|
Schilling built his
phenomenal domain empire from scratch despite taking the
field just five years ago, when almost everyone else thought the
game was already over. Prior to “going public” last
February when he started his popular Seven
Mile Blog Schilling had gone about his business very
quietly. With little publicly known about his personal
background, some speculated that he must have come into the
business with a lot of money to begin with. How else could he
start in 2002 and still build such an empire when everyone
“knew” all of the good names had already been taken by those
who pioneered the space in the 1990s?
The answer is what I have often said is the
domain industry’s “dirty little secret”
- hard work. That is how Schilling got
where he is today. When he started his funding was limited to
his relatively modest life savings and a string of credit cards
that he quickly maxed out. Schilling literally
bet the farm
on his dream and ended up creating one of the greatest business
success stories you will ever read.
| He did it despite growing up
in a country that didn’t speak his language
and going out into the world with little formal
education. What Schilling did have was a family that
showed him what you |
|
Russian
tank rolls through Prague during
1968 invasion of Czechoslovakia |
can achieve if you are willing to work
for it and the lessons he learned from them have guided him
throughout his life. Though most think of Schilling as a
transplanted Canadian who now lives in the tropics –
his real roots extend to Germany and the small town of Teubingen
where he was born.
Schilling’s dad Ray was a medical
student and his mom Tina was an elementary school
teacher. They appeared to have a bright future ahead of them but
the Cold
War had everyone on edge. After the Russians
invaded Germany’s eastern neighbor Czechoslovakia in
1968 the Schillings began to fear that Europe was a
powder keg that could eventually explode. They lived under that
cloud until 1971 when Ray and Tina finally decided to move their
family to North
America.
|
They considered the United States
but America was entangled in its own war in Viet Nam at
the time and no one knew how long that conflict or America's
military draft would continue. Ray and Tina had two young sons
and did not want to see them conscripted when they reached their teens,
so they decided to take the
boys to a new home in Canada where a sister, four years
younger than Frank, arrived to fill out the family. They landed first in Hamilton, Ontario but soon headed
further west, settling in Langley, British Columbia, just
outside Vancouver.
Schilling told us “My first memories of Canada are standing
on the street in front of our house, having neighborhood kids
ask me “What’s your name?” over and
over…and I couldn’t answer them because I only spoke
German. Too funny…“What’s your name?”…really
funny given what I do for a living!” Today Schilling has hundreds
of thousands of names but
little else was funny about those early years in a new country.
The immigration was a family hardship because his father’s
medical credentials didn’t count in Canada. So Ray went back to
med school in Canada while Tina supported the family working as
a substitute teacher. "We were poor,”
Schilling recalled. “We had a home (that Ray built himself)
but there was no money left for anything else.”
| By the time Frank reached high school the
family’s financial situation started to improve a bit but a
much more severe storm was about to hit. “In the 80s my
father finally became licensed to practice medicine and the
family started to do better as dad had an income, but when I was
16 my brother died from an asthma attack. He was my best
friend. When we came to Canada nobody spoke English so we
spoke German and learned English together - we were buddies. I
had trouble focusing after that and it affected me throughout my
last two years of high school,” Schilling said.
“I never did graduate, falling two
credits shy, and my dad was worried. Both he and my mother were
great students and very book smart while I was a terrible
student and more street-smart. My dad hoped I’d follow in his
footsteps as a physician but I didn’t |
|
| have the grades or focus
for medical school and to be honest, the family didn’t have
the money. My dad was a great physician, but a terrible
businessman and social medicine in Canada paid very little
relative to what U.S. doctors made,” Schilling said.
|
Schilling did get a diploma a year later
after making up credits in math and science but he floundered
after leaving high school, spending the next few years living at
home and working odd jobs. He had always been fascinated by
television - loved Miami Vice, music videos and TV
Guide was his favorite publication so he finally decided
to enroll in a film school in Vancouver. “I graduated a
class ahead of Clerks movie director Kevin
Smith and moved to Los Angeles to try my hand as a
writer,” Schilling said. “I sold two monologue jokes to the Dennis
Miller Show and that’s the extent of my success in
televised entertainment!”
| Six months later Schilling went back home
to Canada and, five years out of high school, enrolled at the University
of British Columbia. That stab at higher education
didn't take either and he soon abandoned college to sell
real estate with a friend, Vern Jurovich, who was
doing well in the field (as fate would have it, Schilling would
later help Jurovich enter the domain business and |
|
Frank
& Michele Schilling |
they remain
close friends and business associates today). “I did okay in
real estate,” Schilling said, “but it was a feast or
famine business. I made about $50,000 a year after
expenses, so it was a living.” Much of that real estate
revenue came from houses that Schilling – drawing on skills he
had learned from his father - built himself.
The real estate business would end up
providing Schilling with much more than a living though – it
would also bring him together with his wife Michele. “I
met Michele through this English lady in our real estate
office,” Schilling recalled. “She was a realtor who had just
sold Michele’s dad a condo and she set us up on a blind
date. In 1996 we got married at the Little Church of the
West in Las Vegas on a $500 budget!”
After the wedding, Schilling took on a
series of sales jobs while continuing to build and sell houses
in his spare time. In the late 90’s he advanced to a position
as Senior Manager of Sales and Marketing for a Vancouver
videogame accessory maker. Things were looking good but life was
about to take another sudden turn.
In 2000 Schilling happened to read an
article in a small town newspaper that would end up |
| changing his
life dramatically. “I was visiting my parents who had moved
several hundred miles away and read in the local paper about a
guy who had sold a dozen domain names for more than $130,000!
I was immediately intrigued and started searching
the Internet for information about domains. I stumbled onto GreatDomains.com
and later Afternic, but I couldn’t get any good names
so I tried brokering names…and that’s how I met Garry
Chernoff,” Schilling said.
|
| Schilling called the legendary Canadian
domainer on behalf of a client to inquire about the availability
of one of his domains – Fastener.com. The client would
pay up to $100,000 but Chernoff felt the
category-defining name was worth more. They couldn’t cut a
deal but the conversation led to a close friendship that has
grown even stronger over the years. “Garry is the one
who taught me about internet type-in traffic and making
money with traffic,” Schilling said.
|
|
Chernoff told us, “What impressed me most
about Frank was his unwavering thirst for knowledge on
acquiring domain names. He was nothing less than a man possessed.
He quietly contacted the guys who were getting all the domains
on the drops and carefully pried bits of information from each
of us until he had completed the first page of his road map to
success in the domain biz.”
“Another thing that has impressed
me about Frank is his ability to think differently than
most and capitalize on new acquisition techniques. This thinking
resulted in his uncanny ability to thrust ahead of the pack
relatively late in the game and in short order look down smiling
from the top of the domain heap. Another great attribute that
really helped him acquire
|
Schilling
with his "mentor" Garry Chernoff
(left)
reunited at T.R.A.F.F.I.C.
East - October 2007 |
| knowledge in the beginning is his unmatched
charm and likeability. He genuinely loves his fellow man
and cares deeply about everyone around him. How can you not love
and want to help a guy like that? He balances wealth with
compassion better than anyone I know,” Chernoff said. |
While Schilling credits Chernoff for
getting him started in the domain business, Chernoff said he
also got a huge benefit from the relationship. “Frank is the
man who has kept me in the game, grinding it out all
these years. I remember thinking back in 2000 that getting
decent domains would be over very soon. Frank proved me wrong
and gave me the competitive boost that kept me going. I
probably would have quit and settled into complacency years ago
had I not developed a friendship with him,” Chernoff said.
When Chernoff showed Schilling how he could
earn revenue from affiliates 24 hours a day by putting
their links on his landing pages, Schilling felt like he had
finally found his calling in life. Online gambling operaters
paid some of the highest affiliate fees, so Schilling began
assembling a portfolio of generic gambling-related domain names
that attracted people searching for online casinos. He
eventually decided the real money would be in running his own
online casino and Schilling put all of his chips on
the table in a bid to reach that goal.
|
View
of Caribbean Sea from Schilling's
current home on Grand Cayman Island
|
He and Michele sold their house and the
remaining homes Frank had built and emptied their retirement
accounts to build a $200,000 war chest. They also
decided to move to Grand Cayman Island where they felt
the absence of income and property taxes would help their money
go further. Most other online gambling operations were also
based in the Caribbean so it looked liked the place to be to get
ahead in that business.
Things did not go as planned.
Schilling’s domains were not getting enough clicks to produce
the kind of revenue he would need to open his own casino. Even
|
|
worse, he learned that the Caymans actually banned online
casinos even though they were legal in other Caribbean
nations. To top it off, under U.S. government pressure major
banks had started blocking credit card transactions with
online casinos. By April 2002 his casino dream was in tatters.
|
However Schilling still had several
thousand gambling domains as well as some decent domains in
other categories that cumulatively earned about $300 a day.
He decided to take a detour and try to scale that revenue higher
by building a large portfolio of income producing domains
representing all areas of commerce. He believed that growth of
the Internet itself would bring more advertisers online making
all of the traffic domains he acquired more valuable as time
went on.
|
His timing couldn’t have been better. The
.com bubble had burst in 2000 and prices for good domains had
become affordable again. Disillusioned owners were even letting
high quality domains drop rather than pay renewal fees.
Valuable names were falling left and right but Schilling was
convinced the web was here to stay and that the value of those
domains would eventually soar again.
Though Schilling was convinced he was right
many did not share his optimism at that point in time. Though
she never left his side, even Michele was thoroughly alarmed as
Frank sank all of their savings in domains (along with the funds
available on their credit cards). But he made smart choices
|
Just
another day in paradise.
Frank at home in the Caymans. |
| in the domains he went after
and as the revenues they produced steadily increased he
poured the proceeds into still more domains. He was soon
spending hundreds of thousands of
dollars a month with dropcatchers like SnapNames
and Pool.com.
|
| He was also spending every waking hour
in front of his computer scouring expiring domain lists.
He landed a few nice one-word names like Antarctica.com
and Fettucine.com but most of the |
|
Schilling's
pre-2004 photos were lost in
Hurricane Ivan but he resurrected his
"long hair" look for us in this photo. |
great one-worders
remained out of reach. His bread and butter became highly
descriptive two-word commercial terms like Chapter11.com,
DrugProblem.com and AntiguaHotels.com and even
three-word names like DiamondWeddingRings.com – any
term people were likely to use in searching the web for a product or
service.
He burnt the candle at both ends and in the middle,
often working 20 hour days while swilling coffee to stay
awake. Before long he had a pretty good impersonation of Howard
Hughes going on. “My hair got long and I turned skinny and snow
white,” Schilling recalled. People who hadn’t seen him for
months mistook him for a tourist on the rare occasions he
ventured out.
But Schilling's single minded pursuit paid
off. Within a couple of years he had bagged over a quarter of
a million domains and revenues for his company, Name
Administration, cracked the 8 figure mark annually.
Bigger fish were starting to take notice. Marchex, the
first public company to buy a major domain portfolio (Yun |
|
Ye’s $164 million collection) wanted Schilling’s list
too and made an offer of over $100 million to buy it.
Schilling was inclined to accept but Mother Nature
intervened to upset that apple cart. |
|
|
In September 2004 category 4 Hurricane
Ivan slammed into the Cayman Islands. Schilling had
gotten his family on the last evacuation flight off Grand Cayman
before the storm hit. Though they were safe their home was destroyed
along with everything in it. Their cars were also wrecked but
the biggest loss was their computers and critical domain
data they needed for the audit Marchex required to complete
the purchase. It would take months to rebuild the information
and as that process dragged on the deal dissolved as Marchex
focused on concluding the Yun Ye purchase. Ironically, Schilling
was the one who helped them make contact with the reclusive Ye. |
Hurricane
Ivan flattened everything in its path when the
storm tore through the Cayman Islands in Sept.
2004 |
|
In a further irony, the missed opportunity
proved to be a blessing in disguise as Schilling’s
portfolio has soared even higher in value and if sold today
would command considerably more than the 2004 offer. “I have
been approached about selling my business five times over the
past four years,” Schilling told us. “Each offer was
extensive and written, three of them were accompanied by
deposits and all were nine-figure deals of ever increasing
magnitude. I seriously worked with each suitor. Things just
never worked out for one reason or another and I take that as a
sign of sorts. I suspect I will sell my business one day but
I am reasonably certain I will never leave the name business
entirely, nor would I want to. This is too good a space,”
Schilling declared. |
|
Asked to amplify on that, Schilling said
”Everything on the Internet begins with a name
and there are very few people who understand how domain names
work or their importance to commerce, branding etc. Even
folks who think they understand branding, don’t get the power
or importance and versatility of names - they too miss the boat.
This is the ultimate niche during the ultimate window in time
and it will be for decades. You could say that I
sell my business (get liquidity) every month when the traffic
wires roll in and although I could sell names to |
|
Schilling
talking about his favorite subject - domains - at
T.R.A.F.F.I.C. East Oct. 2007 |
generate even
more liquidity, I would prefer to keep the portfolio whole and
wait for software/tools to become commercially available,
allowing me to develop on a large scale and create a
media company of permanence. I may be expedient but I’m
becoming more patient with age. And I recognize how truly
lucky and blessed I am. I’m happy to wait until somebody sees
what I see or until the opportunity to segue into a different
stage comes along.”
Schilling added, “I think people
inherently “get” that anyone could build the next billion
dollar internet based company and for all the fluff,
posturing and protocol, it all begins with a simple domain name
which anyone can register for $8. A world of
possibilities and dreams for the price of a Big Mac meal!
I think the domain industry will continue to grow, mature and
gentrify, regardless of who tries to control it. Google
has greatly assisted the domain business by democratizing
search. They have returned power to the people and the canvas
for all people starting an “internet work of art” is the domain
name. I think today’s large registrants will become
tomorrow’s new media companies.”
|
|
Considering that five years ago
Schilling’s financial status was no different than the vast
majority of those who are reading this article right now, I
asked him what were the biggest benefits his newfound wealth
have brought to his life. “The most important dollar I ever
made - the one that made me shout for joy and feel rich
- was the dollar it took to allow me to work from home
and to stop going to an office. Everything since, everything,
has been anticlimactic for me. I only really notice that I have
money or the significance of having money when I spend it to buy
something and then I remember how hard (impossible) it would
have been to buy that thing |
| before the domain business.
I have really enjoyed being able to travel and stay in large
hotel rooms. I’ve enjoyed being able to buy privacy by
traveling privately and to surround myself with “space”,
Schilling said.
Another big change in Schilling’s life,
one affected just this year, was his decision to put his life
and business in public view. He now speaks frequently at
domain conferences and interacts daily with all comers through
his blog. When people are building a business they do not want
to let potential competitors know what they are building – but
now that Schilling’s empire is established, letting the cat
out of the bag is no longer a concern. “It is precisely as you
suggest,” Schilling said. “The business had matured to the
point…no...beyond the point where it was
hyper-competitive and needed to be kept secret.”
|
|
|
|
“The seed for the blog was planted by
reading years of what I viewed as incomplete or misinformation
on domain forums and chats. There were private guarded chat
forums which were password protected where the marrow of the
domain business was discussed. It just felt like it was time for
an industry insider to speak openly and render opinions
for further discussion - to fuel open conversation about the
space. I finally began blogging at the encouragement of Tia
Wood who somehow got hold of my email address and
asked if I published anything she could read. I told her no,
but I’ll start today!” Schilling laughed.
That was back in February and he has been
at it ever since. “Blogging is a challenge in the sense that I
feel I owe readers my best effort even when my heart isn’t in
it that day but I am learning to balance” Schilling said.
“The greatest reward from blogging is having people who write
to tell me something I
|
| wrote six to nine months ago changed
their life or business. That something seemingly small that
I did, made a huge difference to somebody else. Life’s like
that I suppose. - it’s often the little things that matter
most,” Schilling observed.
|
The little things Schilling does has made a
difference to a lot of people. In 2004, about a year after I had
started DN Journal and at a time when it was still
building an audience, I got a phone call out of the blue from
Schilling. I of course knew of him but we had never met or
spoken before and I had no idea he knew who I was. This was
before any major domain conference had been held so few
of us in the industry at that time had met face to face (what a
difference three years has made – now hundreds of domain
professionals have met personally and become friends thanks to
the the
first T.R.A.F.F.I.C. conference in October 2004 and the
many trade shows that have followed it). Schilling called just
to introduce himself and let me know he liked the publication
(he also gave me some sound advice on buying domains that I
regretfully did not follow!) but I was very impressed that he
went out of his way to be helpful and offer encouragement to
a stranger.
|
When
Schilling talks wise people listen. T.R.A.F.F.I.C.
Co-Founder Rick Schwartz pays attention to what
Frank
has to say as he and Schilling prepare to participate in
a
blogger's panel discussion at T.R.A.F.F.I.C. East 2007. |
Prior to his debut show in 2004, T.R.A.F.F.I.C.
Co-Founder Rick Schwartz was on a Caribbean cruise that
stopped at Grand Cayman. He took the opportunity to meet
Schilling who had already been a member of his domain forum for
several years before they finally met.
“Frank is a legend for a number of
reasons," Schwartz said. "First because he is the
nicest guy you would ever want to meet. He is like the Jack
Kennedy of domains. Second, he came fairly late to the game
but never whined that he got in too late. He just put his nose
to the grindstone and put together the #1 domain
portfolio in the world nearly overnight. His portfolio |
| has a
low value of about $500 million and a real value likely
over $1 billion…and third, did I mention that Frank is
one of the nicest guys you will ever want to meet?! I see
him as the #1 ambassador for our industry,” Schwartz added.
|
Dozens of others would say the same thing
about Schilling who has managed to remain unaffected by his
success. “I’ve heard that money like alcohol, reveals who
people really are - strips away the veneer,” Schilling
said. “I genuinely like people - all people - and I’m a
pretty happy guy. I just try to be myself. I’ve never
forgotten who I am and I have a pretty good memory. I remember
how hard it was for me in the past and what it’s like to
have nothing. I’m the same guy - putting more zero’s in
my bank account doesn’t change my memories or who I am. It
doesn’t make me any better or make me special,” Schilling
said.
| Schilling also hasn’t forgotten what the
domain business has done for him. He has given back in a big way
as a founding member of the Internet
Commerce Association, a non-profit group |
| dedicated
to protecting the rights of domain name owners. Schilling has
personally donated $100,000 to the organization since the
ICA was founded in the fall of 2006 ($50,000 to help get it off
the ground and $50,000 more to help keep it running as the ICA
recently entered its second year of operation). “I like the
ICA concept because, similar to Rotary, it allows you to
give back to the space you thrived in. I really don’t give
enough there because I don’t physically have the time, but I
donate and am very proud of the group’s ideals which are truly
pure and high-minded,” Schilling said.
|
Schilling
and ICA Legal Counsel Phil Corwin (right)
speaking at T.R.A.F.F.I.C. East 2006 in Hollywood,
Florida |
While reflecting on the twists and turns he
has experienced in his life, Schilling said “I wake up every
day feeling so grateful for the life I have. Reading my
history you can see how I could have just as easily settled into
a life of invisibility and gone from struggle to struggle
with nobody ever knowing or caring about it. I have no formal
education, no marketable skills and I don’t focus
well. Yet I’ve still thrived and have made more money than
everyone in my family tree before me combined. Why did
this happen to me? All I can do is be eternally grateful and give
back wherever I can,” Schilling concluded.
*****
|
