" would make the benefactor feel like total shit. I would never do that to a guy. I'd probably go work a 9-5 for a year and keep the domain for my next stab at a dream in the space.

The original owner could have added the right to buy the domain back from the new owners at a fixed cost should they wish to sell it in the future (or right of first refusal, etc) if he was worried about that.

I worked for a start-up that acquired a smaller company (complete with an awesome name) for cash/shares. Smaller company supposedly had a clause in their contract saying they could buy the company back for £1 should the new owner run out of money. Fast forward 2 years: parent company failed and smaller company carried on...

Wow, that seems like a dangerous perverse incentive to me, if the founders kept working for the parent company after the acquisition.

Yes, the smaller guys never really integrated themselves with the rest of the team and were pretty smug about the whole situation all when the parent company started to go down.

I'm not a lawyer, but I believe a semblance of conscience is sadly not allowed for in a bankruptcy. If the Experiment.com people, like most startups, fail to make it, then I'd think they're by default obligated to get the best price possible for the assets. I think doing anything else (e.g., giving a company asset to a founder) would require a founder to agree.

Like goatforce suggests, I would have made sure the deal includes a buyback clause. I'd do that even as a founder, because a) it's the right thing to do in this case, and b) it would let me negotiate a lower price because I'm not making the guy give up his 15-year dream of making sure it is used for something good.

Sorry, total fail in that first paragraph, and I missed the edit window. I should have said: I think doing anything else (e.g., giving a company asset to a founder) would require all investors to agree.

Or rather, all creditors?

Yeah in a bankruptcy, definitely. I was thinking back to my last company, which we wound down in an orderly fashion, so only the shareholders mattered. But I definitely said bankruptcy, where it's creditors (and, I suppose, the judge who approves the settlement) who matter.

Original domain owner here.

I certainly hummed and hawed about attaching clauses to the sale, but feared they would make the transfer overly complex.

It was better for me to err on the side of being zen about it. A big driver was the feeling I got from the microryza team.

They're the real deal and they are going to be able to do very well by this name.

I told them during negotiations that what I'm most interested in is their succeeding so that they don't need to enter into the domain name speculation business, because they would be very very sad.

I will mention, though, as part of this story, that I was once approached by someone who wanted to use the domain name for a sex toys store. And while that's reasonably noble, I was comparing at the time to my own aspirations for the name in the realm of pure science.

You'd work 9-5 for a year to keep a semi-valuable domain name, currently "valued" at $54k, for some future potential pipe-dream of using that name in another startup where the name is equally relevant?

"the man turned down 6 figure offers"

I'm in this business. It's quite common to claim things like that. And being offered a sum of money and actually closing a deal are two different things anyway.

That said they did get a good number on the domain and it is possible that the seller did get offers for 6 figures. But the fact that he said that really means nothing as there is no way to verify that. It's a negotiating technique.

They have started accepting Dogecoins:

https://experiment.com/dogecoin

It's actually pretty interesting to see these donations come in. No one would ever give $0.0001 to a crowdfunding campaign but we're seeing a lot of micro donations on the scale of 10-20 doges.

The reason is that small donations either don't exist in USD (sub penny) or get eaten up in fees with the payment processor.

Last i checked, doge transfers are 1-2 dogecoin for most transactions.

As far as I can see, they don't accept bitcoins. Hah!

All domains should really cost $1000/year from the registrar at a minimum to stop this idiotic "I'll buy thousands of them and sit on them forever until someone offers me enough for one of them to make the whole enterprise worth it".

Expensive domain registration would make it cost prohibitive for average people to start a website. The better thing to limit is how many domains you can own, or at least how many domains you can park.

Limiting number of domain registrations per-person probably won't work, because one can get thousands of sockpuppet "shareholders", each having registered a sole domain.

And parking domains is indistinguishable from using them. Unless under "parking" you mean explicitly stating this domain is for sale. But with imposed restriction squatters will just remove those and park domains with "this domain is... well, you get the idea".

Treat domains like a trademark registration. You have x amount of time to show that you're actually using it for something. And that something has some kind of value.

There's issues with what's considered value, but our existing system is nonsense.

So what happens when you have internal domains?

If it's 100% internal, you don't need to register them. If it's internet-facing but designed for use by registered users only, it'll still have some sort of authentication page, which should be enough proof that you're using it for something.

I agree that $1000/yr would be too high for your average person but I think raising it to $100/yr should be reasonable enough and would still solve a lot of the squatting issues.

What about those who live in developing countries? Should they be excluded from owning domains?

Not all TLDs have to be priced the same. .com could be $250/yr and .biz could be $8/yr.

So the average person can no longer afford to have a website on a domain they own? That sounds much worse to me.

Would it be possible to ban the re-sale of domain registrations? This way squatting would only be done for trademark protection. I could see issues where bigger companies buy up all the related domain names to their specific industry, in the hopes of hindering future competition. Without re-sellers, that tactic would be easier, but it still might be better then the current system.

There are much better auction systems and property tax systems than this.

Land should be priced the same way! There are lots of places I'd like to build a new home, but people own the land and aren't using it.

I like the Experiment.com brand name so much better, as cool and quirky as Microryza was. Congrats on a good find and sane price!

Mycorrhizae are pretty darn cool. Two kingdoms of life abandoning a history of distrust to form an intimate partnership and solve a Hard Problem. It's symbolic.

http://en.wikipedia.org/wiki/Arbuscular_mycorrhiza

"experiment.com" sacrifices the neat science and the symbolism. The only appeal I see is utilitarian. Given their difficulties with "Microryza," I understand that this is enough to motivate the change, but it seems like the opposite of cool and quirky.

Huh, I hadn't made the connection to mycorrhizae. I just read microryza as straightforward micro-ryza, "small root", with a meaning of building up science from small contributions. A pun on myco (fungus) vs. micro (small) totally went over my head, if that was the intent...

Am I the only one that likes the name Ryza more than Experiment? Experiment just sounds so bland to me and will be harder to rank high with.

I’m with you. It’s a better name and can really be called a brand name in that it only denotes the company and otherwise has no other meaning. That uniqueness means no competition in search results, as you point out.

Unique-er, shorter, has a cultural history with the company, evokes “Rise”.

Keep in mind that brands really become signifiers of the company, and have little meaning of their own over time. Beatles, Google, Radiohead, Amazon. All either bad or meaningless on their own.

Rank high for what? The term Ryza? It's easy to rank high for a made up word, but if you're ever in debate over whether to use a domain with ambiguous spelling or a standard word...go with the standard word.

Yes - rank high for Ryza vs Experiment. It's pretty bad if you aren't the first result when someone googles your company's name especially for a company relying on word of mouth.

Looking at the SERP for "experiment", I actually don't see them having much trouble ranking for it after a bit of time has gone by. Most of the results are informative and they're spread across different sectors (There isn't a heavy commercial influence in the SERPs).

Just look at Box.com...they rank for "box" now, for the same reasons experiment.com will eventually come to rank for "experiment" so long as they nail the basics for SEO.

I agree. (original domain owner).

If ranking for that term is important to the experiment.com business model, I'm sure they'll be able to do it.

The very first paragraph of the article puts the lie to that, doesn't it?

I actually like Cofactor best. It basically screams science crowdfunding and is noticeably less generic than Experiment and highly spellable unlike Microryza.

"The founders conferred. They were prepared to settle for Ryza.com, but suddenly Experiment.com was available. That’s like being engaged to a high school boyfriend only to learn that Brad Pitt is interested in dating you. Never in their wildest dreams did they consider that they could get a domain like that. What to do?"

Stick with the person you love, right. Yeah, tell Brad Pitt to take a hike. Yep, that's definitely the right thing to do. Aww, high school sweethearts. That's lovely. What a nice story.

Oh. Wait. Huh? you dumped high school sweetheart for that wally off of the Chanel ads?

Sigh, I suppose it was... "inevitable" (http://youtu.be/mGs4CjeJiJQ)

I probably wouldn't have chosen the name "Experiment." They won't be able to trademark that, because it's descriptive.

I think Ryza was the better choice.

Ryza has real issues with transcription. Riser? Riza? Raiza? Ricea? Rysa? Raitser? Because it's totally arbitrary, there's also trouble getting people to associate the word with what you do. And I think both of those lead to issues with retention.

In their shoes, I would have gone with something that was suggestive but not purely descriptive. For example, Kickstarter is a great name, and Indiegogo is pretty good too.

That said, naming a company a fucking nightmare, and as far as I'm concerned, anybody who has gone through it without gnawing a limb off or calling their company Drgnblv did well.

They can trademark "Experiment.com", but if they really had a shot at a pronounceable four-letter domain name, that seems like a no-brainer.

From the article:

   It was just settling for a domain choice. In 40 years, 
   when I told my grandkids what I did, I shuddered at the 
   idea of telling them I worked at a company called ‘Ryza’.

Um, Denny, it's your job to make the name mean something. Why do you think your company was initially confused with Zynga?

They own Ryza.com as well.

I'm actually just about to go through the process of acquiring a somewhat recently dropped domain from BuyDomains.com for my new project. The current asking price for the domain is around $4,000 on their site.

Anyone worked with them before? I'm prepared to negotiate with them but also want to make sure I don't shoot myself in the foot and cause them to raise the price on me. I would ideally like to not spend more than $2k but the domain is really perfect for my project so if we have to bite the bullet then we will...

EDIT: To add more context here, I have purchased the getPROJECTNAME.com and PROJECTNAMEapp.com domains for normal registrar prices. PROJECTNAME.io is also available for the normal price of about $60/yr. So it's not a make or break situation, but since we're in stealth mode for at least another 5 months, I don't want to launch and then all of a sudden face a $40,000 domain acquisition situation rather than a $4,000 one.

I have bought domains from them in the past.

I would start off by offering half (as a maximum, less if you can) and sticking to the offer. The thing to remember is that they may have acquired the domain for registration price so even $2000 will be a large profit, and they may not have another buyer for years.

If that goes nowhere, you can always go back later and pay the full price or whatever they have come down to.

IIRC, they also sell domains which they don't own, and have less leeway for negotiation on those.

Awesome, thanks for the reply. Do you know of any way to find out if they're brokering the domain for someone or selling it themselves?

If you make a low enough offer that they can't accept, they will tell you and they have told me in the past that its because its below the sellers reserve. Whois may also give you a clue as to who owns the domain.

They have fairly decent margins for discounts - I used to get marketing emails offering 20%+ off prices in the past.

Just look at the whois. If the admin email is brokerage@buydomains.com, they own it.

Timing with them also can matter. Their sales people have quotas and goals for the month. You may get a better price towards the end of the month vs the beginning.

Neat story. Were there any provisions should Microryza go out of business? Not a lawyer, but seems that org would be legally compelled to flip the domain for a price much higher than 54k, which could lead to the domain being used for something not 'nobel' as the seller intended.

Experiment.com is not even on the first page of Google results when I search for "experiment". This can't be good for their traffic.

Given that the company relies on word of mouth marketing, the move makes a lot of sense. 'Experiment' is a fantastic name.

My only concern is that such a generic term negatively affects findability. E.g., it makes brand monitoring or web-searching very hard. You won't rise above the noise.

You could address the findability problem by adding a unique token to the name (e.g., 'Experiment42').

Actually, I am curious if such generic name is a good choice.

You need to tell people that you use Experiment the Crowdsourcing Website, not experiment with crowdsourcing or use your experiment to crowdsource funds. And the same for googling.

(And BTW I really liked Microryza; I do know that it may be hard to spell (still easier than mycorrhizae), but Ryza sounds nice too!)

And an anecdote: when I was mailing with Cindy Woo almost a year ago, I joked about the tagline:

Mic[r]oryza

Mycorrhizae spelled in the sane way

don't worry the name microryza will live on http://www.yelp.com/biz/microryza-coffee-roasters-san-franci...

I am definitely visiting this place, when the next time in SF!

In my view Premium keyword.com domains are best for services with not much frequent usage (like freecreditreport.com). For servces with repeat usage brand names are better, thus facebook and amazon are better names than socialnetwork.com or buy.com.

So by that logic i think Cofactor.com is a much better choice than the more generic Experiement.com

All in the name of science. :)

I agree.

(I'm the original owner that sold the domain.)

I'm sorry for not having won the web for the google search on 'experiment', but I actually believe that this team is going to succeed where I have not.

I believe they are on the right track, and that they can grow into a variety of spaces/tools/utilities/education/information systems etc., especially if, as they have done so far, they "stay true" and focus on the bits that make for high quality investigations.

So this is just another Kickstarter clone which happens to have a great domain name?

article doesn't seem to mention it, but i wonder if the previous owner took some equity or options in the venture.

Author of the article here. No, it was a straight-up cash purchase with no equity involved.

Yeah. (original domain owner here).

I really struggled on this point, but was coached by someone I trust that legal gymnastics were not in anyone's best interest.

What I really want is for experiment.com to become wildly successful, so that I can take part in some science projects.

muryza.com

And use the savings to fill out a true, full rebrand

Muryza, fuck yeah ?

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