Grasping Opportunities #2: How I Turned $2.3K Into $16.5K

September 2, 2010 Posted by Tyler Cruz

Many of you may remember how I brokered a domain name a few years ago by selling it for $200,000, receiving a $20,000 referral cut. I wrote about how I was able to do that only because I took advantage of an opportunity.

This morning I accepted an envelope from FedEx. In it was a cheque for $14,864.60 from Escrow.com, which is $15,000 minus their fees.

I earned this cheque the exact same way I earned the other one – by grasping an opportunity. In this post I will share with you exactly how I turned a $2,000 investment into over $15,000. But more importantly, I will teach you through example the importance of taking advantage of opportunities when they pass your way.

1

The Acquisitions

On May 19th, 2007, Blizzard announced that they were going to make a sequel to their popular game Starcraft. For years, people speculated that a Starcraft 2 might be in the works, but after 9 years of waiting with still no word or hint from Blizzard of actually doing so, people started to give up hope.

So when they announced that Starcraft 2 was officially in the works, Starcraft fans around the world (me being one of them) were hysterical. I published a blog post as soon as I learned about the announcement and how I immediately went to purchase some Starcraft and Starcraft 2 domain names.

Now, while I managed to get my hands on a dozen or so Starcraft domain names simply by paying the registration fees, since the game was so popular and people were already anticipating and waiting for Starcraft 2 before the official announcement, the domains Starcraft2.net and SC2.net were already taken.

I really wanted a good Starcraft 2 domain though, and I knew that I had to move fast because if I didn’t, there would be others like me who would be contacting the owners and making them offers.

For the Starcraft2.net domain, I acquired the domain after a few back and forth e-mail exchanges. At first, the owner, a teenager around 17 or 18 or so, didn’t want to sell it. He was too set on developing the site into a fan site. He did show some weakness interest in my offers, but finally said that he wasn’t interested in selling it.

The next day he e-mailed me back basically saying that he might be interested in selling it after all, but it would have to be $1,000. I guess he thought that number was high :) I agreed right away and sent him the money via PayPal immediately. He seemed overjoyed to have actually received $1,000 (I guess he thought it was too good to be true or that I wouldn’t really pay or something) and was very happy with the sale. So was I. Maybe he should have read my post on The Art of Negotiation :-)

4

For SC2.net, I believe I e-mailed the owner but he wanted to talk to me through the phone.

Now, I’m actually a pretty shy guy and usually prefer to use E-mail or instant messengers rather then the phone, especially when it comes to business. This is partly because I’m too nice on the phone and in person and often tend to make poor deals, give too much information, and just generally become too soft. I’m hard as stone online but just way too nice on the phone and in person.

But I already acquired the Starcraft2.net domain and I knew that SC2.net would be the perfect domain pair for it, so I prepared myself and phoned him.

He actually turned out to be some government official who worked at the South African Honorary Consulate and was very nice. I ended up mailing him a cheque because he had some issue with his PayPal account, and a week later I also owned SC2.net.

It was good that I moved fast not only to block out other bids, but to prevent their knowledge of the value of the domain. My thinking appears to have been correct because when I spoke to the owner of SC2.net, I found out that he only bought it because it was a short domain name – not from any relation to Starcraft 2. If I had waited longer to contact him, it is likely that other interested buyers would have contacted him and tipped him off that it was actually a great domain for Starcraft 2.

It’s funny, because as I look over my old blog post about that acquisition, I wrote:

“It will take about a week before it’s in my hands though due to the escrow process. Ugh, I paid a lot for the domain. Exactly how much, I won’t say, at least not yet. Help calm me down by saying it’s a good domain please :)

I paid $653.37 (I believe the weird amount was due to the US/CDN exchange rate based on our original deal) for it, which right now seems like a steal, but I guess I can see my apprehension at the time.

The Development

I didn’t do much in terms of developing Starcraft2.net due to being so busy with other project, but I did know that I wanted to put up a forum to at least do something with it’s traffic.

I can’t remember the exact amount I spent on developing the site, but I believe I paid around $135 for the vBulletin license (I get good “bulk” discounts since I own so many licenses), a few hundred for the skin, and around $150 for a vBSEO license.

When you add up everything, including the other dozen or so Starcraft domains I bought, I invested roughly $2,300.

The Sales

First, I made roughly $900 by selling private ads and running AdSense on the site. That isn’t much over a span of 3 years, but that more than covered for paying for everything minus the Starcraft2.net and SC2.net domains.

I also sold a few of the domains I bought at the registration fee rate ($7 each per year or so). I sold StarcraftHelp.com for $400 and Starcraft-Forums.com for $300, but since I used Sedo to sell those two, I only made a total of $600 since Sedo takes enormous fees. But I only spent around $40 for those 2 domains (I usually register domains for multiple years) to make $600, so they were a good investment. 10

I can’t remember for certain, but I also think I sold at least one other domain through NamePros and/or DNForum as well.

And then, we come to the rest of the package.

On July 25th, 2010, I created a public auction on Flippa for a package sale which included Starcraft2.net, SC2.net and the remaining domains, which were:

  • StarcraftForums.info
  • StarcraftForums.net
  • StarcraftForum.net
  • StarcraftForum.org 
  • StarcraftForum.info 
  • StarcraftTips.com
  • StarcraftCheats.net 
  • StarcraftBoards.com

What makes that date interesting is that it was 2 days before the official release date of Starcraft 2.

I didn’t want to put the domains up for sale any sooner because I know that buyers (especially on Flippa) usually tend to live in the moment and don’t look at the long term or to the future. I’m pretty sure that if I had put the domains and site up for sale in 2009, for example, that there would be only a fraction of the interest that there would be around the release date.

The other thing about my timing of the auction listing was that I put the site up for sale at its absolute peak. This is actually a type of business strategy that Paul Piotrowski and I are starting to think about more, and is probably what I will end up doing with RobotWarz.

Traffic started to really skyrocket as the launch date neared. In fact, Starcraft2.net’s traffic used to average 100 unique visits a day, but on the launch date it had climbed to an enormous peak of 1,800 uniques a day! This was all purely from natural, unpaid SEO rankings (for “starcraft2” and “starcraft 2” mainly.

5

In fact, I forget who it was that told me, but at one point around that time there was a Starcraft 2 related query (something like “Starcraft 2 review") that was actually the 16th or so most searched keyword on Google (during the past hour).

After the release, the traffic predictably died down, but did still average at 400 uniques a day a month later which is still 4 times what it used to be.

It ended up selling for $15,000, which was also my reserve price, and I had the buyer pay the 5% buyer success fee, which would have been $750 but is capped at $500.

We did the transaction through Escrow.com which I love because they take a very realistic fee (0.89% for transactions $25K+), and the deal is now done. I don’t know why the new owners haven’t put the site up yet… I might give them a call to see if they’re having an issue importing the CPanel backup.

We both agreed to split the Escrow fees, and I also paid for a FedEx express delivery of my cheque. After the fees, my cheque came out to $14,864.60.

When you add everything up, I made a total of approximately $16,500 from all my Starcraft 2 investments. I spent approximately $2,300 which means that I ended up netting $14,200.

Sure, it took 3 years of waiting, but it’s not like I was working on the site or anything. I bought the domains after hearing that Starcraft 2 was officially announced, set up a basic forum, and basically let it run in the background by itself until the game was released to the public.

I knew it was going to be a wait when I bought the domains (although to be honest I thought the wait was going to be more along the lines of 1 year, not 3), but also understood that it was a good investment. I had several offers of around $7,000 for the Starcraft2.net and SC2.net pair in 2009, but turned them down because I was pretty confident I could get more if I waited until the release dates.

Grasping Opportunity

The point of this post is to give you another example of why taking advantage of an opportunity is so useful.

I know that not everyone is a gamer or Starcraft fan, but I know that some of you are and probably heard about the news on the same day I did. When I heard that SC2 was officially in the works, my first thought was “Awesome”. My second thought was “This is going to be huge – I’m going to see what Starcraft and Starcraft 2 domains I can grab ASAP”.

There’s nothing I did that somebody else couldn’t have done – I just saw the opportunity and acted on it. I also went what you might call a step further to actually phone the owner of one of the domains instead of just hoping he’d answer my e-mails. I didn’t want to lose the opportunity.

Of course, this mentality goes beyond simply grabbing gaming domains and even domains in general. The point is to take advantage of opportunities when you see them, because the early bird gets the worm and if you snooze, you lose.

Try to keep a third eye open for opportunities (you could call it your “opportunity eye”) in the future. You might be surprised at just how many opportunities there are out there. Be sure to act on the ones that you think are real gems, and not just think or talk about them.

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Posted: September 2nd, 2010 under Miscellaneous  

53 Responses to “Grasping Opportunities #2: How I Turned $2.3K Into $16.5K”

  1. Michael Kwan says:

    Awesome story, Tyler. No risk, no reward.

  2. Well done Tyler. Enjoyed reading this and it really worked out well for you! These kind of opportunities are good to jump into but rare.

    I agree with Michael, No risk, no reward :)

    • Yes it worked out extremely well for Tyler. It seems these opportunities are rare, but that is not necessarily the case. If you know what you’re doing you can make a profitable business just by buying and selling domains that suddenly have a reason to trend upward.

  3. interesting says:

    great opportunity or failed opportunity?

    Its great that you flipped it for so much, but you might be kicking yourself in the ass a couple months or even years down the line. 15,000$ is a nice paycheck but the potential the domain name has I would say is way better than 15,000$.

    You didn’t do anything to it this whole time basically and ive been watching the site to see what you were gonna do with it since you seemed to be doing nothing wasting your chance at having a good shot at a big starcraft 2 website. Its a good thing someone took it off you because the name would of went to waste.

    you were already getting 400 uniques a day and ranking high for good terms without doing anything pretty much. Im sure the owner will no problem at all getting those numbers a lot higher than that. I think you really missed the boat on this one. Like I said 15K is a nice little flip paycheck but you could of built it up and had a site that pulled anywhere from 1k-10k every month. I think you messed up on letting this one go. And id say your in a situation where you need more residual income seeing how your other sites aren’t doing much these days anymore.

    • Paul says:

      As with something like a Stock, you never know for sure which way it’s going to go.

      I actually had a conversation with Tyler a few months back and we were discussing how important it is not to get too attached to projects as entrepreneurs.

      A lot of entrepreneurs, including myself and Tyler, have made the mistake many times before where we build a project up to a certain point when it was worth a lot and instead of cashing out we just held onto it and soon enough it wasn’t worth nearly half or even a quarter of what it was worth.

      I actually think Tyler did the perfect thing here. Don’t forget, he can take that money now and invest in other projects and diversify his risk.

      Also, if you believe it was such a big mistake and the domain is worth way more than $15k, then why didn’t you buy it and make the profit yourself? :)

      -Paul

      • interesting says:

        Oh I don’t think the domain name is worth over 5k actually. I’m just saying the site could be made into a big thing because of the domain name and the easy rankings it can achieve with it. Tyler for sure got his monies worth out of the domain name itself. All I was saying was he could of done so much more with it than he actually did. Then 6months to a year down the line he probably could of sold the site for 5x that.

        He had a chance to turn it into something big. You gotta think long term instead of fast cash. All his previous projects are dying hes working on this robotwarz thing that is gonna be a hit or miss and even if it does really well there will be no substance to keep it going for the long run.

        As far as me buying the domain name I didn’t know tyler would actually sell the domain name. And even if he was looking to sell he tends to ask some insanely inflated prices. Either way we will see what happens in the coming months. The person who bought it still hasn’t put up a site yet so I dunno what they are waiting for. They could be flushing that 15k down the toilet if they don’t get something up soon.

    • Alex Dumitru says:

      I don’t think the domain was valued at $15,000 but lower, considering it’s a dot net domain name, which have way lower value.

  4. Wesley says:

    The comment from “interesting” is a good one indeed, you could have build a great community and sold this for much more. Of course, we have to make decisions on which projects to develop so I assume other projects simply took up all of your time. Still a great sale, congrats!

  5. Kevin says:

    Were you not worried about losing the domains in a UDRP?

    • Tyler Cruz says:

      Not with Blizzard. I was with Valve though, which is why I got rid of Halflife.org even though I could probably easily dispute it was a legitimate domain to own because of it’s dictionary/scientific roots.

  6. Tim says:

    Great post. Moments like this renew my faith in Tyler.

  7. used tires says:

    I knew you’d be able to sell your Starcraft 2 domain, pretty awesome that it did happen! Gonna be interesting to see from a fan perspective what the new owner does with the domain name.

    Till then,

    Jean

  8. That pays off your time and patience with those domains!

    Great job Tyler!

  9. Greg Ellison says:

    That was a great story. How 3 years of waiting turned out to be a great pay day. Keep up the great work Tyler. Thanks Greg Ellison

  10. Jonathan says:

    This is a great post. I love that you are willing to share your business dealings in depth. Giving example of real word applications and results, rather than the fluff and theory that gets pumped out by so many others.

  11. Ted Gerner says:

    Thanks Tyler for the great story! Really inspirational!

  12. DesignsVault says:

    Fantastic story Tyler,

    with patiente and some investment we always make some profit.

    Best regards

  13. Dave Starr says:

    Congrats on having vision and persevering. I well remember when you were buying those domains … I actually thought about them fairly recently when I saw something about SC2 in the news … I haven’t been following and thus wasn’t aware that SC2 had not come out yet.

    I wonder how many of us who are afraid to pull the trigger on a deal have probably wasted$2500 or more over the time you have held these investments … you see something, you feel it’s a winner, take action and don’t stew about “risking the money” …chances are “the money” will be frittered away on other. less important schemes, if you let the moment pass.

    And again, regarding the negotiations … proof once again that when getting asking prices set in order to begin negotiation, he who names a price first usually loses. Always better to get a figure from the other side and then negotiate from that … if you name a price (like $1,000), and then other side accepts … wow, you could have gotten more just by having the patience to force them to name a figure first. So what’s the next really hot game “coming soon”? (aside from Robot Warz, of course)

  14. Jeff Klein says:

    Great post Tyler. I agree, you must take advantage of opportunities when they present themselves. I’ve purchased several domains with that in mind however I haven’t taken the next step and built them out as you did.

    Any tips on this part of the process? You mentioned creating a forum. I see you’ve done that with a lot of your sites. You’re obviously a fan of vBulletin. What do you do to drive traffic to your newly developed forum(s).

    Thanks again.

    • Tyler Cruz says:

      Well 95% of the value in the same were the domain names, not the site, so be careful when calculating whether to make a site or not for your domain(s) as often it’s not worth the money or effort.

      I WAS a fan of vBulletin… until they sold it and the new owners completely screwed it up. However, the original developers are creating a brand new forum software (Wow, no non-compete deal signed?), and so I’d keep an eye on that. It will take a while for them to catch up to vBulletin though.

      As for traffic, I usually rely solely on SEO, natural backlinks, and word of mouth for my sites.

  15. browie says:

    I have 2 domains just like this. Both .com’s were gone but I got the .net’s Main keyword. I don’t think there is much more prefix or suffix type domains you can buy but whatever.

    I have no clue when it will be “peak” time. It may be NEVER actually.

    Maybe when it gets closer I’ll remember this post and hit you up.

    • used tires says:

      @Browie, that’s the thing though… as entrepreneurs we take the risk and predict that it will pay off in the future, its the same thing Tyler did, he saw the potential in it and held on to it until it paid off!

      Till then,

      Jean

  16. email lookup says:

    Tyler,

    This post was really a great example of how we can take opportunities and turn them into money…

    Thanks for sharing your experience.

  17. car battery says:

    Cool story, Tyler. Kudos to your patience in waiting it out till the release. I think I’m going to look at trying this practice out for things like movies, music, etc., also.

  18. Jeanny says:

    Great story. Learn so much. Thanks

  19. Thanks Tyler for the great story! I wanted to thank you for this excellent read!! I definitely enjoyed every little bit of it. I have bookmarked your site to check out the latest stuff you post.

  20. MyBB says:

    Thanks for sharing your experience.

  21. Great story and even better roi :)

  22. Bidet says:

    That was a great opportunity you saw, and you made great profits too. Have you done something similar with Diablo 3? Im sure once that comes out the domains will sell for quite a lot.

  23. SweatList says:

    Tyler, this is one of your better posts in quite some time. Some actual useful information backed up by concrete examples.

  24. This is great, im getting a start on this now let you know how i get on.

  25. Its funny the way life is, people came capitalize on being creative and smart enough to buy up domains before they get too hot.

    Well paid off in a big way my friend..Congrats.

    “TrafficColeman “Signing Off”

  26. Paul says:

    Gettting that check must be a great feeling!

  27. I got a cheque from Escrow.com recently also. Only it was $14,000 less. Loved the story.

  28. Sunfrog says:

    I told you those domains were only worth $200 and I was right. Now I get to say “I told you so!” :D

  29. wow, this just gave me a crazy idea… Old but good. this is something that you can rinse and repeat for any potential game release. Plan well in advance and the sky is the limit

  30. Kevin Simper says:

    Why is it always, when someone buy a domain for some huge money, that they dont develop the site?`

    Right now the two domains you sold is standing still and more than a week since you wrote that you sold it!

    Can you answer that tyler? :)

    Best regards, Kevin Simper!

    • Tyler Cruz says:

      It is odd, but I think a lot of people are often looking for “free money” and don’t really realize what it takes to run a website and the responsibility it requires. I’m not saying that is the case for this particular situation though. In this situation, the buyers I think are just very busy (from talking to them on the phone). They do have a “temporary” site up now though…

  31. Maartin says:

    Great post, and I agree- the lower the risk, the lower the return. One sometimes just have to take a leap in faith. What’s the worst that can happen? You fail this specific attempt but there will always be a new opportunity.

    But as Kevin said, the biggest issue is not taking action!

  32. Tyler,

    Man, I too have some great names under my belt and waiting for right opportunity to click. Also one should keep in mind the patent names too. This might throw in some trouble. But having great domain names with all the precautions is indeed a great earning investment by now or some time later.

  33. plin says:

    Do you take into account of such thing as trademark?

    Blizzard could easily shutdown any site that has the word Starcraft in it if they want to. So you can spend a lot of money and time developing the site but your livelihood would depend on Blizzard.

  34. Bit Doze says:

    You ware very inspired to do this, but the sum is not that big, instead you have made a very good profit.

  35. Woof Nice story aa. Love the way you did it. Like to earn like you. This post motivated people like me.

  36. Its great that you flipped it for so much, but you might be kicking yourself in the ass a couple months or even years down the line. -_-

PeerFly

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