From the BI article on how these dudes bought the domain name: http://read.bi/1mpHlW8
“we still wanted to negotiate on getting the price lower. We used a strategy Eric taught us here that I’m not going to share because I don’t want to share all of his secrets … but it did the job and we only paid a small amount over what we originally offered. “
Did you miss this part RIGHT after the part you quoted?
"AUTHOR'S NOTE: A few people got upset about this paragraph. I just want to make it clear that we didn’t blackmail or do anything nefarious here. It was more a negotiating tactic once we decided the ceiling of how much we could really spend. The domain owner decided it was worth getting cash instead of continuing on a non-existent side project."
They just strong armed the squatter. The dude was never building a project for socialrank.com, this clown writing it still thinks he was though. How is he a CEO? "Ok well we can only pay x+10%, so you have to come down from x+25% or the deal won't work and no one wins" especially the domain squatter who was never intending to use socialrank.com.
I like how he says "the principal of the matter" under cons. This guy gave an original offer that didn't work, launched a .co name ANYWAY, trademarked and cried when he couldn't fight over in-use, then has the galls to say he had principal in the matter. What a self entitled fool. I hate domain squatters as much as the next guy, and without a doubt this was a squatter, but you were just as scummy as him. Pay the man his money and move on, you wasted 6 months arguing over a few tens of thousands of dollars.
Great response! You're right that the guy was just a domain squatter. It's obvious since he was supposedly working on launching socialrank.com for 3 years and yet didn't even have a landing page. He only built a landing page after this guy started pressuring him to sell the domain.
Saying that he was going to use the domain to build a business and building a landing page were just meant to pressure the guy into paying a higher price; it's a negotiation tactic. If anything he got taken since if he was smart he wouldn't have launched socialrank.co, since that put more pressure on him to buy the .com domain.
He should have purchased it for a smaller price before launching, since he proved that it was a valuable domain name by getting so much press interest with only the .co He knows nothing about negotiation, and had to be bailed out by someone.
You have to pretend like you don't really care about the domain that much or else the seller will jack up the price. The more you fight and argue about it, the higher the final sale price will go.
He acts like it's a major victory to meet the seller halfway, when that's what the seller intended to begin with and would have sold for a much smaller price had that idiot never launched socialrank.co to begin with.
Anyways, you don't have to have a very good domain name to succeed. I've seen many startups succeed with terrible sounding domain names and ones that are made from misspelling English words. What matters more is the concept and execution.
OP here. Not siding the author, just curious as to whether the tactic referred to was a distinctive move worth knowing or not.
I hate domain squatters too and I think the writer exhibited stupidity in not changing the name from the get go. "SocialRank" = 2 words with many synonyms, eg Rank also = class, grade, level, position, slot, stature, status, cachet, sort, order, footing, peg, etc. So alternative could be eg SocialPeg, which is 1 letter shorter and easier spelt!
As an investor, I would judge a founder negatively for this because there are better ways that the funding and company time could be spent instead of this wankers' exercise. It would also my assessment of founder's intelligence in my eyes. I mean, who voluntarily gives a squatter ammunition by increasing the value of of a domain name and providing proof??