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The Startup Branding Journey at User.com

User.com's Domain Name Journey

The Startup Branding Journey at User.com

By Michael Cyger, Founder of DomainSherpa & Publisher of DNAcademy

Published: December 18, 2018

James Iles published an interview with Greg Warzecha1, the founder and CEO of what-is-now-called User.com, a startup company that has raised $3.2 million to date.

It’s important for founders to understand what a startup goes through on their branding journey, and User.com is a good case study.

On Thursday, December 15th, 2016 — almost two years ago from the date of this post — User.com launched on ProductHunt.com, a website that surfaces the latest apps and tech creations. There, Greg wrote:

UserEngage is made for people who need a simple marketing automation instead of huge enterprise systems yet don’t want to sacrifice effectiveness.

And here is an excerpt from ProductHunt2:

UserEngage Original Post on ProductHunt

What’s interesting to note is that Greg launched on the domain name UserEngage.io. Before I looked up anything, I’d venture a guess that UserEngage.com was registered already but that UserEngage.io was available for hand registration, and since .io domain names are easily recognizable as “cool” by ProductHunt users — it was probably an easy choice to make for a fledgling, bootstrapped startup.

In fact, according to DomainIQ.com historical whois the domain name UserEngage.io was first registered a year prior to the then-expiration date: July 17, 2015.

UserEngage.io Registered Date

UserEngage.io raised $500,000 in seed funding on or around November 13, 2015, according to Crunchbase.com3:

Crunchbase.com Seed Round UserEngage.io

As with most successful product launches and as a product matures and grows, they move from customers being early adopters of technology to the masses. In doing so, a good brand choice like “UserEngage” stays consistent but the TLD (top-level domain) should become more understandable to a greater number people, so they pursued the purchase of UserEngage.com.

We were thinking about the proper domain name for a long time and finally, we decided on UserEngage.com. It was simple enough and available at an affordable price so we contacted its previous owner, David Cohen from Techstars.com, and we bought it for $10,000.

That means that UserEngage invested 2% of their $500,000 seed funding on improving their online presence by purchasing the UserEngage.com domain name for $10,000.

Financial side note: $10,000 is right in the middle of the $1,500 to $50,000 suggested value range for a two-word .com domain name by Bill Sweetman of NameNinja, according to How Much Is A Domain Name Worth.4

Historical side note: UserEngage.com was one of the portfolio names that Techstars, a startup accelerator, purchased when they acquired NameLayer in 2013.5 Clearly Techstars is willing to sell domain names in their portfolio to startups outside their investment portfolio, but Techstars values domain names based on the quality of the name — similar to the pricing found at How Much Is A Domain Name Worth.

According to DomainTools.com historical whois the domain name UserEngage.com changed ownership from David Cohen of Techstars to Grzegorz Warzecha sometime between February 14, 2017 and April 3, 2017 (precise historical whois information is hard to obtain):

UserEngage.com Changes Ownership 2017

With the company having upgraded their domain name to UserEngage.com — but still maintaining their brand of “UserEngage” — they continued the hard work of building their company, improving their product, and delighting their customers.

Then, on October 17, 2018, UserEngage announced on Facebook that they raised $2.7 million:

UserEngage Announced $2.7M Raised

And right on the heels of that announcement, they shared that they were changing their brand from “UserEngage” to simply “User”:

The marketing automation market constantly grows so it’s important to find a name that is short and easy to remember. User.com meets both conditions and is only four letters…we bought the [User.com] domain for $150,000.

It was very smart of Greg to work out the deal to purchase the domain name User.com prior to announcing their funding round, as it might have influenced the previous domain name owner’s valuation of the domain name.

How much of the $2.7 million raised went to purchasing User.com for $150,000? ➡️ 5.56%

It’s not unheard of for startups raising $1+ million to spend 10% to 20% of their capital on a stellar domain name and brand for their company because it makes getting traction much easier.

Only spending 5% shows that they are frugal, used some fantastic negotiation skills, or both. Most likely, they did a phenomenal job at negotiating a deal as $150,000 is on the lower-end of one-word .com brands, as discussed at How Much Is A Domain Name Worth.

What’s possibly most interesting about this domain name journey is the evolution.

Evolution of Domain Name Choices

They went from a hand registered domain name costing about $30 that they used to prove their idea to an early-adopting customer base, to a $10,000 domain name when they were gaining traction and wanted to reach a bigger customer base, to a $150,000 domain name that will serve as their ultimate domain name and brand.

In the end, User is a marketing automation company focused on users of companies, and they now own the easiest, shortest possible domain name: User.com.

A domain name that matches a brand does not guarantee success, but building a skyscraper is only possible on a solid foundation6.

Footnotes

1. Iles, J. (2018). Why This Company Paid $150,000 for User.com. [online] NamePros. Available at: https://www.namepros.com/blog/why-this-company-paid-150-000-for-user-com.1114854/ [Accessed 18 Dec. 2018].
2. Product Hunt. (2018). UserEngage – Affordable marketing automation with 5 minute setup | Product Hunt. [online] Available at: https://www.producthunt.com/posts/userengage [Accessed 18 Dec. 2018].
3. Crunchbase, (2018). [online] Available at: https://www.crunchbase.com/organization/userengage#section-funding-rounds [Accessed 18 Dec. 2018].
4. Cyger, M. (2018). How Much Is A Domain Name Worth?. [online] Howmuchisadomainnameworth.com. Available at: https://www.howmuchisadomainnameworth.com#guide [Accessed 18 Dec. 2018].
5. Bilton, R. (2018). TechStars buys NameLayer to save its startups from awful domain names. [online] VentureBeat. Available at: https://venturebeat.com/2013/09/24/techstars-buys-namelayer-to-save-its-startups-from-awful-domain-names/ [Accessed 18 Dec. 2018].
6. Homeimprovementsus.net. (2018). Building Construction : Home Improvement Tips. [online] Available at: http://homeimprovementsus.net/building-construction [Accessed 18 Dec. 2018].

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Comments 12

    1. Post
      Author

      Thanks, James. Couldn’t have done it without your great work to start with. Keep doing what you’re doing!

  1. I’ve not seen an analysis like this before but it makes total sense. Thanks for sharing your thoughts. It will definitely help me as I build my company!

    1. Post
      Author
    1. Post
      Author
  2. Hi,
    I’m Greg from User.com – Ahrefs.com send me a link to your post.

    Michael everything what you wrote is a true. Chapeau bas.

    You must always remember that it’s still a long journey ahead of us to be a successful company.
    But we completly love what we doing, and we were extremely lucky to get user.com domain.

    Kind regards,
    Greg

    1. Post
      Author

      Great to have you visit, Greg.

      Thanks for finding the link, reading the article, and verifying the information I presented was correct. I tried to reason through what I thought happened, so it’s nice to hear that I wasn’t too far off.

      I even tried to nail down the pronunciation of your last name by watching an old video interview with you, but I apologize that I didn’t have the native tongue ability! 🙂

      I think your domain name + branding journey is really relevant to other entrepreneurs and startup founders in a similar position.

      Congratulations on your progress in such a short amount of time. I’ve seen it take upwards of 10 years for other founders to make the same journey.

      Best regards,
      Michael

    1. Post
      Author
  3. Wow Michael, another great insightful post. Have been watching your shows since domainsherpa days, it’s great to see that you’re doing even better and providing even greater services to the community. I, at least, have learnt plenty.

    keep up the good work and I can’t wait for more!

    1. Post
      Author

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