The
Comeback Kid: How .CLUB's Colin Campbell Rebounded From a
$100 Million Setback and Took a Lead Role in Reshaping the
Web
By Ron
Jackson
Colin Campbell,
the Founder, Chairman and CEO of .CLUB
Domains, has tasted both tremendous
success and heartbreaking failure during
his career as a serial tech entrepreneur. Most
people don't like to talk about ventures that went
south - it is too painful - but Campbell is different.
He grew up working on a family farm where
both bountiful harvests and withering droughts came
with the territory. Whatever happens you learn from
it, pick yourself up if necessary and plant again
for a new season.
Campbell's resilience and
tenacity led to him co-founding several well-known
Internet brands before his latest venture with
.CLUB, including Tucows, Hostopia
and Internet Direct Canada to name just a few.
What he learned In the course of running his many enterprises
has made Campbell a walking business encyclopedia that anyone
interested in the dos and don'ts of building a
company can benefit from.
Colin's willingness to
share his experiences, good and bad, isa
trait that has turned
.CLUB
Founder Colin Campbell speaking at THE Domain Conference in Fort Lauderdale.
(September 2016)
him into both a budding author and riveting
speaker and I'll be sharing some examples of that in
this article
(including a couple of
full-length videos of Colin's talks). But first, since
advice is only as good as the person giving it, I want to take
you on the roller coaster ride that has been Campbell's life so you will know
exactly why when Colin talks it is wise to listen.
Future
farmer and serial tech
entrepreneur Colin Campbell
Campbell
coming of age in Canada
"I was born a
Canuck in a suburb of Toronto,"
Campbell began. "My
father was the owner of a successful advertising
agency and was also an ordained minister. He had a
profound influence on me becoming the business leader
I am today. Although he died shortly after my 14th
birthday, his convictions and beliefs provided me with
a solid foundation for how I run my businesses."
"I was blessed by the presence of
technology at an
early age. My father always made certain we had the
latest technology, including one of the earliest
computers: the 4k Sinclair. My brother, who is a real
computer “geek,” launched a BBS on the TRS 80 in
1984. From an early age, I had an appreciation for
what technology could do and how it could improve
people’s lives," Campbell said.
Still,
Campbell did not spend all of his youth hunched over a
keyboard - in fact he had another life in a field about as
far away from technology as you could get. "My
mother was a
farmer, and I spent my summers and even post
university hawking vegetables at the local
market and working on the family farm," Campbell
recalled. "It was hard work, but I learned a true
appreciation for what it
takes to make a buck. Those experiences
carried over when I got into the domain
business. The first time I bought a
domain for about $100 from
Network Solutions (now Verisign) and turned
around and sold it for $299, I couldn’t
believe it! It had taken me hours
of labor to pick 10 flats of berries to
earn $20, and now I just hand someone a
virtual name and make 15 times that amount,
it was incomprehensible to me!," Campbell
exclaimed.
Though
domains might have been an easier way to make money
Campbell wasn't about to slack off when it came to
work. "I
was your typical over-achiever in high school,"
he said. "A
real-life Alex P. Keaton.
President of the debate
club, business club and unfortunately more often than
not, a member of the daily breakfast detention
club," Campbell smiled.
When
Campbell moved on to college at the University of Toronto
he took advantage of the bigger stage the school gave
him to display his talents. "College was definitely one the highlights of my
life," Campbell noted. "I ran for student politics, served as Speaker of
Council and V.P. of Finance for a year." Campbell
did that despite personal circumstances that
would
have led others to drop out. "Practically penniless I continued to work part time while
attending school," Campbell said. "I was actually
homeless for about
four months at one time, living in my school office.
Although politics, even at the school level, can be vicious, I had
the time of my life and learned
valuable skills and lessons."
Campbell's
college graduation fortuitously coincided with the
emergence of the Internet.
After
graduation Campbell's love of technology bloomed again
with the emergence of a new communications platform
that would turn the world upside down - the Internet.
It didn't take Campbell long to carve out a profitable
place for himself on the World Wide Web. "Shortly after leaving university
in 1993 my brother, another partner and I launched a Bulletin Board Service (BBS)
called Computerlink and it very quickly grew to become the
second
largest BBS in Canada. We quickly realized that this
thing called the Internet had huge
potential," Campbell recalled.
"Eventually,
we killed the BBS and launched a new service called
Internet Direct Canada, a dialup internet access and
hosting provider (Easyhosting.com). Within a few
years, we had become the largest independent Internet
provider in Canada and took it public as a penny stock
in 1997 through a merger. A couple of years after
that, we did another merger with an up-and-coming
cable company (Look Communications), and we applied
for and were awarded 50% of the license for wireless
Internet across Canada. It was an initiative by
the government to help foster a more competitive
market in Canada."
Campbell
at the start of his business career as a
Co-Founder of Computerlink.
"I continued on with the company as a
vice president reporting to the new CEO. When we
merged, the deal locked our stock up for 18 months.
But this was 1999, a time when traditional business
rules went out the window and markets kept climbing to
unbelievable highs. What could go wrong? We were
trading at about a $30 million valuation before the
merger and climbed to an unbelievable $180 million
valuation by the time the merger completed. It was beyond what we and our shareholders could ever
have imagined and it didn’t stop there!," Campbell
marveled. "The
company’s valuation took off to well over $1 billion
and hit an all-time intraday high of $19 per share.
At the age of just 28, my personal wealth was
valued at well over $100 million. Life was
good"
However,
as many entrepreneurs have learned the hard way, life
doesn't always stay good. It was a very painful
lesson that Campbell learned not long after his stock
reached those phenomenal heights. "Unfortunately,
the company spent money like it was a billion-dollar
company," Campbell said. "It frightenedme and I argued with the CEO
on numerous occasions about the waste and
mismanagement. However, the stock kept rising, and all
I had to do was wait until March 2001 to sell my
shares."
In an
agonizing turn of events, Campbell never got the
chance. "We launched a secondary offering in March 2000
after the Nasdaq had hit an all-time high of 5000
points," Campbell said. "Then, just one week later a judge
decided that Microsoft needed to be broken up under
antitrust law, and the Nasdaq fell to 4000. The powers
that be at our company thought it wasn’t a good time
to raise money and decided to pull the offering, and
it all went downhill from there. I learned that
no matter how good you were at the time, if you were
not liquid and had too much debt on your books, you
were in trouble. The .COM crash had arrived, sparing
no one and driving the Nasdaq all the way down to 1114. The company had become insolvent and shortly
filed for bankruptcy, wiping out the entire value
of
my holdings."
"I ended up selling that $19 stock for no
more than six cents per share. But even that wasn’t
the end of it all. I had many employees who had been
paper millionaires who lost it all as well…and I was
the guy who made the deal happen. I was the one who
negotiated it, and I was the one who ultimately lost
everything for everyone," Campbell remembered
ruefully.
I told
you he was honest about the successes and the
failures - and the valuable lessons that come from both.
While that first major venture ended in disaster,
Campbell had better luck with another one - an outcome
that showed the wisdom of having one's irons in more
than one fire.
"In the mid 1990’s, my partners and I bought a
website from Scott Swedorski, a librarian from
Flint, Michigan," Campbell said. "He needed to find a company to host the
site, but it had no revenue and unfortunately used a
lot of bandwidth. The site was called The
Ultimate
Collection of Winsock Software (or Tucows)
– a shareware/free software download site. In order
to save money on bandwidth, we launched it with mirror
sites or local servers that were located within the
networks of internet service providers. Quickly it
became one of the top 100 sites on the internet for
several years
in a row. We started it with 1 mirror
site wand and scaled it to hundreds of mirror sites
gaining access to tens of millions of users. We sold
ads to try to monetize the traffic, but more often
than not we could not sell all the ads. So we decided
to launch Domain Direct (now Hover) with the intent
of
selling domain names. I remembered my first
experience with Network Solutions and knew it was
repeatable. Domain Direct was courted heavily by
several large internet players of the time and
ultimately sold to a group led by billionaire Benny
Steinmetz. We sold it in 1999 and this time we
did not gamble with stock, as it was an all cash deal."
"After
the collapse of Internet Direct and losing everything
for everyone, we had to move on," Campbell
continued. "To have lost 10 years
of my life for myself and everyone around me was very
depressing, but we began to focus on what we loved the
most - which was building internet infrastructure to
support small businesses and end users. We
launched Hostopia,
a relative latecomer to the hosting
and email space. Early on we determined that we did
not want to go head to head with the likes of Godaddy,
or 1&1, but instead partner with companies like
AT&T, Bell and Vodafone to deliver these services.
We engineered a low cost, telco-grade level of hosting
and email. Today almost every telecom in the western
world and South America that offers outsourced email,
hosting, fax to email, and other website services uses
Hostopia. We took that company public on
the Toronto Stock
Exchange with
the symbol “H” in
2006 to raise additional funding and later sold at a
much higher price to Deluxe, who is historically known as a
check printing company. Finally, I had my first
bigsuccess, but I wanted more," Campbell
declared.
Colin
Campbell at the center of the celebration when
Hostopia went public in 2006.
"While at Hostopia, we launched a company called
GeekForLess. Hostopia needed a lot of programmers and
administrators to migrate our customers’ hosting
bases to our platform, and it had to be done
flawlessly because even the smallest of errors could
result in massive outages with millions of customers
being affected. We simply couldn’t find the talent
we needed in the North American labor market. We
created GeeksForLess by sourcing some of the best
talent in the world from Ukraine, and reduced our IT
costs by 60-70%. My partner and the CEO of
GeeksForLess, Igor Nikolaichuk, has since grown the
company to almost 800 employees in four different
locations," Campbell said.
"After Hostopia was sold, my partners and I continued
to launch smaller companies, including an outdoor
media company, a mobile development company, a
Montessori school, and a real estate business. The
real estate business was an anomaly, as I do not
consider myself a real estate magnate by any means,
but I had the opportunity to buy a decent number of
buildings in South Florida during the market lows of
2008-2010. Timing is everything and since then
I’ve begun divesting a number of those properties."
"I
attribute the success of each one of these companies
to a leader whom I can rely upon to perform, including
my wife who currently leads the highest rated private
school in Fort Lauderdale, Little Flower
Montessori.
She is very passionate about the school and is the
right person to lead it. Passion is what drives
people towards success, and I knew I needed to
continuing pursuing my passion. So after working
for Hostopia/Deluxe, a Fortune 1000 company, for
almost three years, I left to focus on what I really
enjoy the most: domains, internet companies and
helping small businesses and entrepreneurs grow and
succeed," Campbell said.
That
change in focus would result in Campbell joining the new
Internet land rush ignited by ICANN's new gTLD
program. He detailed how the pursuit of .CLUB
unfolded.
"While at Hostopia, I hired Roger Collins
(the original founder of Afternic) to do a study
of the opportunities with the new gTLDs,"
Campbell said. "We determined
that there would be a need in the marketplace for new
domain extensions that have meaning. In the way that
.org has meaning, we believed extensions like .shop,
.law, .bank, .hotel, .app, .blog, .club all had
meaning to the right of the dot."
"I especially like
generics with meaning like .shop and .club. We
believed at the time that the names needed to be short, have no restrictions and be
priced
competitively with .com. I reached out to Hostopia to
see if they were applying for any of these names, as I
felt it would be important that they have the first
opportunity. So when they told me that they
were not
going to be pursuing any new domain extensions, I was
excited about moving forward. .CLUB was the one
name
that really stood out from our initial list, not only
because it was generic but also because it added real
meaning – and not just in English, but in just about
every language in the world," Campbell noted.
".CLUB means
something different than .com. RollingStones.com is a
site about The Rolling Stones. RollingStones.club
is
site for fans to get involved. .CLUB means come
together. It means exclusive. It means community.
Almost any passion or concept can be put in front of
.CLUB. We went all-in with .CLUB and applied for only
this one domain extension, which was in stark contrast
to many of the portfolio applicants who applied for
multiple extensions. With lawyers, application costs
and more, we spent about $400,000 just to get the
privilege to apply - without knowing whether or not we
would ever recover that money," Campbell
recalled.
"We soon found out
we were facing a competitive auction, but we were
determined. We raised $11 million in funding to
support the auction and launch the marketing of the
domain extension. I was fortunate to partner early on
with my former CTO at Hostopia, Dirk Bhagat, and later
bring on top talent, including Jeff Sass as our CMO
and Michele Van Tilborg as our COO. Today with
over
800,000 domain registrations, 100,000 live sites, and
recognized by the industry as the #1 new domain
extension, we think we are well on our way to creating
a global brand similar to that of a .co,
.org or .tv, " Campbell said.
.CLUB
went live in 2014 and won that year's T.R.A.F.F.I.C.
Awardsfor both Most Promising New
gTLD and Best Marketing by a New gTLD (winners
were selected in industry-wide voting). Accepting the
awards were (left to right): .CLUB Founder & CEO Colin
Campbell, COO Michele Van Tilborg and CMO Jeff
Sass. (Photo by Barbara Neu)
"I think soon the world will begin to recognize that
there are great brandable domain extensions for
entrepreneurs and users who have passions, and
consumers will be paying more attention to what’s on
the right of the dot for a web address. It’s
impossible or simply costs too much to get a great
.com address these days, but for pennies on the dollar
I have seen great businesses launch with awesome
brandable names that have real meaning and terrific
marketing potential. When consumers go to a
.club or a .shop address, for example, they have a
pretty good idea of what they’re going to get as
opposed to a .com," Campbell opined.
Campbell
added, "Domain
investors will also begin to figure out which gTLDs
are good investments and which are not, but this will
only become more evident over time. Because it’s all
so new, it can be challenging for domain investors,
but I believe they need to focus on usage,
brandability, and short generics with meaning that are
priced competitively with .com. In addition, they
should not just look at the horse but also the
jockey.
What is the registry doing to promote the extension?
How much have they invested in awareness? What is
their global strategy, including China, which has
proven to be the dominant player in this industry?"
Campbell
speaking at the 2016 NamesCon
conference in Las Vegas last January.
At
the top of this story I noted that Campbell has taken
his story to the stage and kept audiences
spellbound with it - recent examples coming from
the 2016
NamesCon conference in Las Vegas
in January and the 2016
edition of THE Domain Conference in
Fort Lauderdale in September. While some were
hearing Campbell speak for the first time at those
industry events this is
actually something he has been doing for several years
now.
"I was asked to speak to a group of successful
entrepreneurs at MIT on the topic of serial
entrepreneurship in 2012," Campbell
noted, "With all of my successes and
failures, I began to identify certain patterns at
different stages of my companies. What I learned was
that every company needs
to have the right people,
money, story and systems in place to ensure success -
and that mix doesn’t change whether the company is
in startup mode, scaling, or exiting. Failure to
have any of these things in place will decrease your
likelihood for success."
Below:
Campbell distributed this chart just before his
keynote speech at THE Domain Conference in September.
It does a great job of boiling down what you need in
terms of People, Money, Story and
Systems in order to Start, Scale,
Exit and Repeat a good business idea. Click
the image orthis
link for a full size copy of the
chart.
Campbell
told us, "When
I look at an idea to start a company or even a
domain
name to invest in, I think about how scalable and how
defensive the idea is – what can I do differently
from the competition that blocks them from attacking
my customers. Outdoor media or real estate, as an
example, are very difficult and capital intensive to
scale. New domain extensions like .CLUB can be
expensive to startup and launch, but it is highly
scalable and is very defensible."
"When
exiting a company, I look at potential companies that
can gain a strategic benefit from us and improve the
overall valuation vs. competitors or private equity.
Domain investors already know this: a company is
likely to spend considerably more money on a domain
name that they can strategically leverage for their
business. But if a domain investor sells that
same name to a competing domain investor, he or she
will get wholesale rates at one-fifth to one-tenth of
what retail would pay. Here is a video that explains it in more
detail." (Editor's note:
this is Colin's complete 34-minute keynote speech
at THE Domain Conference in Fort Lauderdale in September 2016):
Campbell
is also working on a book titled Start, Scale,
Exit, Repeat! that will carry his message to
an even wider audience. All of this activity obviously
makes him a guy who doesn't have a lot of free time on
his hands. I asked Campbell how he juggles it all.
"Building
and running several companies can, at times, be
overwhelming for me and my family and colleagues,
especially given the intense level of required
travel," Campbell admitted. " I have traveled to dozens of countries and just since
launching .CLUB, have made 10 trips to China alone.
Thankfully I have an understanding wife, but I can’t
say the same about my three King Charles Spaniels who
are not kind to me when I pull out that
suitcase," Campbell smiled.
"Those
who really know me, know that I am obsessed with
.CLUB. I admit it. Like many of your readers you could
classify me as a domain-o-holic. But I am also
passionate about giving back. Years ago my partners
and I created and funded the Toronto Internet Exchange
(Torix),
and I was also a founding director of CIRA
(.CA). More recently we launched Entrepreneur.Wiki, a
foundation to inspire new entrepreneurs while at the
same time supporting already successful entrepreneurs
with credibility, exposure, and legacy."
As
much as Campbell has accomplished it is hard to
believe he is barely halfway through his entrepreneurial
career. We will no doubt hear much more from him in
the future. In the meantime, I will leave you with
more of his own words. This video is from an excellent
48-minute panel session called "Lessons from
the the Edge" at Startup
Saturday, a special one-day event staged
by THE Domain Conference (TDC) Co-Founder Ray
Neu the day before TDC 2016 got underway in Fort
Lauderdale.
In
this session. moderated by .CLUB CMO Jeff Sass,
Campbell joined fellow entrepreneurs Barry Kates
and George Verdugo (VisitSpace.com) to tackle a
topic most entrepreneurs prefer to not talk about - failure.
The honesty of the speakers, who all bounced back form
huge setbacks, was refreshing and very inspirational.
Entrepreneurs need to know there is a good chance you
are going to get knocked down but you can get
back up again armed with valuable, albeit painful,
experience that will make you better equipped to
succeed than you were before. It was hearing Campbell
detail his journey in this session that made me want
to share his story with you and I appreciate
the time he gave me so we could do that.
