The Startup Branding Journey at User.com
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:
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 raised $500,000 in seed funding on or around November 13, 2015, according to Crunchbase.com3:
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
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):
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:
And right on the heels of that announcement, they shared that they were changing their brand from “UserEngage” to simply “User”:
— User.com (@userengage_com) October 29, 2018
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.
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:
A domain name that matches a brand does not guarantee success, but building a skyscraper is only possible on a solid foundation6.