Good domains are valuable, so a few thousand pounds is a small amount to risk. Zap.com is a really good domain. His approach was smart. A billionaire is too busy to discuss the sale of a domain, but if you do manage to catch his interest, he may well give it to you free/cheap because it isn't an asset he spends time worrying about.
I love the conservative objections here. Stunts like this only work if most people aren't willing to try (EDIT - thanks).
EDIT: Outlandish stunts are the best way to improve your hustling abilities. If you have the time and money to try it, you win either way.
As someone who deals in this space both as owning "really good domain names" and helping people buy "really good domain names" for many many years there was nothing smart about what he did and how he spent the money from a quick read of the story.
One thing I can tell you is that we frequently get approached by people who have some kind of an idea that someone is going to let go of an asset because somebody really wants it and tells a good story. That approach is actually quite common. And anyone who owns even 1 good domain has almost for sure been approached by someone with a story about why they need the domain but don't have any money to spend.
Even though the owner of this domain isn't in the domain business they still have some idea of the value. They aren't just going to let the domain go because some guy shows up from London. In fact, how do they even know that's the truth? That he flew in from overseas just to do this transaction? And not for some other reason? This is not "Bud Fox" in "Wall Street".
I'm currently working on a deal trying to purchase a domain for someone which is owned by a non-profit Fortune 500 company. They don't need the money even though the amount the person is willing to pay ($50,000) is a good number for this domain.
The approach that I will try after being turned down by the usual suspects at the company is to simply work my way up to the board of directors at some point and perhaps make a case that as a non-profit the $50,000 can do some good and the domain isn't being used bla bla bla.
Find an angle that matters. (Note same angle probably wouldn't work with a for profit but it's worth a try with a non-profit ..)
This sounds like something you only see in movies: Billionaire hedge fund manager signs over really valuable asset to persistent little whipper-snapper then utters some cliché phrase like "You've got spunk, kid!". Hedge fund managers didn't get rich by giving things away to the first person who asked nicely, and they still have business partners to answer to.
I'm surprised that calculating risk before investing large amounts of time and money now qualifies as 'conservative'. If that's a common attitude in SV these days, the bubble may be worse than I thought...
"I'm surprised that calculating risk before investing large amounts of time and money"
The OP made a point of saying how he thought he had a good story to tell YC. The fact is something like this could backfire and show how naive you are and be easily viewed as stupid.
> A billionaire is too busy to discuss the sale of a domain, but if you do manage to catch his interest, he may well give it to you free/cheap because it isn't an asset he spends time worrying about.
From what I read, it was the hedge fund not the billionaire that had the domain.
if that's the case, then the problem is that the fund is carrying the domain on their books for some value, say $100,000.
If they give it away for "free/cheap" then they report a loss of $100,000 to not only their investors but also themselves, presumably they are invested in their own fund:)
no one is going to let someone else at the fund just give away $100,000 of gains.
He's already been investigated (or prosecuted, I forget) for expensing personal stuff at the fund. But really, it would be easy to consider it an investment, or buy the asset personally and then invest it personally. Whether or not a small asset like that is his personally or the fund's doesn't affect his decision making.
But the more valuable it is the more unlikely it is that it will be given away. Is spending time and money on the extremely small chance of getting hold of zap.com smarter than using those efforts to get hold of zap.co or zap.me? How much more is zap.com worth to your business over other alternatives?
If a few days and a few thousand pounds isn't worth much to him then I understand but if resources are scarce, using them on long shots that might not even pay that much over the alternatives is not good business.
For a startup, time and energy are always scarce. Payments are a hard space to break into. Putting even 1 second into a particular name is a mistake if that isn't the highest priority.
And given that Paul Graham turned Stevie Graham down for not having thought things through, rather than for lack of a good domain name, then I'd say the time and money was wasted. With those resources he could have conducted 20 user tests against prototypes. If PG was wrong about his concern about the business model, Stevie Graham would have had real evidence from real users. And, if as is more likely, PG was right, then Stevie Graham would have discovered the problem before he was pitching somebody so important to the future of his company.
As someone pointed out earlier, Zap.com is a publicly traded company, with a 5.5m market cap. The odds of this being given away for anything less than 5.5m is about as close to 0% as you can get.
The real history is a lot more colorful than that. In the first dot-com boom, Zapata was a natural gas and fish meal company that tried to take over Excite (a major portal at that time) by rebranding itself with the name Zap.com [1].
They got widespread mockery and bad press coverage for that, and no longer use the domain.
It's not so much the quest for the domain name, it's the energy spent at this stage on it.
A domain name won't make or break your business. But all that time and energy spent on this problem could probably have been spent better on something else.
I love the conservative objections here. Stunts like this only work if most people aren't willing to try (EDIT - thanks).
EDIT: Outlandish stunts are the best way to improve your hustling abilities. If you have the time and money to try it, you win either way.