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April 03, 2014

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Life in the Fast Lane: Rick Latona Got a Late Start But He's Quickly Closing In on the Competition 

By Ron Jackson 

Over the last few years the domain industry has been going through a consolidation stage in which bigger fish have swallowed up smaller ones, creating industry conglomerates like NameMedia, Demand Media, Oversee.net and Thought Convergence. With venture capitalists pumping tens of millions of dollars into the space, it seemed obvious that the game was over for self-financed entrepreneurs with dreams of grandeur. They couldn't possibly compete against the new domain industry behemoths. Apparently Rick Latona never got that memo.

Even though he didn't go full time in the domain business until 2007 the 37-year-old serial entrepreneur from Atlanta has turned the old order upside down. He has built a conglomerate of his own that ranges from domain financing (DigiPawn.com) to direct domain sales (through his Daily Domains Newsletter) to online domain auctions (presented by the Latona's Domain Brokerage and Auction House that just launched at Latonas.com) to live auction sales (starting in January Latona will become 

Rick Latona

the exclusive auction provider at all T.R.A.F.F.I.C. conferences, elbowing Oversee's Moniker.com aside) to personally staging the industry's original domain show (under a partnership agreement with T.R.A.F.F.I.C. Co-Founders Rick Schwartz and Howard Neu, Latona will produce five of the six T.R.A.F.F.I.C. conferences in 2010). Thanks to him I just had to write the world's longest run-on sentence.

When he is not engaged in the business of domains, Latona is busy writing about it in a blog at RickLatona.com. You might say he is the Tasmanian Devil of the domain industry - a whirling dervish who seems bent on devouring everything in his path. While Latona is a very personable guy he wears ambition on his sleeve. Latona told me, "People that work for me often hear me say, “This ain't no social event”. It's a phrase I learned from my father. I'm not here to make friends. This is serious business and I expect nothing less than the best and to be the greatest. Going big is the only way to go. I'm a failure if we finish in second place."

Latona's take no prisoners attitude can be traced all the way back to his childhood. His story begins in New York City where he was born in 1972. His mother, whose maiden name was Linda Faye Grayson, was an educated woman (the daughter of a career Marine) who devoted her working life to the Girls Scouts of the USA. His dad, Richard, was Linda Faye's opposite in many ways. The New York Sicilian had dropped out of school and was working as a funeral director when he met Linda Faye. "I'm not sure what they had in common when they met - but I'm glad they did!" Latona said. Richard would end up finding a new business calling and having an enormous impact on what his son Rick would decide to do with his life.

1988 Family photo (left to right): Rick's father Richard, mother Linda Faye
paternal grandfather Lawrence, a 16-year-old Rick Latona and sister Dee-Ann.

"When I was around 8 years old we moved to Florida," Latona said. "The plan was to stop when one of my parents found a job. My mother got a job first at the Heart of Florida Girl Scout Council in Lakeland so that's where we set up shop. My father eventually found work at Lakeland Ford, a car dealership where he proceeded to kick butt as the top salesman month after month, year after year. I basically grew up in the car business. He went on to open small car lots and held various management positions at dealership after dealership. He was extremely good at his job and I idolized him for his sales abilities."

"I knew from the beginning that I wanted to be a businessman. For instance, my earliest memory of my father was when he came home one day, really excited and told my mother he sold six cars. I was so happy for him and thought about it often," Latona recalled.  

Though Latona knew what he wanted from a very early age it took a long time to figure out exactly how he to get it. "I don't remember ever not expecting a lot of myself," Latona said, "but this quality was both a driving force 

Latona at age 11 - 1983 school photo 
from Lakeland's St. Paul Lutheran School 

and a curse. I was more than a little too full of myself, cocky and conceited. That's probably why I'm still a little cocky and conceited today. Old habits are hard to break! Please don't take that to mean that I have always been driven though. In fact, the opposite is true. I was full of myself in my own head but did little to accomplish anything."

"I don't remember ever doing my homework. I thought my teachers weren't smart enough and fought them every step of the way. I changed schools many times as my mother tried to find a system that would fit me. In the end, I quit school on my 16th birthday, the day I was legally allowed to quit. I still remember my friends telling me that I would end up pumping gas for a living. That never happened, but that may be because people don't pump gas for you in the States anymore except in very remote places!" Latona laughed.

"My early adult years were trying though. I found myself uneducated but with high-hopes for myself. I partied a little too hard when I was younger. Almost any picture I could find of myself I had a cigarette in my mouth and a mullet in the back of my head. I lacked focus and continued with the same bad behaviors that had dictated my life up until that point," Latona said.

A turning point finally came when he was 19 and still found himself to be "basically a screw-off." "I was having one of my moments where I was talking about how I would be someone one day and one of my friends said, “Rick, you always say that but here you are sitting on my couch”. I looked up at him, went silent, stood up and walked out."  

Rick Latona at 18

"I was sincerely determined to not just talk about being someone but do something about it. I needed help though and didn't know where to start. I went to a book store and purchased The Psychology of Winning by Dr. Denis Waitley. The book, originally written for professional athletes, basically has this tone - winners do this, losers do that, winners do this, losers do that, winners do this, losers do that..."

"The book had a profound impact on me," Latona continued. "After reading it I started consuming other books, one after another. I became obsessed. I stopped listening to music because I could listen to books in the car. I wanted to read as many as I could get my hands on. Over the next years I went from being completely uneducated to what must have been an equivalent of an MBA degree. In a five year period I consumed more than 1,000 books, all related to history, sales, management, negotiation or other useful subjects. I also taught myself Spanish."

Latona started his business 
career selling everything from 
peepholes to Christmas trees!

"During that time when I was reading everything I could get my hands on, a fire was lit in me," Latona said. "I started working hard but again, I didn't really know where to start. The first business I came up with was door-to-door peephole sales. I had the idea while selling coupon books for a company, one of the only jobs I ever had working for someone else. I used to stand in front of the doors thinking about the perfect facial expression to have when they opened the door. Naturally, I would think about whether they were looking at me through a peephole. I figured that everyone who didn't have a peephole wanted one so I bought a drill, half inch bit, extension cord and a box of peepholes! I paid $1 per unit at the time and sold them for $20 each. I thought I was rich when I sold five of them the first day but I cracked someone's door on the second day and had to shut down the business!" Latona smiled.  

"The next thing I got into was a christmas tree lot. Man that was hard work. I bought 250 trees from a wholesaler, rented a building and carried all 250 trees in and out of that building every day; progressively less trees each day of course. It was very fulfilling work. I miss the smell more than anything. Opening the door of that building in the morning with a couple hundred trees in it was a smell that one could never forget. I can tell you everything you'd never want to know about Fraser Firs, Douglas Firs, Nobles and Pines."  

"The next business I tried was the first one to really take off for me. Yard sales! Seriously. It started when my parents let me sell the junk in their garage that they would never want again. I sat outside all weekend and made $600. That was so much money to me at the time!," Latona recallrd fondly. "I told myself, why not do it every weekend? I had one problem though, inventory. It was then that I first believed in myself that I could buy things cheaper than other people could. Then through sheer effort 

and honing my skills that I could sell the stuff for a profit. In other words, I realized that when dealing with flipping pre-owned inventory, the money is made when you buy it right. It'll sell for whatever it is going to sell for. This core theory runs my domain enterprise to this very day," Latona said.  

"I bought a junky old Chevy cargo van and went to work. I got up at 3am every morning, went to the newspaper distribution center to get that day's first copy, scanned it for yard sales, mapped out a route based on their published starting times and showed up to the first one 2 hours early. I would bang on their doors and when they answered I would say, let me see what is in your garage. Maybe I'll give you $100 for everything, you can forget about sitting outside all day and take your wife to the beach instead. Many people went for it. I started buying 3-5 van loads worth of stuff every day!"

"Three months into the operation I had two employees. a warehouse and a retail strategy. We would rent a different house every weekend to sell the previous weekend's booty. We'd load up every room in the house and make it look like a family had been there for 40 years and was just selling all their accumulated junk. We'd place ads in all the papers saying “Divorce, Moving, Estate Sale – every thing must go” and put up signs on every corner for a 5 mile radius." 

"When Saturday morning would come we'd have customers lined up down the street as far as you could see. I would tell them the sale would start at 8 am (no early birds) and we'd wait until 8:30 am. I'd come outside and say “Listen everyone, you can't pick anything up unless you are going to buy it. We will not negotiate for the first 3 hours. First person to pick up the item buys it." Our average sales by noon each Saturday was in excess of $5,000. It was an enterprise," Latona said.

"Six months into it I had a 10,000 square foot warehouse packed with $10,000 in inventory. Something was wrong with that math. Next door to my storage facilities there was a pawn shop. The owner wouldn't open the doors until noon and every day when he opened he would have a line of people waiting to do business with him. I realized that he had the same $10,000 in inventory in a single showcase and never risked a back injury trying to sell a gold necklace."

"So, I bought a pawn license and started Cash Depot, Inc. Three years later I sold that business for $250,000. It all started with that $600 made at that first yard sale," Latona noted. "While in the pawn business I was buying something, selling something or loaning money to someone every 20 minutes. I will always consider that the best negotiating training one could ever have."  

While Latona had now become the businessman he had always envisioned being, he still had another giant leap to make - from brick and mortar to the Internet. We asked him how that came about.

"In the mid-90s, two things happened which opened my eyes to the potential of the Internet   business," Latona recalled. "The first was Dell Computers announcing that they did $1 million in sales in one day on the net. The second would have been Netscape's initial public offering in 1995. Their stock price was set at $28 but was at $75 by the end of the first day of trading. I remember clearly reading about it in the Wall Street Journal and I bought a computer the next day, downloaded Netscape and didn't leave the spot for some time. I spent the next month or so reading white papers published by major tech companies and immersed myself in the technologies at play."

"Around that same time, my family used to operate a company called Telemedia Technologies which was essentially a lead generation business for car dealerships like 800-Car-Loan where people could call and apply for a loan with their touch-tone phone, regardless of their past credit history. Like Rick Schwartz and National A-1 I recognized the value of domains through their vanity purpose immediately because of my experience in computer telephone and interactive voice response."

Latona also credits his sister Dee-Ann for his early discovery of what the web had to offer, though he now wishes he had not listened to everything she had to say. "She's the real reason I got in the technology business and while I blame not being bigger in domains than I am on her, I wouldn't have been in the internet business at all without her. She met her husband over the internet in the 1980s. Yes, you read that right. In the 1980s. I'm talking about way before Tim Berners-Lee came up with the hyper-text concept and markup language (html)," Latona said.  

"While at Penn State Dee-Ann hung out in IRC chat rooms, used GOPHER and other now antiquated technologies. Before then, when we were kids in the same house, she was always typing away on her Commodore computer writing a novel at 16 while I was sneaking out of the house. Her husband worked on the Linux core with Linus Torvold. They are the real deal, seriously old-school internet pros that are experts in Open Source technologies. My sister has written dozens of books on Linux and speaks at their conventions. Her blog can be found at http://www.dee-annleblanc.com/."  

Author Dee-Ann Leblanc
(Rick's sister)

"In 1995 I had the brilliant idea to register a crap load of domains to sell later on. My sister chastised me and told me not to do it. She told me that companies like Johnson and Johnson who registered a lot of domains were thought of like cyber squatters and people wouldn't respect me if I did it. She was very passionate about it and I didn't know any better so I listened to her. This is the same girl that told me not to put advertising on websites because it makes them cluttered. I listened to her!," Latona said ruefully.

"Don't get me wrong - I have nothing but mad respect for my sister, but oh the regrets! We've all heard people talk about if they only knew then what they knew now. The problem is that I knew then. I had the beat on all of the biggest domainers but didn't act. It's because of this that when I had the chance again, I acted with such a vengeance so I could force my way into the big-time."  

Latona continued, "In 1997 I decided that I was going to become a famous internet business person or die trying. I packed my bags and left Florida for the Silicon Valley. The problem is that I never made it that far. I stopped in Atlanta to visit some friends and one of them introduced me to the guys that were starting Interland, a hosting company for small and medium businesses. I interviewed with them and was brought on as one of the first people, then director of sales, then VP of Sales and later I was issued founder's shares."

"Your old school readers will probably remember the Interland magazine ad (at left) because it was plastered on the back cover of every internet related magazine in the 90s. The farmer was clip art and we photoshopped in the earth in his bucket," Latona said. "The funny thing about that ad is people used to call us and tell us, I don't have a website and I want one, what do I do? We would have to tell them, let us register a domain for you first, then we'll setup hosting and recommend web designers for you.

It was then that I realized that getting a domain was the first thing people had to do in order to get set up."  

"Everyone was starting hosting companies back then but while I was leading the sales department, Ken Gavronovic, the CEO,  told me if I increased sales by at least 15% over the previous month, he would give me 1% of the sales total and never cut my pay. As soon as I increased sales by less than 15%, we would renegotiate my pay. I NEVER missed my goal. The first month we did $30,000 in new business. Two years later we did $3.5 million in new business in one month. The board eventually moved me to Amsterdam to run European operations. They had told me that they could no longer keep paying me 1%, I told them that if they tried to cut me I'd leave, or they could give me Europe. I got Europe."

"It was at Interland that I became an “infrastructure guy”. Meaning, while helping run a hosting company, I realized that it is better to sell pick axes during a gold rush than look for the gold. The Interland experience is directly related to Latona's Domain Brokerage and Auction House."

"By the year 2000 the hosting business was dominated by two companies. The biggest was Verio, a roll-up - meaning a company that was big because they bought lots of other smaller companies. The second biggest was Interland, with over 600,000 customers and we got each and every one of them the hard way, organically. We advertised a lot and I had a vicious sales department under me that closed deals at a very high percentage," Latona said.  

Latona should have been set - but another thing he learned is that there are no certainties in life. "Verio sold to NTT Telecom for around $5 billion," he said. "At Interland we turned down offers and eventually went public right while the Internet bubble was bursting and finally, by the time my founder's shares lock up expired, my stock was worth very little. We did everything right at that company to go public but never once talked about who we were going to be after we went public. After a series of unfortunate events, the party was over and it was time to leave."  

Latona recalled one major domain related event that happened during his Interland years. "I took a trip to Singapore in 1999 for the very first ICANN meeting where they talked about breaking up the Network Solutions monopoly. Interland at the time was registering 70,000 domains a day for our customers (from NetSol) at $70 per domain and making nothing on it!"  

When Latona left Interland after the IPO in early 2001 he wasn't sure what he was going to do next. A chance meeting wound up determining that. "While analyzing opportunities, I ran into Marc Womack who used to work with me at Interland," Latona said. "He had started a site called Consumption Junction in 1999 which had really taken off. The Alexa ranking on the site at the time was somewhere around 400. CJ was a shock site with sexual and violent content. I'm not particularly proud of Consumption Junction but it has to be talked about because it is part my story."  

"The biggest business mistake I ever made was my handling of that company. Someone once said that if the railroad companies realized that they were in the transportation business and not the real estate business, we'd all be flying Union Pacific Airways. At Consumption Junction we were an entertainment company and a video distribution company. At its core, it was YouTube years before YouTube.com came out. It should have been me selling the company for a billion dollars. Instead, 
YouTube.com came out and quickly ate away at our market share until we eventually sold the domain for scraps," Latona said.  

"I focused too much on the entertainment aspect of the company and not enough on the video distribution part of it. I should have launched a family friendly version using our platform and traffic base. Another mistake made. What was supposed to be me working as a consultant for Marc, helping him with Consumption Junction, turned into it being all I worked on for the next three years or so. In some ways, I consider that time the least productive years of my life."

As it would happen, that fallow period for Latona would soon be replaced by a run that has been remarkably productive over the past five years. He was about to take another turn - one that would lead him to a position of prominence in the domain industry. 

Latona set the stage by noting,"I had picked up a few choice premium domains in 1997. The first of which was Spanish.com, which I paid $5,000 for. I was trying to learn Spanish at the time and I thought it was an interesting business because you could create the learning program once and then sell it over and over again. That same year I bought Portuguese.com from Larry Fischer. Of all the people I know in the domain business, I started talking to him first. I ran into Rick Schwartz two years later at an unrelated convention in 1999."

"I started getting serious about the domain industry in 2004. I listed Spanish.com for sale on Rick Schwartz's message board and Kevin Ham bought it from me for well into six figures. I can honestly tell you that in 2004, I still didn't know what domain parking was. I typed in the domain after Kevin bought it and saw the HitFarm page he pointed it to - that's when things started to click!" Latona said.  

"That's when I launched DigiPawn.com. I actually started it with the same money that Kevin paid me for Spanish.com. Regardless of 

Dr. Kevin Ham - his 6-figure purchase 
of Spanish.com gave Rick Latona the
capital he needed to make a big
splash in the domain industry.

what some other competitors might say, I was the first to loan money on domain names. Later on that same year I went to the first T.R.A.F.F.I.C. event in Delray Beach and I was officially in the domain business."  

"When I started DigiPawn it was really about earning interest. I didn't know much at all about the domain business at the time. I was constantly calling people trying to figure out what to pay for names or how much I could sell them for. I sold names like Yo.com for $70,000 because I didn't know any better," Latona said.

"Even with DigiPawn fully up and running, domains were still only a part time effort for me. If you can believe this, it wasn't until 2007 that I went full-time on domains and started focusing every waking minute. That's when Ryan Steel and Toby Clements started working with me. Ryan would develop the names and Toby would help me buy the names. With Toby as my partner we hired a dozen full-time buyers we called Bounty Hunters and started hitting up everyone in the world that owned premium domains trying to buy them as cheap as we could to flip for a profit."

"We bought a lot of domains. I'm not sure that anyone bought and sold as many names as we did in 2008. That's got to be the reason my peers voted me Domainer of the Year that year. In February 2008 I started the Daily Domains newsletter as an outlet to move the inventory. We were trying to sell the names as fast as we could so we could get the capital back and invest in other names."

"I hadn't intended on getting into the auction business but I was always begging Moniker for a lot of slots in their auctions and not always getting them. I felt it wasn't fair because I knew I was bringing a lot of fresh inventory to the table that was priced to sell. When Rick Schwartz announced that he was going to allow multiple auction companies at the T.R.A.F.F.I.C. events we saw our chance and jumped on it." 

"My company is a lot more like Interland these days. I am now in the domain infrastructure business. My goal is to provide capital for domainers and help them sell their assets for as much as they can. None of what we were doing in 2008 applies now. Those days of bounty hunting are over. My team and I picked most of the low hanging fruit, although there is still some fruit on those trees. What started as a way for me to sell names, turned into a method for me to sell names for other people."

Latona with the Domainer of the Year 
he received in 2008

Latona may have entered his current business almost by accident - but that doesn't mean he isn't totally dedicated to being the top dog in it now that he is here. "Business is war," Latona said. "It isn't just about marketing and sales. You need a battle plan. How are you going to flank your enemy? What's your surprise attack? These are the questions I ask myself. I've read far too many history books and business case studies to look at it any other way."

"I realized immediately that the trade shows were the distribution platform for the auctions. Cutting a deal with Rick and Howard would be like Pepsi eliminating Coca-Cola's ability to deliver the drinks to the stores and restaurants. It was an expensive and risky move but I'm confident it'll go down in history as one of the best tactics I've put into effect."

"When all is said and done, Latona's Domain Brokerage and Auction House will be a complete consolidation of my domain related enterprises and will likely expand into other forms of intellectual property, be it copyrights, patents or what-not. We've gone through great effort to showcase domains like the priceless assets they are on Latona's. We even do original works of art to represent each name."

"I have five full-time, very expensive Java programmers building enterprise class software to run the system and I promise to never cut back, only to add to the programming resources. Latona's will be an ongoing effort with continually compounding technology which will become the center for trading domains. I can't give away too much of my plan now but everyone should just watch and pay close attention. It's going to get interesting," Latona promised. 

It will also be interesting to see how Latona handles his new stewardship of all but one of the 2010 T.R.A.F.F.I.C. conferences (show Co-Founders Rick Schwartz and Howard Neu will run an October event on Miami's South Beach). Latona showed he was up to the task with the highly professional Amsterdam conference he staged this past June under a licensing agreement that later led to a full blown partnership with Schwartz and Neu. Now that he has a greater say in all T.R.A.F.F.I.C. matters people are wondering how much the show's successful formula might be changed.

"Rick and Howard have done an excellent job but they needed someone with my energy to take it to the next level," Latona said. " I need the trade shows as a platform for everything else I'm trying to do for this industry."

T.R.A.F.F.I.C. partners Rick Schwartz, Rick Latona and Howard Neu

"While I was in Australia for the T.R.A.F.F.I.C. event that Fabulous threw, I met many people that wouldn't normally go to the shows. That's when I realized that you have to go global to get local. We tested the theory by throwing a single event in Amsterdam, met another 100 people I wouldn't have normally met and I was hooked. It's about getting my own company and my sponsors in front of a large crowd on a global scale, even if it takes going to six locations per year."

"T.R.A.F.F.I.C. is now all about touching as many domainers as possible," Latona continued. "Rick and Howard have done a great job and have adapted and changed the show as the industry needed the show to change so I'm not going to wholesale change T.R.A.F.F.I.C. shows - I'm just going to continue on the same lines."

"The show is first and foremost about networking. We will continue to add and improve on the networking events as well as always look for ways to have more intellectually stimulating seminars. The newest event at the show and the most exciting thing happening right now is actually something that was Howard Neu's idea. It's the Test Track events, modeled after ABC's TV show Shark Tank."

 In the photo above, Test Track makes its debut at T.R.A.F.F.I.C. New York in October 2009. 
Latona plans to build this feature into a headline event at future T.R.A.F.F.I.C. conferences.

"At Test Track, entrepreneurs pitch their idea to a panel of investors. The people that I will have on the panel are legitimate early stage venture capitalists and angel investors. This is much more than a "festival of pitches". This is real business being done - people asking for investment from real investors. Like the auction business, it'll grow over time and become increasingly important in our space. It's a mission of mine at this point."

Latona speaking at the 
T.R.A.F.F.I.C. ccTLDs
show he
produced in Amsterdam in June 2009

Latona has obviously accomplished a lot over the past couple of years. He has risen so quickly that many of his bigger competitors may not have noticed him gaining ground in their rear view mirrors. He is no longer a secret though so the game could get a lot tougher in the trenches going forward. None the less, Latona is undaunted. "You remember my Interland story? This isn't the first time I've competed against VC backed conglomerates," Latona pointed out. " My company is 100% organic and I plan to keep it that way as long as possible. We have no immediate plans to acquire any companies either. After 15 years in the Internet business I can confidently tell you that any company can rise to the top in months and any company can fall from grace in months. I've been on both sides of that story more times than I care to remember."

"What's important is to have a good reputation, a fantastic team behind you and a brilliant strategy you can execute on. That's what's great about the Internet industry. When you can build a company as quick as we have, why would you want to be in any other business? Still, our work is far from done. We really have just gotten started!


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