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New-Tech Domains and When To Cut Losses

May 26, 2016

gears and sprocketsOccasionally I become interested in a new technology that is just beginning to bud, and if it sounds promising, like others I may take a gamble on registering some domains within that field in the hope the technology eventually goes mainstream.

Each year as the domains come up for renewal I spend some time reviewing the technology, through searching Google News, Google Trends, Google Keyword Tool, and some other tools to attempt to gauge how the field is evolving and whether the investment will prove out, i.e. – whether to hold or dump.

I don’t have too many of these types relative to the size of my portfolio, but I am reviewing one such set now that is coming due for renewal.  Since 2012 when I first registered the names, I have spent approximately $560 over the past 4 years in registration and renewals to maintain the names.

Although each year I evaluate the technology, it seems to be slowly gaining momentum, it is yet to go mainstream and it may well be another four years before it does, if it all.  That is always the gamble.

Assuming it did, in another four years, that would mean perhaps another $500 invested, or a total of $1k, which then again, if it does not and fails to take off, I will still be left asking the same questions and running the same evaluation in four years time, and trying to ascertain whether there is still prudence in renewing or whether I am throwing good money after bad.  With the $1k I might presumably have laid out over that 8 years, I might have instead purchased a more premium .com domain or spent it on 5 to 10 valuable backorders that would have been more likely to return an investment.

Again, the new-tech holdings are a small fraction of my portfolio, so in once sense I see it as a sort of diversification, or at the least, its throwing a little bit of money down on a risky bet on the chance of a big reward … which is not guaranteed.

This is naked speculation for sure.

At this stage, to renew what I currently have I would need to stick about 15% back on top of the $560 already invested.  In some sense I tend to view this similar to pot odds in a hand of poker, except I don’t know the exact odds of making the hand (or, the odds the technology will actually emerge to make the names profitable), however I only know that the amount to add to the pot to stay in the hand is small relative to the size of the pot already, making it seem on the surface like a small decision.  Still, in some sense it is only myself I am playing against, and comes back to that question of whether or not I am throwing good money after bad.

Have you ever bought into a tranche of new-tech domains – names related to a not-yet well known field or technology that you hope will one day become widely used – and if so, what criteria do you use to evaluate how long to hold those names or how long to follow the technology before it seems like throwing in the towel and shifting that money to smarter investments seems warranted.

If you have anything constructive to add please share your thoughts, stories or feedback in the comments.  Thanks for reading.

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