I was recently at a talk where someone rallied against this whole "just a feature" argument. They made a compelling argument that there's a fairly natural evolution you see many start-ups go through from feature -> product -> business.

The rationale being that you initially build some specific functionality you can't find in the market (feature), over time rounding this out into a product and finally evolving into a business as you understand how to monetize it and where opportunity for growth lies.

You don't need to have your business totally conceived on day one. And in fact, finding where the business lies (or whether you even want to grow your idea into a business) is something you'll have a much better understanding of after a few months of being out there.

Personally (disclaimer: I run the domain search site Domize - http://domize.com) I think it's wonderful we can launch these "just a feature" websites and evolve them into products or businesses over time (or not). These 'better mouse-trap' sites are a fantastic, low-risk way of generating passive income and if you can string a few together you can potentially get to a stage where you can live off them. At the very least, you've demonstrated the kind of initiative and creativity that will provide you with a great talking point on your resume.

Let's not forget, both YouTube (embeddable video for eBay auctions) and Twitter (group SMS updates) started as "just a feature" and evolved into billion dollar businesses.

I don't disagree. I probably should have been more precise than "its a feature". My real point was more "protect the real revenue stream". Doing all the hard work to find leads, qualify them, get the lead interested in converting and then handing it off to a registrar for a one time bounty is selling the potential short. There are a ton of ways this "feature" could be launched with a fully-realized revenue stream - just simply tossing it out back-ended by an affiliate program does a lot more for Godaddy than it would do for the OP.

I guess if I had a summary point it would be "don't be so quick to give away your customers..."

I see what you're saying, but there's a big issue in doing this with domain names - the margins are slim to none (at least they are if you want to be price competitive).

Whereas registrars are paying 10%-20% on sales affiliates generate.

You need to think about whether you can actually beat this margin on your own, taking into account overheads like payment processing fees, customer support, billing issues & fraud etc. Not to mention the hassle of it all.

That's why Beau talks about branching out into hosting below.

GoDaddy make money off domains because they have massive scale, recurring billing, and a hell of a knack for in-cart up-selling.

Personally, I don't want to get my hands dirty with any of that!

I run a profitable registrar at scale and can appreciate the comments about low margin, costs, competition, etc.

My point is simply this: don't underestimate the value of a recurring revenue stream vs. a one-time payout to your business.

With a strong product and good customer service, you can count on a customer relationship for a number of years allowing you to amortize your customer acquisition costs over a much longer term than an affiliate relationship permits.

That said, if you've got the stomach for arbitrage, then go for it - there's a lot of potential for the right business to strictly focus on lead gen and delivery. However, I don't get the sense that this is in the OP's wheelhouse. I have a bias that those with a product focus tend to operate with fatter and more sustainable margins on the basis that its necessary to support their development of the product. Marketing organizations OTOH would never start with a comment like "look at the product I built on the weekend, what kind of a business can we build with it..."

If you want to build a business that focuses on affiliate lead-gen, then this prototype is the wrong place to start. I mean, you might get there accidentally, but its definitely the long way home.

"a) build it so that you can license the technology to people that have made a company "

Better yet a white label website that refers business back to the reseller or registrar and can be operated as a subdomain to the resellers or registrars main website ie suggest.registrarname.com. Do this on a monthly fee basis that is reasonable not per name registered.

"b) become a reseller or registrar so that you can fully deliver the service and collect the recurring revenue."

Reseller makes sense. Becoming a registrar doesn't. Using this as the cornerstone of an idea will never result in enough to cover the ongoing costs.

Fair points --

There should be a lot of value in being the first site people visit when searching for a domain name though. We'll see.

Sell advertising. The registrars will bid each other up to get first crack at the registration business. Other providers (hosting, developers, designers) will also be interested in your traffic.

GoDaddy et al might replicate your functionality. But they won't replicate a look at the competition for the business.

Better yet, be a brokerage portal. Get registrars to bid directly for the work. You also provided curated search on "best registrar" questions -- fastest, reliablest, fewest / most stolen domain problems.

If you can work out some means of obtaining good names held by squatters, that's better still -- and a real value add that would be harder to replicate. (I actually have some idea along this line.)

Why try to run a registration business when you're already good at generating traffic?

Possibly, but then it feels like you are betting your brand awareness against Godaddy's. That's a tough battle to fight. And there's nothing stopping them from implementing something similar.

I will say from first-hand experience that, technically, you are correct. However, much cash is generated through the friction of their purchasing path.

Yeah, totally true. That still doesn't make it easy for an unknown to come in an topple and established brand. That said, Google did it.. :)

Out of curiosity, would you call imgur a feature or a company?

they are definitely pursuing a business model in a pretty logical fashion, so I'd easily go with company.

relying on the affiliate model feels like a betrayal in the UX and it essentially hands over one of the most obvious ongoing revenue streams to the registrar. Why not take that margin and recurring revenue for yourself? Its not like its hard nowadays to set up as a reseller - getting accredited is slightly more complicated, but it you can make it as a reseller, then even that hurdle becomes pretty achievable.

> When I see stuff like this, I always think "feature" not a company.

People thought that about search too until Google came along.

And Facebook, and Twitter. And I believe Steve Jobs said that about Dropbox, too.