Interview With Tyler Cruz – The $200,000 Domain Sale, An Insiders Interview
What started as an assignment at school now earns Tyler Cruz 6 figures a year. He runs over a dozen websites, sold domains for as much as $200,000 and lives life how he wants to! In this interview Tyler talks about his journey to becoming a wealthy internet entrepreneur.
Want to learn how Tyler makes his money online? Check out his popular web entrepreneur blog at TylerCruz.com
What inspired you to create your first Website?
Back when I was in grade 12, part of my Information Technology 12 course was to create a website in which we would be given a mark for at the end of the term. Since I was just getting into movies at the time, I naturally decided to create a movie review website. I really liked the design and site I had built, and so I had decided to continue building it even after I finished the class. I think I ended up getting 27/30 or something like that on the project.
You run a lot of successful forums, what advice would you give an entrepreneur trying to make money online with forums?
I wouldn’t say I run a lot of successful forums… I can only really call one of them successful, but I do run a lot of forums. As for giving advice on how to make money with forums, there unfortunately aren’t a lot of methods other than the most obvious such as putting up ads or asking for donations. But forums do have one strength in that you can sell subscriptions to members, which is great since it can be used in conjunction to throwing up some ads.
But really, I don’t think forum owners should worry about monetizing their forums. They should instead focus solely on building a great community and growing the forum. This holds more true to forums than it does to “standard” websites, because without the community there is no site, whereas a site doesn’t need a strong community to make money.
It’s also a lot easier to monetize a forum the larger it is. The larger your forum is, the more posts and archived content there is for search engines to pick up. In addition, having a large forum in a specific niche allows you to sell ads at a premium since advertisers are able to target a large number of their market easily.
You made over $100,000 last year from your websites, what did you spend this money on?
First, most of the money goes towards bills. I have a bi-weekly mortgage, credit card, strata fees, hydro, cable, cell phone, insurance, hosting…. right off the bat that takes a good chunk of change.
Next, I put away money each month for taxes. I unfortunately have to pay a lot of taxes, especially since I’m not a corporation yet, although that’s on the agenda. It’s kind of scary seeing just how much money I save up in taxes, only to have to surrender to the government come tax time.
I only spend a small amount of cash back into my websites, although I plan on putting some more money back into my sites soon. I’ll occassionally “splurge” and pick up a nice domain or two, but I normally don’t spend any more than $100-300 (not including hosting) on my websites in a month.
As for the rest of the money, in early 2007 I bought a condo, which I’ll continue to have to pay for for a while yet. I also spent quite a lot of money on food (I love food, and eat out at restaurants often or order delivery), gambled away a lot in online poker and poker at the casino, bought 360 and Wii games, and bought some furniture (coffee table, bistro set, etc.)
You successfully brokered a domain for $23,000 how did this feel?
To clarify, I sold the domain for $200,000 USD, and received a cheque for $23,000 CDN. It was a great feeling, of course. It took quite a while to find the “right” buyer though. I had contacted a lot of interested parties, but most offers wouldn’t exceed the $100,000 mark, and my client was pretty adamant about his asking price. I finally found the right buyers, and in the end everyone was very happy.
It was also a very exciting time for me, as I had just purchased my condo and was still unpacking when I finally sold the domain.
If you could go back in a time machine to the time when you were just getting started. What business related advice would you give yourself?
Invest in Google 🙂 To be honest, this question is not really fair to answer since hindsight is always 20/20. The best and easiest advice to give, though, would be to invest in domains. While I didn’t have much money back then since I was only working a part-time job, if I knew then what I know now, I could have invested $5,000 into domain names and sold them today for $5-$10 million – no exagerration on those numbers, either.
Do you think that entrepreneurialism is something that is in your blood? Or is it something that can be learned?
Good question. I think it’s a bit of both, to be honest. I think you could have worked a standard 9-5 job until you were 42, then read some inspirational books, reassess your life, quit your job and do just fine as an entepreneur. On the other hand, I also believe that part of being an entrepreneur is being able to take calculated risks, and if you’re not risk-adverse then you won’t be giving yourself the opporunities that are needed to succeed.
Is there anyone that you look up to and model yourself on?
To be honest, I’ve never really had any role models growing up, let alone now. However, there are certainly people I admire. Basically, I admire anyone who has good business ethics, and worked hard but smart in order to achieve success. And bonus points to those who didn’t have a “helping hand”, such as growing up in a rich family.
Guy Laliberté would be a great example. He started as a street performer, then made a little company called Cirque du Soleil, and is now a self-made billionaire. Yes, billionaire. I gained even greater respect for him when I saw him on the TV show High Stakes Poker. They are playing with their own real cash with a $500,000 buy-in. In addition to Laliberté already vowing to donate 50% of his proceeds to charity, he showed his true generousity when the following situation occured: Lalibterté was in a hand with poker pro David Benyamine, and they both ended up all-in on the flop in a pot worth 1.3 million dollars. When they turned their cards over (with two cards still to come), they saw that Laliberté was the clear favourite.
Seeing this, Laliberté immediately said in a very kind manner “Hey, listen. I understand that this is a lot of money to you. It does not make a big difference to me, but I know it is a lot of money for you. So, we can chop the pot, or… you decide what to do. I know it is a lot of money to you so it is up to you”. By chopping the pot, he meant basically they would both take half of the pot. Sensing that Benyamine was a bit embarrased to accept his gesture, he offered another proposition “How about this. I just take what it is here and we forget about it?”. There was only about $180,000 in the actual middle of the table, even though the pot was $1.3 million. This is because they didn’t actually throw all their chips and wads of cash into the middle, since they both declared being “all-in”. The real pot was actually 1.3 million, but only $180,000 cash was actually physically in the middle.
Before Benyamine accepted the deal (saving himself half a million dollars) Doyle Brunson, a poker legend at the table, brought some levity to the table when he said to Benyamine, referring to the pot size and Laliberté’s offer “This represents a day in his life…. and…. your life!”.
Even though Laliberté is a billiionaire, poker is poker and the only reason he offered the deal was because he didn’t want to financially hurt somebody.
What advice would you give to a Young Entrepreneur setting up their first business?
I don’t have a whole lot of experience with brick and morter businesses, but I think that the following logic lends itself from the web just fine: Be honest with yourself. Try to think as an unbiased customer or consumer of your product or service, and ask yourself if you would buy your own product or service. If not, why not?
I think that a lot of entrepreneurs get caught up in all the excitement and often forget the one of the most important aspects of entrepreneurialism: developing a quality product.
What are your plans for the future? Do you believe in goals (for example anything that you want to do before age 30)?
By 30, I’d like to have enough financial freedom where I could do anything and not have to worry about money. I haven’t done near enough travelling as I’d like to, and so it’d be nice to be able to travel the world with a laptop for a while.