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August 17, 2016

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Rising Star: How 27-Year-Old Warren Buffett Disciple Daniel Negari Is Building an Internet Empire 

By Ron Jackson

Few  27-year-olds have enjoyed as much entrepreneurial success in multiple fields as Daniel Negari has. From online retail sales to financing high end real estate to buying and selling premium .com domain names to running his own new gTLD registries (he recently received ICANN approval to operate the .xyz and .college extensions), Negari has been on a mind boggling winning streak since his early teens. Five years ago BusinessWeek magazine picked him as one of America's Best Young Entrepreneurs and he has been proving the them right ever since that article came out.

One of the remarkable things about the California native who now lives in Las Vegas is that his entrepreneurial drive was triggered by a financial disaster that occurred while he and his family were celebrating what should have been one of the most joyous occasions of their lives - Daniel's bar mitzvah. "That event defined who I am today," Negari told us. "This coming of age and responsibility hit home when my 

Daniel Negari with legendary investor Warren 
on a visit to Omaha
during Negari's college 
years at the University of Southern California

family hosted a very large party to celebrate my Bar Mitzvah with around 300 friends and family. I was graciously given $50,000-$100,000 in gifts. The next week I was home alone when two people broke into my parents home and stole everything. In addition to my parents’ jewelry and valuables, all of my  gifts, gold and even my Playstation 2 were taken. This was a big turning point for me, as I felt responsible for losing my family’s valuable possessions."

Negari said, "From that point forward, my risk tolerance went through the roof and I decided to live my life like there was no tomorrow. I was not afraid of anything, and continue to live my life under that mantra. Over the years, I have learned to take calculated risks and hedge my bets by managing them carefully. Thankfully, most of my risks have paid off in spades." 

It seems risk taking could also be embedded in Negari's DNA. His parents immigrated from Iran to America in 1979 because of the Iranian Revolution and the rise of Ayatollah Khomeini. They were forced to leave everything behind and start a new life in Los Angeles's famous Beverly Hills community. Part of the hit TV show Beverly Hills 90210 was filmed at Daniel's elementary school and he also went to Beverly Hills High School. 

Entrepreneur Daniel Negari was born 
to run
and he has
n't slowed down yet.

While Beverly Hills is known for its wealth, the Negari family had to start from scratch. Negari noted, "My parents got married in Los Angeles and I am proud to be a first generation American. Growing up with an upper middle class background and watching my parents build their lives - starting out in an apartment and eventually buying a house - showed me that if they were able to move to another country and be successful, then the bar was set much higher for me since I had more advantages growing up. My parents always demanded more from me. I always knew that anything was possible, which has molded my mindset as an entrepreneur. "

"At 8 years old, I really wanted to go to the Six Flags Magic Mountain amusement park," Negari recalled. "My parents declined my request and told me if I wanted to go, I could make my own money and go. So I did. I worked for my uncle for a weekend and he paid me $32, the price of a ticket. "

"At 12 years old, while most of my friends traveled over winter break, I decided to stay home and get a job at a computer store. I then started my first venture and needed a URL to market my service which was building custom made computers for friends and family. That was when I registered my first domain name, GetAPCNow.com (as in get a Personal Computer now), which I ultimately let expire (more on that later)."

"At 13, when I started high school, there was a job board where local businesses posted positions available to high school students. I was interested in earning some money, so I applied for a job at Crystal Cruises, a cruise line. I worked there every day after school (across the street in Century City) doing data entry and filing. Computers were natural to me, so I was able to process gift orders at least ten times faster than any of the full time employees there. In order to do this, I had to get a work permit from school. This was one of my first experiences dealing with bureaucracy," Negari smiled.

The next year, at 14, Negari was ready to go into business for himself. "I learned about the Black Friday sale at Best Buy and camped out so I could be one of the first to enter the store. I had recently obtained my first credit card, which my mom cosigned for me. I was making money at Crystal Cruises and I was looking to generate a return on my cash. This was the perfect opportunity -  I bought a truck full of electronics worth $100 per item for $20, then sold them for $50 on eBay. I did this for three years in a row until the eBay market got too competitive and I couldn't make enough of a return," Negari recalled.

"At 15, I had a friend who worked at Foot Locker and shared his 50% discount with me. I would buy retro basketball jerseys, which were in style at the time, and pair them in with headbands and wristbands, then sell them online. Using my marketing skills, I would attract people from all over the world to my listings. I would buy an $80 jersey and a $7 headband for $43.50 and sell the set for an average of $150. This experience showed me the true value of marketing," Negari said.

While still in high school, Negari took a quantum leap ahead. He told us how it happened. "My mother was working for Bank of America as a business banker and also handled real estate loans. I saw how hard

Destined to "fly like an eagle" Daniel Negari (bottom) 
soaring with skydiving instructor on a recent jump.

she worked and how focused she was on succeeding, and it really helped solidify all of the lessons from earlier on in my life about hard work leading to success. She introduced me to a local real estate broker around the age of 16 or 17, and I offered to teach him how to use computers more efficiently in return for him teaching me the mortgage business. Before I had even finished high school, I was already finding success in mortgage brokering, and had earned upwards of $20,000 in a month," Negari said.

"While in high school, I also enrolled at Santa Monica College and took classes to get a head start on college. I went to SMC for one year and accumulated 66 credits, including the night classes I took while in high school. I then applied to the University of Southern California (USC) and New York University, but because USC boasted a top ten entrepreneurship program and I intended to start my business in the LA area, I chose USC. "

Daniel Negari (at right) during his college years with friends 
at the Los Angeles Memorial Coliseum watching his
beloved University of Southern California Trojans play.

"At USC, I had the opportunity to meet many mentors and some of the best professors in the world, such as Paul Orfalea, the Founder of Kinko’s. USC also allowed me to fine-tune my raw entrepreneurial instincts and skills, and taught me the valuable lesson of learning from other people’s mistakes. I was also an advisor of the USC Entrepreneurship Club, where the President and I successfully convinced the Dean of the business school to sponsor an E-Club trip to Brazil, where I got to participate in some philanthropy efforts, as well as meet with top Brazilian business executives, such as Hans Stern, the founder of H Stern," Negari noted.

"Also through USC I was also able to meet legendary investor Warren Buffett on a trip to Omaha, Nebraska. I had several meals with him, which I used as an opportunity to pick his brain about investment strategies and ask for advice about business and the world. I even watched him, in very Warren Buffet style, pick up a penny of the ground and say, “this is to my next million!,”  Negari smiled.

USC faculty also took note of the budding entrepreneurial star in their midst, giving Negari the prestigious USC Networking Award in 2006. It is an honor that had been reserved for MBA students in the past but for the first time the university bestowed in on the young undergrad by unanimous decision. Negari also received USC's Technology Scholar Award, which was awarded to one student out of the entire USC undergraduate population. He was even called upon to co-teach a class on Technology Entrepreneurship while still in school. 

Negari said "It wasn't all success though. I remember receiving a C on a business plan I prepared for one of my classes. This experience taught me that in the real world, even when you work your hardest and think you did everything right, things do not always work out as expected. The important thing is how you bounce back and respond. "

Negari also got a good lesson in branding at USC where he was a “Founding Father” of the Beta Theta Pi fraternity. "As a new organization on campus, I helped shape the culture of the house," Negari said. "We took on the challenge of not only creating a brand for ourselves to stand out from our peers in well-established houses, but also competed for, and won, some of the brightest and most successful students on campus to join our organization. I was able to develop a number of 

Daniel Negari with his sister Charlene

longstanding relationships from this experience, and even hired two of my fraternity brothers to help me launch new gTLDs .xyz and .college." 

When the new millennium dawned and the early 2000's go underway, Negari was working at a real estate company and helping them with their computers. "I began doing loan processing during the refinancing boom and eventually got my real estate license and began brokering loans" Negari said. That produced a solid income that let him turn a business plan he had written in college into a reality.

"The plan was for Beverly Hills Mint - a real estate brokerage firm," Negari said. "I had so many credits that two years into college I was only one year away from graduating. So I went part-time at USC and filed the articles of incorporation with the State of California for Beverly Hills Mint - my first real company. In 2007, I was able to hire the person I trusted most - my mother. While in real estate, I bought several properties and even had my own 30-minute show in the TLC Network's Flip That House  series."

For his first real business Negari also wanted his first high end domain name. Negari recalled, "I bought Mint.net for Beverly Hills Mint on SnapNames, and I tried to buy Mint.com from the then-owner. I offered him $20,000, but another startup called MyMint.com bought the domain name and built a business, which they eventually sold to Intuit. While running a booming real estate company, I was making great money and again needed to invest it somewhere. Domains were my solution," Negari declared.

"During this time, I had continued to buy and sell domain names as a hobby and my interest in the internet increased more and more. I always knew that domains were my passion, but early on I didn't have the capital I needed to really make a big push. Over time, my investment capital grew and I began to shift more of my energy into the Internet world. I eventually sold my

ownership stake of Beverly Hills Mint to my mother to focus on my new baby, Cyber2Media.

One of taglines for Negari's new company is "Cyber2Media - we’re the the company behind the 

company, suggesting they are a force you may not have heard a lot about but a force none the less. Negari concurred, noting, "At first glance, people generally do not have much of an idea about our size, however, we have a team of about 30 individuals and we are steadily growing. "

While Negari's focus became fully locked on the virtual world in more recent years, he said the seeds for his domain passion were planted years ago. "As a kid I collected, bought and sold basketball cards," he recalled. "This helped me to internalize the concept of supply and demand. In 7th grade, as I was beginning to start my first entrepreneurial business, I tried to register a good domain name and everything I could think of was taken! This was around 1998 or 1999 and I remember being in the computer lab of my school trying to find a domain name that I could register. I sat for hours manually looking up every three letter .com I could think of and none of them were available. I eventually settled on GetAPCNow.com, which became a successful custom computer company. The lesson that really stuck with me was there was a strong demand from entrepreneurs, and certainly others, for quality domain names, but there was a scarcity in supply."

Daniel Negari behind the wheel during a yacht cruise 
along the French Riviera at the 2008 SedoPro Forum

"At the time, I was largely a user of AOL, which as a tween in the 1990s seemed like the entire internet," Negari said. "Since .coms were expensive, I had the idea of registering AOL/AOL Instant Messenger screen names, which I could do for free. Eventually I had around 900 three-letter screen names and several thousand generic screen names.  I would sell these on eBay or by convincing people who messaged me on those names that they were valuable enough to buy."

"Years later, when I still had no understanding of the world of expiring domain names, I was curious what had happened to my first domain registration, which I had let expire. I found that someone else had registered it and built an entire business on it. But luckily, this inspired me to take a look at the world of expiring domains. I found SnapNames.com and TDNam.com and started dabbling in the purchasing of 

old domain names. This started while I was in college around 2006 - just before I met Alan Ezeir, the .WS co-founder, and Greg McLemore, the founder of WebMagic. Meeting them changed everything," Negari declared.

"Back in College, I had joined a group called SCEA - Southern California Entrepreneurship Academy. SCEA was run by Maureen Ford and consisted of some pretty powerful alumni, such as Bob McNight, the founder of Quicksilver, Alan Ezeir, the founder of .WS, and Greg McLemore, the original domainer and founder of WebMagic, Pets.com, Toys.com and many, many more. "

"Meeting them in person and hearing their stories gave me the confidence to know that I could do it too. I remember when I was at Greg’s house once, Alan mentioned that he had met with the King of West Samoa and had made a deal to acquire .WS. The analogy between real 

estate and domains had always been with me, but this brought it to the next level. I immediately researched other country codes and even tried to find a country to buy to acquire my own extension. I was never able to get my own ccTLD, but luckily ICANN began their new gTLD initiative. Soon I will get something better than my own country - .xyz!"   (Editor's note: Negari was the only applicant for .xyz and has been granted that TLD. He then won an auction to operate .college and also hopes to win the rights to operate .now which is still in contention).

Negari noted, "Although I’ve acquired many domain names, I think what I’ve really excelled at is building brands and marketing. With the right branding and marketing approach, an already-valuable domain can be made many times more valuable. Still, a list of my best acquisitions would have to include XYZ.com, Driving.com, BestHotels.com, Degree.com, Ringtones.com, PHD.com and many more. "

Negari added, "I have a special affection for PhD.com, Degrees.com, and CommunityCollege.com which were part of the inspiration for me going after the .college extension. These top tier education domains helped me understand the large demand of education-related organizations for an online presence. Similarly, I have a special attachment to XYZ.com, as it was some of the inspiration behind .xyz. "

Daniel Negari under the giant neon-lit .xyz guitar 
at Cyber2Media headquarters

Negari explained why he thinks .xyz is a string that he can make successful despite competition from hundreds of other new extensions expected to be released in the months and years ahead. "It started with what I originally envisioned for XYZ.com," Negari said. "I saw it as a diverse web services company, offering domain registration, website design and build out, and hosting services. When I learned about the new gTLD program, I was extremely excited as I had always wanted my own TLD. I even gained experience managing a domain 

extension by  launching .com.de with CentralNic as a third levelregistry, which was very successful. So, I considered a number of possible TLDs, but in the end I believed that .xyz, .college and .now were the best positioned for success."

".xyz is a low-cost, high-volume domain extension that is neutral, memorable and truly for everyone.  .xyz gives users the most amount of flexibility out of any domain extension because it has no built-in meaning or connotation like every other option out there. This gives people the freedom to build a platform to express themselves, share their knowledge, and innovate without being limited by a label. Just as important, it carries with it instant familiarity. .xyz has received a great amount of interest overseas because of this, since people recognize XYZ and understand the value of having a English extension, but may not actually speak the language," Negari said.

Of course,  as a veteran domain investor Negari knows that many of his peers believe that new gTLDs have little chance to make inroads against the incumbent champion .com. To that Negari responded, "I think that we need to move away from using .com as a measuring point of success for a TLD."

".com came along at a special time in the life of the internet and that time will never repeat itself. We are living in 2013 and should be judged by 2013 standards. Similarly, at the end of the day, each registry has to be based on its own standard of success. I don’t expect to overcome .com instantly or even within the next 10 years, but my lifetime goal is to 

Daniel Negari (far left) with friends at the 
June 2009 ICANN meeting in Sydney,  Australia

provide internet users with competition and choice with .xyz. I hope to give internet users a better option and an opportunity to stake their ground in .xyz . It might take me 50 years, but thankfully I am a healthy 27-year-old and I have at least 99 more years to accomplish this goal!," Negari smiled. 

Negari added, "It is also important to remember that a TLD does not need to be massively popular in order to be successful. It is largely about perspective. From the perspective of a domainer who may only care about ratios between the costs of acquiring domains, the traffic they receive, or the amount they can be sold for, a high degree of popularity of a domain is quite important. However, from the perspective of the owner of a registry operator, it is more a matter of comparing yearly costs to yearly expenses and about providing a quality service and namespace. For consumers, it is really just a matter of getting the name they want at a price they like.  For me, I have to focus from the position of the registry operator. "

"Internet usage is still growing exponentially. We no longer talk about just the U.S. and Europe. Emerging economies are a remarkable rising tide for the internet industry. This is especially true in areas like Africa, which have extraordinarily young populations when compared to the established western-dominated internet. This substantial growth means that that there is space for a number of winners," Negari said. 

"The youth of the growing internet population means that there will be an openness to change that cannot be underestimated. Instead of the same old focus on .com, I think choice will reign as the new standard. Additionally, 

the growth in mobile phone usage requires short domain names for easy navigation. Our preliminary tests show that registrants prefer a 8 character or less .xyz over a 3 or 4 word .com domain - 8 out of 10 times ."

"As far as .xyz specifically is concerned, we are confident that registrants will respond to its affordability and mass-market appeal. So far, we have received great responses and attention from registrars and registrants. Combining the natural appeal of the domain extension with the extensive marketing and brand awareness efforts we plan on putting into the domain extension, we’re confident that people all over the world will soon sense that domain names simply should end in .xyz. Readers can pre-register a .xyz domain name at www.xyz.com. For information on which major registrars will be carrying .xyz, visit www.xyz.com/registrars," Negari advised. 

Daniel Negari (far left) and friends at the Atlantis Resort in the Bahamas 
for the March 2011 Domain Roundtable conference

With respect to the new gTLD program as a whole Negari sees it unfolding in this way, "It will have many successes and even more failures," Negari opined. "Obtaining a domain extension is only part of the challenge. The most critical component for success is the operator. Many large gTLD applicants simply have too many domain extensions to market and I believe this will leave a lot of poorly thought out and poorly executed marketing plans, and ultimately a large scale flop. Some other applicants do not have much experience in the domain world and may not have the knowledge of what it takes to succeed. "

"Historically, Verisign has dominated the world with one domain extension, .com, and they barely market at all. This is because the world has adopted .com so the user demand is built in. For new domain extensions, the demand will need to be built because it is not inherent for most extensions. It will be interesting to see if ICANN decides to use some of its $300 Million+ war chest to drive public awareness to new domain extensions, as this would increase the success rate for new gTLDs," Negari said.

With a steady hand on the wheel Daniel Negari is
looking forward to what the next 27 years will bring.

In closing Negari noted, "I am the youngest new gTLD applicant. I am proud about being a part of Generation Y and the innovative changes that my generation has brought to the internet. XYZ will be a disruptive force in the domain namespace, and we have created the concept of “Generation XYZ” to express this force. We are giving all generations, including Generations X, Y, and Z a chance to explore the limitless potential of the internet. We are creating a new, integrated Generation XYZ. As an unrestricted platform, .xyz will help facilitate the next generation of internet users and creative minds to exchange information and express themselves."

While many will continue to have their doubts about new gTLDs, you don't have to know your ABCs to know that when a relentless and experienced young entrepreneur like Daniel Negari sets his mind to it, people might end up knowing their XYZs as well.


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