|
|
The
domain industry's version of Crocodile
Dundee - Dan Warner has experienced both
adventures and misadventures in his life. |
While most of our
readers know Warner by name and many know him personally,
very few know about the remarkably circuitous
route that led the transplanted American to Australia
and eventually to a leadership role in an industry
that seems tailor made for his talents. We're
going to take you along on Warner's wild ride through a
hitch in the
Navy, stints as a carpenter,
a paramedic, a fireman, a software developer and a
pharmaceutical salesman - as well as traumatic experiences
that included a near fatal accident and a thieving
CFO who wound up in jail after destroying
their multi-million dollar company and leaving Warner flat
broke. Whew! You might want to buckle your
seatbelt for this one. It has often been said that the
most successful people in the domain business know at least a little about a lot of
different things. The theory is that people like that are able to spot good domains names
in a far wider variety of categories than those who have
traveled a more |
| linear path. Warner's background, combined
with his voracious appetite for reading and a proven track
record make him Exhibit A for anyone wanting to
advance that argument. |
Warner's
story starts on July 15, 1966, the day he was born in
Cocoa Beach, Florida to proud parents Joseph
and Jacqueline Warner. Dan, the family's third child,
was a "space baby." His dad was a NASA
manager working on the Gemini program at nearby Cape
Canaveral while Jacqueline stayed home to take care of
the house and kids. "I grew up in a place and age where
anything was
possible – including going to the moon," Warner said.
"My father had an MBA back in the 60s from the
University of Iowa, which at that time was unheard of.
He was energetic, entrepreneurial, and constantly
reminded me that I could be anything I wanted to be." That
didn't mean that Warner was born with a silver spoon in his
mouth - far from it. "My first
home was a trailer in a trailer park," Warner recalled.
"Housing was difficult to find and my father was moved around
a lot in NASA, so trailers made sense even though, as small as I was, I remember it
being a fairly tight squeeze for a family of
five."
|
Even after his father left
NASA the family stayed on the move and Dan eventually found
himself living about as far away from Florida as you could
get without leaving the country altogether. "I must have lived in more than 10
states – finally settling in Alaska of all
places," Warner said. "My father worked there on the pipeline as an electrician.
Tradesmen working on the pipeline made more money than most
jobs in the United States at that time so he took the job
and worked 60/10s - 60 hours a week, ten weeks at a time, with
sub zero temperatures in the Alaskan tundra." "My early childhood memories of the gypsy
lifestyle were probably what
|
|
| led to my tendency to live
and travel throughout the world. I’m currently a
dual citizen of both the United States and Australia, and
have lived in Australia now for almost 20 years. I
average around six international trips each year,"
Warned noted. "The second outcome of my father’s example of
over
working himself – created a self determined drive to work
smarter, not harder, and try to live a balanced life at the
same time. I think I am reasonably good at the first
and horrible at the last," Warner mused. |
As
a domain industry executive, Warner has taken a more
"academic" approach to defining and solving
problems than most if not all of his peers. That is
something few of his high school teachers would have ever
predicted.
|
Warner's
high school in Anchorage, Alaska |
"In
my early years my academic achievements were slight,"
Warner admitted. "I was frustrated and barely passed my
classes. Just about the time I settled in at a school
it was time to move again. In high school (at Anthony
J. Dimond High in Anchorage, Alaska) I received
“A’s” on the tests, and failed to do the daily
work. I just didn’t see the point of continually repeating
the same problems once you learned the concepts."
|
|
There
were some things that captured Warner's attention though.
"My five major interests were medicine, computers,
martial arts, travel, and cooking – a strange combination,"
Warner agreed. He credited his introduction to computers to
being in the right place at the right time. "Alaska |
| was
rich with tax dollars and they spent a great deal on hiring
teachers and supplying the schools with the best of
everything - one of which was a computer lab with 30
computers at a time when few schools had them. I took
classes in some basic programming, and traded computer games
with friends," he recalled.
Though
Warner said he spent a lot of time in his teen years driving
fast cars, chasing girls and trying to be "cool"
(and not necessarily excelling at any of those pursuits)
that period of his life also set him on the course he has
been on ever since. "I started my first business at 16,"
Warner said. "Daniel’s Catering was featured
in the local paper and made almost $20,000 in the
first month of trading during Christmas. A monster
was born – business junky extraordinaire! The first thing
I did was to go out and blow all my money on a bright red
sports car. Fiscal responsibility and 16 don’t really
go together," Warner laughed.
Even
so, Warner's entrepreneurial acumen was soon recognized as
he was elected State Vice President of a business club
called the Office Education Association. "It
sounds fairly nerdy and it was," Warner said. "The
main reason I joined it was they traveled interstate several
times a year, and it was 99% girls. You can decide
what my primary driver was! However I |
Warner
began devouring business
books as a teenager. Donald Trump's
The Art of the Deal was his favorite. |
| did learn how to touch
type, an uncommon skill then for a boy." Warner also
started reading business books. "I’m sad to say it
but my favorite one was Donald Trump’s The Art of
the Deal." |
|
|
|
Business wasn't the only area where
Warner was starting to kick butt. "I managed to
get my black belt in Kempo
and at 18 was the Alaska heavyweight kickboxing champion
for a very short period of time." That was
quite an accomplishment, but Warner found that there
was also a downside. "I learned quickly
that even when you win, you still got the tar kicked
out of youm" Warner smiled. "It was a
short lived career in full contact, but I did
compete extensively in semi-contact martial arts
tournaments after that." |
In
1983 Warner finished high school early but his grade point
average was undistinguished at 2.00. The next year, things
changed when he entered community college and found an
atmosphere that suited him far better. "I finished
those two years with a 3.00 average - markedly better than
high school where I couldn’t seek out my own subjects of
interest. In college daily work wasn’t required
either," Warner said.
| Though
things were starting to click on the academic front, a
stronger urge sent Warner off in a different direction.
"I was 18 at the time and I decided that I should join
the Navy and see the world," Warner said. In
1986 he was sent to boot camp in San Diego where,
after swimming well in trials he was selected for a
prestigious position with the Navy's Rescue Swimmers.
"This was basically jumping out of helicopters into the
water trying my best to look like Kevin Costner,"
Warner said. Unfortunately, a major snafu cut his tenure as
an action hero short. |
Navy
Rescue Swimmer's helicopter |
Though
he was considered a rescue swimming specialist, the Navy
also required that specialists have a separate primary
occupation rating earned through an "A"
school - a requirement the brass somehow forgot about. By
the time the oversight was spotted the only ratings
available on such short notice were quartermaster and
boatswains mate - both seafarers ratings, neither of which
allowed him to be a rescue swimmer. A frustrated Warner, who
had been slated to go to the Anti Submarine Warfare
Operator school, saw his slot go to someone else while
the Navy tried to figure out what to do.
"I
was caught between a rock and military administration,"
Warner said. "They offered me a full honorable
discharge and $24,768 if I wanted to leave the Navy
with an option to return nine months later to a rating that
would allow me to be a rescue swimmer. Instead I decided to
jump out of the helicopter and back into university
and business, leaving the Navy and government bureaucracy
for good."
|
|
Warner
returned to Alaska and soon after decided it was time for
another change of scenery. He made his way to Seattle,
a city that would serve as his home base for the next six
years.
Warner now had to pay his own way through his final
years of college. To get the money he decided to learn a
trade and wound up becoming a union journeyman carpenter.
"This paid well and gave me a backup trade to fall back
on. It also led to founding my second real company “DSW
Contractors” - a business that allowed me to bill my
clients contractor rates rather than as a tradesmen,"
Warner said.
"During
these years I became involved with
|
| the volunteer fire
department and eventually became certified as an
Emergency Medical Technician and Fireman,"
Warner recalled. While volunteering as a firemen Warner
found he loved having the opportunity to help people and his
superiors loved a special quality he demonstrated - the
ability to keep his head in emergency situations. |
|
|
|
"We
ran into burning buildings when everyone else was running out
- as they say in the business, “putting wet stuff on the
hot stuff." Warner said. "We peeled people out of
cars with rescue tools at 3 in the morning, and dealt with a
lot of people's heart attacks." His continued exposure
to emergency medicine awaked a new desire in Warner - he
wanted to become a doctor, an emergency medical
specialist to be exact.
Toward
that end, Warner divided his time between his contractors business,
fire
training and part-time college classes. When he had
accumulated enough credits to enter his senior year of
college, Warner gave up the business and enrolled full time
at Central Washington University. He |
| pursued a double
major in Paramedicine and Zoology (Human Anatomy &
Physiology) – the recommended pre-medicine degree. Warner,
who also picked up minors in business, chemistry and
psychology, boosted his GPA again and went on to graduate
with a 3.3 average, leaving CWU intent on moving on to
medical school. |
"After
I finished at CWU I stacked up all the books I had
read," Warner said. "They measured well over my
head, close to eight feet tall. I had already forgotten well
more than I would remember, but I did take away the
repetitive mental exercise and the fundamental processes
that were required to create positive outcomes as
well as the ability to self-learn effectively and
efficiently."
"While
walking through the student union building as I was just
about to graduate in 1993, there was a foreign exchange
program set up at a booth. A nice looking girl asked me
if I had ever been to Australia, and would I like to study
there for awhile? As it usually takes a year to be accepted
into a medical school, I took up their offer to join a post
graduate exchange program with an Australian
university," Warner said, adding " I have been in
Australia ever since!"
| "After
I had moved to study in Australia I faced the tremendous
conflict of falling in love – with a country.
Australia is the most phenomenal place on earth. I
have traveled extensively before and since that time and I
still believe Australia is unequalled in beauty and
lifestyle."
"The conflict that arose out of this was that in
Australia becoming a doctor was an undergraduate degree
which lasted six years. At the time I arrived, the
country was in a transitional period of upgrading medical
study to become a graduate program. The first graduate
positions for medical school weren’t to begin for four
years. Also, with a largely socialized medical system,
doctors were typically paid less than $100,000 a year and
foreign medical degrees were strongly scrutinized. The cost
of foreign study was monetarily prohibitive if my intention
was to return to Australia. The result was that if I were to
stay in Australia I needed to choose another career
(at least for the next four years), or leave Australia
permanently," Warner said.
Given
his love of the country, the latter was not an option, so
Warner had to plot a new |
When
Warner saw Australia it was
love at first site. This is Noosa Beach
where he now has a vacation home. |
| direction for his career but that
course also left him facing unexpected roadblocks. "It
might come as a surprise to many Americans, but Australia
and many European countries do not recognize a significant
amount of education and training from the USA,"
Warner said. "My degree in Zoology was recognized but
didn’t qualify me for any particular career. My degree in
Paramedicine wasn’t recognized as qualification for
emergency medicine in Australia." |
|
|
|
"Australian
Paramedics were only allowed to administer the equivalent of
aspirin, nitroglycerin, and little else – they were
glorified ambulance drivers. Paramedics, where I had trained
in Seattle, were qualified to administer 64 different drugs
in the field, did arterial lines, and performed occasionally
surgical procedures. I was not going to be allowed to
perform any form of emergency medicine in Australia
until I became a qualified doctor. Even my qualification as
a journeyman carpenter wasn’t recognized. If I was
to perform any trade in Australia I would have to start
from the beginning." |
The
solution to Warner's problem would be returning to his
entrepreneurial roots. "I looked at my life, studies,
experiences, and interests and found the interim solution
there - my lifelong interest in computers," he
said. Warner decided to start a new company, Wild World
Software, whose first product was a screensaver
slideshow of Australian wildlife which was sold to tourists
for $29.95. "We sold thousands,"
Warner recalled. "I also learned that at that point in
time distributors controlled the flow of money for software
producers and had a way of extracting most of the profit for
themselves. Distributors required software vendors
to ship them enough stock to last for six months, which they
wouldn’t pay for until after the six months had passed.
Plus, they had the right to return all of the stock and made
you pay the freight! They had a fully stacked deck."
Warner
continued, "These distributors didn’t realize that their
time was running out. Something new was coming.
A global distribution mechanism that could change everything
– the Internet. The problem was that the internet
wasn’t commercial yet."
| With
the web still in its infancy, Warner, tired of living like a
student and scrounging for business capital, listened to a
friend who encouraged him to get a job with a pharmaceutical
company. "I had the right credentials to communicate
effectively with doctors and became a representative for Abbott
Labs," Warner said. "This gave me a lesson in
two important things; |
|
| the nature of corporate business and
the importance of cash flow. I did well with Abbott. I had one of the most
successful territories in the country and managed to do my
work in less than 20 hours a week." |
Warner's
performance earned him an opportunity to become a higher
paid specialist in surgical anesthetics, a position that had
him based in Sydney for a couple of years. There he
found himself in the wrong place at the wrong time -
a misfortune that almost cost him his life.
|
|
"One
morning I was crossing a road to get to the bakery across
the street for a croissant when a car hit me from behind
- full speed, no attempt at braking," Warner recalled.
"The woman was putting on her makeup on the way to work
and hit me while I was standing on the median strip.
Luckily her car was relatively low at the front and it swept
under my legs and drove me into her windscreen shattering it
and destroying the car. It launched me some 50
meters down the road from a dead standstill and
eventually I stopped rolling. After I blacked out I found
myself in the odd position of being in an ambulance – this
time at the receiving end. I should have been very
dead but remarkably I survived despite
considerable tissue damage, thousands of pieces of embedded
glass (I picked them out of my flesh for more than six
months), a broken scapula, and two broken wrists (with two
arms in slings eating was a challenge)."
Warner
spent the next few months depressed,
|
| unable to exercise
(which led to gaining 44 pounds) and bored out of his mind.
He found his salvation in a familiar place - a stack of
books. |
"I
read every book I could find about being an expert in
computer related businesses, and business in general,"
Warner said. "I taught myself html markup,
looked into design, programming, and databases. I
realized quickly that computer specialists weren’t that
different from tradesmen. Architects, foremen, interior
designers, carpenters, plumbers, electricians vs. Internet
architects, product managers, website designers,
programmers, and administrators. I read a hundred books on
software businesses (and eventually internet ones). One
thing about a rigorous education is that it teaches you that
you have to read vast amounts of information and take
away what really matters – what you really need."
| As
the calendar turned over to 1998, all of that information
that Warner absorbed helped spawn a great idea. "It was
one of those ideas that you can’t stop thinking about
– an Internet startup," Warner said. "The idea
was an internet portal that was made up of a directory of
dynamically created websites which listed products and
services. The difference was that they all reused
product and service data whenever possible, so websites
could be created in a matter of hours. Businesses paid
$2,500 and didn’t have to pay another cent until
the business generated $25,000 in sales via the
network. The bulk of the initial revenue was paid to
buy traffic and monetize it through the system. It was
a highbred CPA network, with roots in CPC and CPM."
"We
could effectively remove most of the barriers to entry for
most product and service based businesses, while raising
their barriers to exit - once they had sold the base level
of products they had no reason to leave and great incentive
to pay again. It was all based on content management
ideals even before they were popular. You might recognize
that the principals of this business are very similar to
most working models in the Internet today," Warner
said.
|
In
1998 Warner came up with a $50 million
idea that wound up being derailed by
a dishonest CFO inside his company. |
|
"I
began to write things down, work out financials,
flowchart systems, requirement documents, marketing,
sales, technical specifications – a business plan
was formed. I took on a partner who was
successful in his own career and had an MBA. I would
later install him as the CEO to administer the
business while I ran it from the inside." |
|
|
"Now
we had an idea but didn’t have enough money (we had raised
about $25,000 in startup capital). So I hoped on a
plane and went to Comdex in 1999, the USA’s biggest
computer conference, to measure the market, generate ideas,
check out competitors, etc. On the flight into Las
Vegas, as we were descending to land, a friend that came
with nose bleed. The man next to him
offered him a handkerchief and out of politeness asked what
we me started to get a were doing going to Las Vegas. My friend told him we were
looking for ideas and investment for an Internet startup. He
told us he was looking for an investment,"
Warner recalled. |
"We
were very short on time – a literal elevator speech.
He liked what we said in the 5 minutes we had, spoke briefly
in the airport and exchanged hotel details. We had breakfast
the next morning and he wrote out a $50,000 check!,"
Warner said. "This angel investor led us to money in
the Middle East and presented me individually to each
of the six sheiks of the eastern province of Saudi Arabia.
Through his investment syndicate we raised around $1.5
million in six weeks – a company was funded and truly
born – “The Australian Shopping Network."
By
2000 the .com boom was fully underway and everyone thought
it was imperative that they get to market first. "Investors
demanded it," Warner said, "So we hired 60 people
in less than two months. They were a great bunch of
people. Everyone was fully dedicated and believed in the
vision ahead of them. We were building web systems, designs
and general technology at an extraordinary rate. Most people
worked ten or twelve hours a day because they wanted
to. Nobody had to ask them. We had the first production
prototype out in less than four months after the first
hiring. Everything worked exactly as designed. We now
had sales people all over Australia."
|
"Sales
were going great, the technology worked extremely well,
marketing and promotions were strong. The market loved
our product. The audited accounts told us we were
within six weeks of breaking even on our cash flow. Based on
what the capital investors were paying to invest, the
company’s value was more than $50 million already.
It was every entrepreneur's dream. Like the
previous generation's time of sending men to the moon, this
was our time – the Internet Generation,"
Warner said wistfully. |
|
|
Then
everything fell apart.
"One of our angel investors introduced (and pushed)
a CFO on us - Geoff Hirning," Warner ruefully
recalled. "What we didn’t know was that he started cooking
the books. The investment money, sales revenue, and
costs were all real enough – except he was depositing most
of the investment and revenue into another account at the
same bank (he would color copy the headings of our bank
statements onto his account balances). It was good enough to
fool one of the top three accounting firms in Brisbane
who had invested in us early on."
|
Hirning would turn out to be worse news than Warner could
have ever imagined. "He turned out to be a major
fraudster. Some of the references he used were people he had
stolen from who were hoping to get their money back from
him. He had defrauded a top 5 bank in Australia of
over $3.5 million, a super fund of $1.5 million,
and dozens of others. He was a true professional at what he
did. We had thought we had $750,000 left in the bank
(which was now in his account), and he also had marked $500,000
in debt as paid. So in one day we went from having $750,000
to having $500,000 in debt. He crippled us overnight
and tried to flee. We had him arrested and consequently he
was sentenced to 7 years in jail. The accounts were empty
when the fraud squad arrested him and the money was never
found."
Despite this catastrophe, the company and its employees
tried to soldier on. "Most of our staff got together
and agreed amongst themselves to work for the company for up
to three months without pay and forgo previous wages owed
until such time as the company could get back on its feet,"
Warner said. "They were a tremendous group of people
but I had to say no. The .com bubble had already
begun to burst, investors were unlikely to further inject
capital to save the company (which we confirmed later), and
insolvency laws in Australia are very exact on fiduciary
responsibilities. My company was sunk, and I was dead
broke. I sold off everything I had to pay back wages."
|
Ironically, in the middle of the worst time of his life,
something wonderful also happened for Warner. "It was
at this time that I got married. I had met Prudence James
at our first company Christmas party for the Australian
Shopping Network. Geoff Hirning, the man who unraveled my
company and lifelong entrepreneurial dreams, had introduced
us - his wife was Prudence’s best friend. The CFO
destroyed my company and went to jail, I gained a wife and
lost tens of millions," Warner said. "To her
credit she married me with nothing (at least I know she
wasn’t after me for the money). I may have been the one to
get the better part of the deal," Warner smiled.
Warner had to start all over again. "I went to work
for a local web development company. They wanted me for
sales, then operations and technical development. I
did well to work myself out of debt and make a local name in
web development. I brought in the best accounts and produced
the most technical solutions for complex
problems. However, I didn’t like that they
were a Microsoft shop. Everything was
reliant on
|
Dan
Warner and wife Prudence
on their wedding day. |
| Microsoft providing
the tools to do it first. Writing any new code
or design seemed to take forever. We
were producing projects which I felt should
have been taking a few weeks and a cost of $10,000
or so and billing the clients five times
that. It was unsustainable. I believed that
most things should be dynamically built and
self administered. I still do," Warner
said.
|
"We
produced good projects, some big names, government, beer
companies, even the website for Steve Erwin - the
Crocodile Hunter, an Australian icon. What I didn’t
think we were actually producing was value."
So
Warner kept an eye out for other opportunities. In 2002, the
Sales Manager from the Australian Shopping Network sent him
a newspaper ad placed by Dark Blue Sea Limited
seeking a Chief of Operations for the company. Warner's
friend told him he didn’t know anyone else that could fill
the job description except Warner. The ad called for a
little bit of everything, a lot of some things and real
internet experience as an executive - so Warner applied.
|
Richard
Moore, CEO at Dark Blue Sea
when Dan Warner joined DBS in
2002. |
"Richard
Moore interviewed me first," Warner recalled.
"Richard had inherited the role of CEO for DBS when his
predecessor had proven to be very good at spending money,
but not so good at making it. Richard was a
mathematician in training and had been put into the company
to look after a venture capitalist's investment. With the
CEO role suddenly vacant Richard was asked to step in as
interim CEO and when they couldn’t find anyone with
Internet experience (in 2002 there really weren’t any) he
ended up keeping it."
"Richard
had interviewed and put forward a few different candidates
to take over operations of DBS, but the founder, Dean
Shannon, had dismissed them in short order. Dean Shannon can
be credited with being one of the Internet’s premier
entrepreneurs. He made money in all sorts of ways, and
had a particular fondness for domain names and the
power of their traffic. He was looking for someone different
and apparently when he met me he had found someone close
enough. He hired me without even discussing pay. He offered
that something would be settled that would be reasonable and
better than my previous packages. He was very generous."
|
|
|
"Dean
also told me that my
position was to build a purely generic internet company that
leveraged and expanded all that they had previously learned.
I was there to get things done and don’t worry about being
popular," Warner said.
"DBS
was a start-up and it had creative problems, large and
small, that needed to be solved. It must have had 15
different products that were underway, of which only one had
shown any revenue potential when I joined. So we had some
products that had no reason to exist, some fantastic
products that were barely out of prototype needing immediate
development and some problematic staff that had dug
themselves into the bunkers. Quite a few staff members got
along in the company through popularity rather than
intelligence, experience, skills, or value added"
Warner said frankly.
|
Dark
Blue Sea Founder Dean Shannon |
"Roar.com, our search directory (the profitable
product), had 12 categories – total. The mechanisms of
buying and selling traffic were reasonable, but the
foundations were soft. We created hundreds of categories
overnight and an automated signup system. We reviewed
products, mothballed some, developed others, and hired
people to build traffic websites. It didn’t take long to
figure out what and who were going to be productive."
"We
tried to build products at light speed. Ken Allen
(a veteran programmer who didn’t like to manage people) Jackson
Hopkins (a junior programmer who did and
eventually became CTO), and Peter Stevenson (the
operations manager) were all integral to getting
things done. I came up with questions, and the
intelligent guys came up with the right answers,"
Warner said. "Richard Moore was a very smart guy
- crafty and good at game theory. As CEO he often
mused that 90% of his job was listening to
staff problems – personal and professional.
Richard and I debated everything – but as a whole
anything that wasn’t too far out there we tried."
"Richard, Dean, and I were a fairly good team. We
had a reasonable balance and generally we were productive
together. I had a way of irritating people
occasionally as I tried to get things done, Richard played
peacekeeper and Dean threw in ideas - we all added value."
Fabulous.com is Born
| "I
ran across a domain that was for sale on Sedo.com -“Fabulous.com,"
Warner recalled. I liked it for a brand. For
what I didn’t know but when I showed it to Dean he had me
buy it without negotiating for the $10,000 asking
price." That purchase paid great dividends fro DBS and
continues to go so to this day. But at the same time the new
Fabulous.com was being born another birth commanded
Warner's attention. |
|
"We
were just launching our first iteration of products for DBS
and times were very busy when my wife gave birth to our
first child, Ella," Warner said. "Unfortunately
Ella had major complications and was near death in
the hospital. Her lungs hadn’t fully developed yet. After
an emergency hospital transfer and several weeks of
treatment she recovered. I was very close to Ella at the
time and we have had a special bond every since. It
is very easy to be engulfed by work but quality of
life and family is what really matters"
Back
at work, "DBS floated in the first year after I joined
through a reverse takeover," Warner said. "Richard
and I tried to “corporatize” the company. We put in
management systems, incentives for sales and I benchmarked
everyone in the company with a system called “brainbench.com”
(a hugely unpopular move)."
|
Warner
had to make some tough
decisions during the Fabulous years. |
To
complicate matters, as always seems to happen in life,
another storm appeared on the horizon. "The Internet
had another mini bubble burst in actual revenue,"
Warner said. "This is December 2002 and the company was
heading into the red in a hurry. Staff needed to be
cut immediately, unprofitable products needed to be cut,
everything needed to be more efficient. So we did."
"The
benchmarking we had done on the staff had identified the
most skilled programmers and designers. That combined with
an exhaustive review created the basis to cut the fat out of
the system. Marginal and unprofitable products that had been
sacred cows were slaughtered, popular but
unskilled staff were let go - I even put myself up for
potential termination based solely on my salary (luckily
they kept me)," Warner said.
"The
outcome of this process was amazing. The staff which
had poor skills had been causing product and system issues
which took up the good programmer's and designer's time.
Training
|
| and retraining the
poor ones had been taking up all the
productivity of the better developers. As soon
as the bottom half of the programmers and
designers were gone the whole development
process quadrupled in productivity
with better quality of production,"
Warned noted. |
"Culling
the products had a similar effect. We focused on the
profitable production and pet projects were out. Finally we
had the production based on potential for revenue instead of
trying to justify why products had been created in the first
place. In fact, we were well on our way to creating a single
synergistic product with Fabulous.com. The product suite
included: Fabulous.com (Domain Registrar), Fabulous.com (Parking
Company), Roar.com (PPC Directory), PageSeeker.com (Paid
Search Engine) and DarkBlue.com (CPA Network)."
| "In
2002 we had already produced an internal product called the Dynamic
Generator. This was an unpopular product initially as it
replaced humans by dynamically creating websites
using search listings, search links, images, open source
information, CPA products, news, dictionaries, etc.
This product was developing dynamic websites long before
the rest of the market |
|
attempted it. The outcome of this
system was fundamental to DBS success in the early years
when search engines still ranked parking pages well in their
organic search. Without the added volume the company would
have had difficulty surviving," Warner said.
"We
also realized that the key to long term profitability
and stability was to own the traffic internally,"
Warner continued. "Domain Active, the internal
holding company for domains, began buying domains. We
created a market intelligence engine that collected and
collated all the data we could find to “guess” the
traffic value of domains that either existed or hadn’t
been registered."
"As a public company, we created a white
list system that could help determine if domains that
might have traffic and hadn’t been purchased yet had
potential trademark issues
|
|
| them. Once
identified, Domain Active domains were purchased by hand
prioritized by potential value. associated with Over the years 600,000
domains were purchased this way making DBS the largest
domain portfolio owner by volume of domains." |
|
|
Dan's
daughters Sophie and Ella |
In an interesting side note,
Warner added, "In the following years I
went on as Chief Strategy Officer to create
relationships with Google and Yahoo
for DBS. This included a deal which was one of only two in
the world at the time which was non-exclusive between
the two providers. We could send traffic to either
as we saw fit. Eventually Yahoo
threatened to cancel the contract and DBS
moved exclusively to Google for the following
years."
In 2006, after years of ups, downs and all
arounds, Warner was finally enjoying an
ongoing hot streak, both in the office and at
home. "Another joy was added to my
life when Sophie, my youngest daughter,
was born. This time there were no
complications – life was good!," Warner
declared. |
|
| In
2008 Warner had another new baby to boast about - this one birthed by
DBS. "We broke out of the crowd again when we
introduced the Domain
Distribution Network (DDN)," Warner said.
"The DDN was based on a paper
I wrote and released to the domain community in October
2008. This paper was based on analyzing the value chain of
aftermarket domain sales and made recommendations for
change. |
|
| After discussing the
paper with the major
registrars they requested that we build the system that I
had proposed, and that they would support it. The DDN was
launched about five months later and went on to contribute a
significant liquidation mechanism for aftermarket domains.
It provides real time stocking, distribution, transfer, and
settlement of domains between any registrar listed on the
network. More importantly to DBS it added millions in profit
to the bottom line by selling its Domain Active domains more
efficiently," Warner said. |
|
|
He
is on the road a lot but Brisbane,
Australia (above)
is still the place where Warner makes his
home. |
2008
had other highlights for Warner too. "My family managed
to build a house of our own design, I finished my MBA
program with honors (of little value at this point) and I
made six overseas trips that year. The family was getting a bit grumpy!"
Warner said.
Of
course 2008 will go down in history for another reason - one
of the biggest recessions in history was starting to take a
big bite out of just about everyone's business. "The
global financial crisis is here," Warner observed,
"and Google is clawing back revenue share in
the new contracts. DBS is one in a long line of companies,
but
|
| we are the first
company to be reassessed. The margin that was
eliminated had been used for research and
development which no longer existed.
Costs are too high. More staff and product
costs have to go." |
Another
huge change, one even closer to home, was awaiting Warner in
the summer of 2009. "After significant discussions with
the board of DBS regarding the path forward for the company
we mutually agreed that my strengths in growth and
innovation were not going to be the core of the DBS
strategy going forward, and they appointed the CFO to the
role of CEO. My seven year stint with developing
Fabulous.com and Dark Blue Sea from a start-up was over."
That
however was not the end of the Dan Warner story - it was
just yet another new beginning. "It was time again for
a fresh start," Warner said. "I had an interest in
open source development for years. The web solutions
that were being produced by Joomla and Drupal were
very exciting. I was also ready to run my own company
again. So I created an open source web development
company and merged it with an existing traditional
advertising company a friend of mine had owned for 22 years.
The result is Interweaving.com."
| "Interweaving
has been a phenomenal company experience. We have been
perfecting a manufacturing style process that produces
websites for less than $5,000 which would have cost $20,000
or more just a few years ago. It is based on an open source
content management system Joomla, and a system of |
|
| reuse that
accelerates production times. What I liked most about the
company is that I was able to interact with real small and
medium businesses and successfully launch or re-launch them
online. It combines business strategy and internet knowledge
to make a real difference and provide great value,"
Warner said. |
"We
got off to a great start and within a few months we
were producing around five websites per week. Revenue grew
to around $80,000 per month. In less than six months
we had built a business with more than $1 million in
annualized revenue. However, the business also required that
I work 16 hours per day, and stress in the early
stages was unbelievable. I inherited many of our company
staff who were traditionally trained in advertising - not as
web developers. We were trying to keep our costs down, so
equipment was scarce and we didn’t want to hire dedicated
staff until we could guarantee a viable business. Almost
through sheer willpower we made it a success. Now the
business has several dedicated web staff and processes
continually improve and gain efficiency," Warner said.
| "Interweaving
was and is still a start-up. It needs tender loving care,
expertise, and experience. It was heavily dependent on my
own expertise in business strategy and the internet but luckily,
I had taken on a partner with it from the beginning so that
should I move on to my more global |
|
|
ventures he could run it.
Last November, when Directi came along and made me an
offer I couldn’t refuse to run DomainAdvertising.com I had
a means to have my cake and eat it too. My partner
runs the operations of the business and I remain the
Chairman and provide strategic advice." |
Anyone
who has been in the domain business for any length of time
knows that it has a certain addictive quality to it. It is
an exciting place to be, there are a lot of great people to
interact with and domains are at the heart of the biggest
shift in the history of communications as traditional media
outlets moved to the Internet. Though, with Interweaving, he now had a company
of his own again, Warner couldn't resist the siren call from
the domain industry.
"I’ve
had the benefit of knowing most of the people at the top of
the domain industry. Knowledgeable guys with sharp
noses for following the money. I’m not going to name drop,
but you all know who you are. I missed you the most when I
stepped outside the domain channel for those six months (a
much needed break). Well, I’m back and life continues to
be interesting – I guess I’m not dead yet!," Warner
laughed.
There
were practical reasons as well. "I felt that I had a
lot of specialist skills and knowledge I was really wasting.
Cash flow of Interweaving and payback on its start-up costs
still weighed on me. The business was just beginning to spin
off cash. I was cognizant that as a start-up it still
represented significant risk as a venture – Internet
markets can change overnight."
|
"Divyank
Turakhia, the co-founder of Directi (with his brother Bhavin),
gave me a call to talk about what I was doing. We had talked
over the years of my potential involvement at some point
with Directi, but I had previously been dedicated to
Fabulous until it had run its course - being loyal to the
cause and company that I had helped create. I had a number
of offers from other domain companies in my break from the
industry, but nothing had felt right, or interested me
enough to break away from Interweaving," Warned added.
"Divyank
had a straight forward and compelling offer including, to name
just a few things, complete autonomy, a team of 50 veteran
domain professionals, access to over 500 additional human
resources on an as need basis, strong capital
form Directi and the Ashmore Group and I could run
the entire company from an executive office in Australia.
As
a new company of Directi, a lot of people are not yet
familiar with DomainAdvertising.com, a new parking and
traffic monetization service
|
Directi
Co-Founder Divyank Turakhia |
| that describes itself as being
"a radically innovative traffic monetization program
that works hard at delivering the last mile of revenue and
conversions, bringing sustainable value to domain publishers
and advertisers." |
|
|
|
We
asked Warner to elaborate on that and explain why Domain
Advertising was created to compete in a space that has seen
huge revenue declines over the past couple of years. "We
have entered an established market which has slowed
in development," Warner agreed. "It’s like the ice
age has come and everyone is huddling into little balls
hoping to maintain the heat in their internal core. This is
a reasonable behavior as costs have created a very cool
environment." |
"What
we are going to do is create value faster than
anyone else. We can do this because our cost benefit ratio is significantly
higher than any other provider in the industry. I would say
that the primary driver will be that we have the benefit of
such a vast array of talent and experience at a
fraction of the cost of western cultures (most of Domain
Advertising's staff is based in Mumbia, India) - with
little opportunity for competitors to replicate our
position. We have an army of innovators.
A
mouth watering chocolate template from Domain
Advertising.com's landing page collection.
Warner
added, "Domain advertising and the industry will reach
a tipping point.
Domain owners should send their traffic to the best
provider for every individual domain.
Providers win traffic by being able to provide one
cent more than the other available providers at any
given time for any given domain.
Cutting costs, as most domain channel providers have
done in recent years, only allows them to be able to afford
giving the domain owner that extra cent for a little longer.
In the long run their lack of innovation and cost
cutting will bring them to a point where there is no
longer a cent to give. Then
they no longer have a reason to exist."
|
"We
are happy to compete on revenue on a domain by domain basis,"
Warner continued. "We will stand toe to toe with the
competition and try to out-innovate them to fight for your
traffic. In the nature of diverse systems we won’t be the
best solution for every domain name, but we are confident
that a strong share of the market will fall to us."
An
interesting factoid - Warner's formidable Army is as young
as they are talented. Believe it or not, of the 600 people
at Directi, Warner is the oldest despite being just 43 years
old himself.
In
closing Warner shared this final observation with us.
"Richard Moore once told me, “You’re a weird guy,
but that’s OK as this is a weird industry."
I didn’t miss the irony in his comments. In an age where
the Internet has redistributed wealth to Internet
entrepreneurs at an astonishing rate (making them 40%
of all millionaires) – It seems that the
geeks may inherit the earth after all."
|
Warner
allowing his head to be shaved at T.R.A.F.F.I.C.
Down Under in Nov. 2008
to raise money for cancer research. |
*****
Return
to DNJournal.com Home Page |
