Practical Ecommerce

GoDaddy’s Bob Parsons: We’re Only Seeing The Tip Of The Iceberg

Bob Parsons takes risks, not something your average CPA tends to do easily. But then Parsons isn’t your average CPA, although he has a degree in accounting and worked as one for several companies.

Parsons took a risk when he joined the Marines after growing up in a “Blue Collar” Baltimore neighborhood.

The Marines sent him to Vietnam, more risks. When he got back, he went to college and got his degree. He went to work in a risk-free environment managing the numbers for other people.

It didn’t suit him.

ALTAt risk factor 10, he jumped off the edge of the world and started Parsons Technology, a software development company that provided packaged financial and accounting software for home and small business.

A self-taught programmer with no computer education, Parsons wrote the original Parsons Tech programs. He built the company to a $100 million operation with 1000 employees—80 percent share of the legal market, 80 percent of the Christian market, and the number-three tax preparation package. Then he sold the company–it seemed like the right thing to do, he says.

He retired for about a year. But, the comfort of millions in the bank and no worries didn’t set well with him and he started casting about, looking for something to do, something that had a little excitement and risk in it.

He took up “giant killing.”

In the late 1990s he decided to go up against the “only game in town,” Network Solutions, in the Internet domain registration business. Under the “forgettable” banner, Jomax Technologies (named for a road in Scottsdale, Arizona), Bob Parsons launched a venture that has changed the Internet business. You might know it by a different name.

PeC: Where did the name GoDaddy come from?

We had to change the name. Jomax was so forgettable. We thought and thought and threw out different names. Someone said, “Big Daddy,” and we checked that. It was gone. I typed in GoDaddy.com and it was available. I registered it. It is as simple as that. But there are two things that happen when somebody first hears that name. They smile and they remember. So, the name means nothing, it’s just there and it works for us.

PeC: Where did you get the idea to start a domain registration company in the face of an established industry “giant?”

I really didn’t have an idea. I retired for a year after I sold Parsons Technology. I hated that. I mean it was a very uninteresting life for me. I needed to have some risk and some excitement in my life— something needed to be on the line again. Now, when I started Jomax the only business plan I had was to hire some bright people, to look at opportunities in the Internet. We tried a number of different things that didn’t work and I lost a fistful of cash in the meantime. But we settled on the domain registration business because the market was so incredibly overpriced and the service was terrible. That proved to be the right decision. It took us about a year to get everything in place, but we did, and it worked out.

PeC: During that year, did you ever come to a point when you thought you had made the wrong decision?

Well yeah, I was the only investor, and I was watching the cash go out in all directions. That was when the market collapsed—you know the dot com thing—and there were months when I would see two million evaporate, just like that. I got pretty low and in early 2001 I decided to close the company. I flew to Hawaii to take a little time off and think about how I was going to close it down. But, while I was there, I decided that was not what I wanted to do. The epiphany came when I saw a guy parking cars and he was really happy. I thought, heck, the worst thing that could happen is I wind up parking pars — or I could go to Vegas and be a stick man at a table— I always thought that was kind of cool. So I came back and said, if the company goes broke, I’ll go broke with it. That October we turned the corner, and we’ve been making money ever since.

PeC: You are deeply involved in the ecommerce business (industry).

That’s all I do.

PeC: What is your take on the future of the industry in general?

I think it is going to do nothing but grow. I think it is going to grow at unheard of rates. I think more and more businesses are migrating to the Internet. Most businesses don’t sell online but most businesses will discover that they need to, both as a customer accommodation and for revenue enhancement. I think we’re only seeing the tip of the iceberg.

PeC: What is it that makes you think we’re only in the embryonic stages of the industry?

Because most companies do not sell online and those that do know that if they do it right— pay attention to security, design their site so it’s appealing and workable, they’ll attract customers. We live in a society where when we decide to do something, we want to do it right now. More businesses need to wake up to that fact. If someone wants to get up in the middle of the night and shop, and you’re not there, someone else will get the order. Most of my shopping anymore is done online.

PeC: What sorts of things does Bob Parsons buy online?

I buy clothing, books, personal items. I buy anything online that I can buy online, right down to vitamins. And I love the auto manufacturers’ sites. I can go there and literally build a car exactly the way I want it right at my desk. I tend to do that with any of my vehicles, and then I use that data to go to the dealership.

PeC: So, if you see a good business future for ecommerce, what do you think the challenges are going to be along the way?

There are two things, and they are a kind of chicken and egg thing. First, the site must be secure. That means you need to make sure fraud and ID theft (and that sort of thing) are managed. Second, you must educate your customers or users—you need to teach them that your site is safe and that it can be trusted. You have two types of people. There are those who use the Internet and know it and understand it. And there are those don’t. Much of the growth and good is going to come from those who don’t. So, we have to overcome that element of fear–fear of the unknown. But, those people not only need to be educated — they need to be protected.

PeC: Whose responsibility is it to accomplish that task?

The industry itself has to do its part. I also think a lot of the responsibility falls on the shoulders of the Department of Commerce. Now, are they working on it? Yes. But could they be doing more? Yes. But they can only do what the legislative and executive branches allow them. But, right now, they are all worried about things that are of no significance, like whether there should be a triple-x domain extension. What’s wrong with that extension? After all, at least you would know exactly what content the site contains if it has a dot xxx after it. When it comes to ecommerce, we have to have a government that deals with the problems that count.

PeC: Is it your sense that somewhere down the road the idea of taxing transactions on the ‘Net will raise its ugly head again?

Anytime you have a source of money you’re going to have people try to get it. But, if that ever happens, it will really set us back.

PeC: Are there technological challenges that need to be addressed in ecommerce?

I see fraud as being the biggest challenge. Dealing with fraud is protecting people from things like phishing, spear phishing, viruses, spyware and all that stuff that tends to really degrade the experience of being online. That, to me, is the biggest challenge. Right along with that is going to be better and better bandwidth. The faster the bandwidth, the more things we’ll be able to do, like have three dimensional displays of the products, where a customer can almost get the feeling of what it would be like to touch it.

PeC: You’re a very successful ecommerce businessman. What are some of the mistakes that you see other ecommerce entrepreneurs making?

Well, first off they have to do a better job of promoting their sites. First and foremost, no matter how well the site is designed, if people don’t get to it, it’s not going to do anything. They need to work on search engine optimization, advertising, non-Internet advertising, and promoting it directly with their customers, which is perhaps the best way. The second thing has to do with the design of the site, to make sure it is actually useable. That’s done through usability testing, having people go through it and make sure that mere mortals can navigate it. The third thing is to make sure there is enough information available that defines the products being sold. If a customer wants more information, they must be able to get it quickly. You have to understand that if the information is not there, the user or customer will always assume a negative.

PeC: There are a lot of people unconvinced about the need for deep content on a site.

Yes, and the market will teach them. They also need to test the site and their products. I’ve found that almost nothing works the first time.

PeC: What’s in the future for GoDaddy?

We are a domain name registrar. We like to look at ourselves as the on-ramp to the Internet — everything starts with a domain name. We invest more in research and development than any other registrar — by far. We develop everything we sell — and everything we sell enables the use of the domain name. What you will find is that when new technology breaks we will be there— and our customers — new or old — will be able to take a domain name and use it in that regard. One of the things that is exciting is this new MOBI domain. This domain is for sites designed to be accessed from a mobile or a PDA-type device. So what we’re doing is creating software that will, besides creating a regular site, will also kick out a dot MOBI site. And we’ll provide our ecommerce cart and secure certificates that will enable that system. See, we look at ourselves as enablers and what we enable are domain names.

PeC: If you had one single piece of advice for startup ecommerce people what would it be?

They have to be relentless, they have to be willing to change and adapt and they have to do it often. That would be it. They will not get it right the first time, I assure them.

Michael A. Cox

Michael A. Cox

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Comments ( 7 )

  1. Legacy User February 1, 2007 Reply

    Very well thought out, relevant interview. You taught us about the man himself and also his business, along with some interesting business tips. Nice job. Thanks!

    Karen
    http://www.sassyscrubs.com

    — *Karen Bradley*

  2. Legacy User February 1, 2007 Reply

    Highly enlightening…and encouraging.

    — *Karen Gross*

  3. Legacy User February 1, 2007 Reply

    good article

    — *Ed*

  4. Legacy User February 1, 2007 Reply

    Hey, I've been a GoDaddy customer for many years and own about 400 plus domain names that I purchased from GoDaddy. The customer service is awesome. I was a Network Solutions customer many many years ago, and the service there is AWFUL and yes, they are way overpriced. Bob has the right idea. Get into a niche and fight the giants!

    Wynter
    http://www.LeatherLollipop.com
    http://www.VeronicasHighHeels.com

    — *Go Daddy! Go Daddy! Bob's Company ROCKS!*

  5. Legacy User February 1, 2007 Reply

    Who cares? The issue is whether or not an ebusiness can benefit from goDaddy services. The answer, if one is in the e-book publishing or software publishing business is absolutely not.

    All development on goDaddy's download shopping cart came to an end when Bobbie got caught up in Super Bowl fever and took his eye off the business. While the cat's away, the programming mice do play, and business like mine are left high and dry.

    Let's have some articles of practical value in your "Practical" newsletter.

    — *Phil Good*

  6. Legacy User March 13, 2007 Reply

    GoDaddy.com Rocks!
    I have a couple hundred domain names with them now and like their registrtion process as well as their hosting tools. Bob is an inspiration to all of us wannabe Internet investors. His company is clearly defined and provides great services to his customers.

    Always like to read about successful self made people with a passion for what they do. Great article about taking risks.

    Thanks

    Joe

    http://www.DealsThatRock.com

    — *Joe*

  7. Legacy User February 29, 2008 Reply

    I wish Bob Parsons would pay as much attention to keeping his long-term customers happy, as looking for attention this way.
    As a long-term customer I've in the past been very happy with Godaddy.
    Now their computers started making a billing error. According to Citibank, the biggest bank in the world, Godaddy's computers have started making mistakes in their "merchant id number" causing billing errors.
    Godaddy's billing chief agreed there was a computer problem, apologized, and promised it would be fixed.
    Yet I still get numerous emails from Godaddy saying my web sites will be erased because of $3.99 billing errors, and my web sites will be "removed from our server and cannot be recovered".
    No response from Bob Parsons, although I left 3 telephone messages. No promised emails from his customer service arrive. Maybe his telephone service doesn't work right any more because I was disconnected 4x today after being on hold about 15 minutes each time.
    Apparently Bob Parsons doesn't care about keeping his customers happy any more. I wish he would pay attention to the basics of his business for a change.

    — *David*