Interview by Mike Sullivan of Sully’s Blog
Eric Borgos is well known for the sale of Bored.com for over $4 million. Born an entrepreneur, he spent his childhood days turning hobbies into profits by collecting and selling coins and baseball cards. As a teenager, he had an interest in trading stocks and it was not unusual to find him reading the Wall Street Journal. In college, Eric ran a “976” phone line teaching people how to make money. After college, Eric stared a computer consulting business and soon moved into designing websites for others and then for himself.
Impulse Communications, Inc. was founded in 1990 by Eric Borgos and was incorporated in 2000. The company runs over 300 developed websites and owns over 9,000 domains. The company’s revenue comes from ecommerce sales, domain sales, advertising, and parking undeveloped names. Impulse Communication has been featured in several blogs and in the traditional news media as well.
Eric, the evolution of Impulse Communications, Inc. is impressive, growing from your post college computer consulting operation to the domain and website force we see now. Tell me about Impulse Communications today. Is it a one man operation, or do you have a staff? How are you able to manage 300 active sites and a portfolio of over 9,000 domain names?
My company is somewhat unique, in that I plan never to work from an office no matter how big my business gets. I have everything setup to be as virtual as possible so I can work from home. At one point I had 15 people working for me from their homes in many different countries, yet I had never met any of them or spoken to them by phone, we just communicated by email.
My mailing address is a virtual PO Box where a service scans all my mail online so I can read it, and I have a phone number where all my voicemails are translated to mp3 files (and also translated to text) and emailed to me. All of my company’s bills are setup to be autopayed from my checking account/credit card and all my income is deposited automatically into my bank account. For the few companies that still pay me by check, my mail box service scans the checks and deposits them into my bank account for me. I even signed up for a new e-signature service today that allows me to sign documents (like domain name sales contracts) online so I don’t need to manually fax or mail them back to people.
All that being said, my business still requires a lot of work. Although I use several programmers, I handle everything else myself. I spend my first few hours each day just dealing with emails. There is always something that needs my attention, like a server that is down, domain name offers that need a response, paying money to workers, questions from programmers, changes that need to be made to a site, billing issues, etc. I also need to deal with all the general hassles of running a business, such as accounting, taxes, computer software and upgrades, calls from sales people, contracts and paperwork, legal issues, and more.
Aside from when problems arise, most of my sites/domains run themselves. Much of my time is spent on new projects, like creating new websites or adding to my existing ones. In the past few years I have done a lot of work adding content to my sites Dumb.com and Adoptme.com, since I think those have a lot of potential.
You have had success with developing sites as well as selling domains. Which criteria do you use when deciding which domains to develop and which to sell?
I own so many domains at this point that if I have somebody seriously interested in buying one of them, I usually try to make a deal with them. If they don’t have a lot of cash, sometimes I do a rent to own type contract with them, where they pay me a small amount of money up front and then if their business does well they can buy the domain from me at a predetermined price. That way if they buy it I get my full asking price, and if I end up taking the domain back after a few years then at least it has a lot more traffic then it previously did, from whatever marketing they did for their site.
I will sell any of my domains for the right price, but since I have 9000 domains and only sell a few a month, I need to work on developing as many of my domains as possible. Around half of my domains make no income at all, but still cost me $8 a year each in fees. Right now I am in the process of setting up a partially automated system to put content (with ads) on all the domains I am not using, so at least they will get ranked in the search engines and hopefully make more than the annual domain fees.
You are pretty transparent about your business. You list your revenue by market segment right on ImpulseCorp.com (http://www.impulsecorp.com/about) as well as annual sales and net income. Based on your experience, what is the most effective means for generating income online?
I think pretty much any type of online business can make money, it is just a matter of what you like to do best. I used to run a bunch of ecommerce sites, selling physical goods such as vitamins, candy, cookies, fish, and caviar, but I hated it. There were constant shipping and inventory problems, constant emails from upset customers or customers with questions, and constant fraud orders (which I would lose 100% on). The sites all made some money, but it was not worth it to me and I eventually shut them down. This was 5-10 years ago, so now things could be made more automated and I could outsource the customer service, but it is just not for me.
In the past I also ran some community type sites, like virtual pets or RPG (multiplayer games) or forums, and those made money, but were a huge amount of work for the profit they made. There is a large amount of politics and infighting among the staff on these types of sites, and they require constant moderation and constant updates to keep everybody happy.
Instead of creating new sites, for a few years I tried buying existing sites instead. After buying 50-100 sites at prices ranging from $500 – $65,000, I decided it was more trouble than it was worth. Taking over each site was a huge project, and traffic/income almost always went down after I bought them. But, maybe somebody else could have done a much better job turning these sites around. Since I did not really have any support staff, it all just meant extra work for me, but if I could have offloaded the work to other people than it would have been a lot more fun and maybe more profitable.
Investing in domain names is a good business, but risky if you try to make a living just from that, because it can take a long time to actually sell one of your domains.
Having a blog or informational type site is a good way to get started, because it is very easy to launch a site and put ads on it (I highly recommend using Google AdSense).
I think what really matters is for people to at least try some business online, and get a feel for it. You never know what will make money and what won’t, but the more things you try the more chances you have to get rich.
People looking to make money online often develop great sites based on great ideas but don’t attract the customers needed. How has Impulse been able to master this for so many sites?
I really don’t have any good ways of getting traffic. I have tried paid advertising, link trades, paid links, viral videos, search engine submissions, social bookmarking, and press releases, but none of that has ever done well for me. I find that if I create good sites, eventually search engines pick them up and other sites start linking to them, and then they start making money. But, many of my good sites never get any traffic at all. It is really a gamble, and each of my sites is like a lottery ticket. The more sites I have, the more chances I have of winning.
I have launched many sites over the years that I thought would be huge hits, but they ended up going nowhere. So, although I don’t have any good suggestions on what to do about this problem, I can suggest what not to do, which is to put all your eggs in one basket. I see many people who spend months planning a site and then launching it, counting on making money from it, only to end up with nothing. You need to keep your mind open to the fact that your site may not end up being successful.
You have posted on your blog (http://www.impulsecorp.com/how-to-get-rich-online-book-introduction) that you are considering writing a book entitled “How to Get Rich Online.” You have even posted the introduction and epilogue. How serious are you about doing this? What would you want the book to accomplish?
I like the idea of writing a book, and because of self-publishing it is very easy to become an author, but I am not sure I ever will actually write one. One reason is that it seems like a lot of work for a small amount of money. I would probably be better off spending the time creating new websites or online businesses. Not many self-published authors make any significant money from it, and even worse, much like with a website, I could spend a huge amount of time working on it, but hardly anybody might end up reading it.
Another reason is that after showing the introduction and epilogue to my wife, she thought what I wrote was great, but was not too happy with the book idea due to privacy issues. Although I write about a lot of personal things in my blog (by “personal”, I mean about my business, but me and my business are mostly one in the same), it is read by a relatively small number of people. A book opens things up to a much wider audience, and she is worried about all the crazy people out there on the Internet, in the same way she is very concerned about Facebook and about posting personal photos and videos online.
If a real publisher offered me a million dollar book deal, I my wife would probably be fine with it, but since there is little upside in me publishing the book myself, and I am not even sure it is something I want to do, it is best for me to drop the idea for now and move on to other things.
The sale of Bored.com and 170 related domains is pretty amazing and well detailed in your blog (http://www.impulsecorp.com/the-psychology-of-a-multi-million-dollar-sale). Looking back on that sale, how has it changed your business and your life?
I feel like for 10 years I was on a roller coaster ride, and it was time to get off. Everything was going well, and I had no reason to think business would go down, but I just wanted things to be more stable. It was not so much that I wanted specifically to sell Bored.com, it was that I wanted to sell part of my business so I would have money in the bank. If I instead could have sold most of my domains, and kept Bored.com, I would have been happy with that scenario also. It was just that Bored.com was easier for me to sell.
Before I sold those sites, I always worried about how my business could be ruined by events such as a lawsuit, losing all my server data, domain names becoming worthless, fraud/theft, the economy crashing, etc. , because I had almost no money in the bank so I would end up with nothing. Now those are all still potential problems for my remaining sites, but with money in the bank I don’t care as much about them.
I also used to constantly do as many new projects as possible, because I worried if I did not keep adding content and creating new sites, my income would go down. Creating this new content and site is what took most of my time, so since the sale I have scaled back on new projects, allowing me to work less hours and have less pressure.
Interestingly, after I sold Bored.com, the new owner added hardly any new content for the first 2 years, had all sorts of errors on the site, lost some data, yet income stayed the same as it was when I owned it, so in hindsight it seems I could have safely scaled back without selling it. But, I am still glad I did, because I have many websites and domains left that I can work on, and an almost endless supply ideas for new online businesses that someday I might launch.
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