People you should know in golf: Bob Parsons - Part 2June 8, 2016 Golf Equipment
In part 2 of our interview find out how Bob Parsons lost tens of millions in his bid to crack the online market...
How did your first business venture go?
In 1984 I named my software Money Counts and it got to be good enough for me to start selling it.
I started my own business in my basement, I called it Parsons Technology. I had $15,000 – it was all the money I had and I put it into this business.
When you go into business for the first time, particularly with no one to guide you, you’re kind of like a young guy walking into jail for the first time – you’re gonna learn a lot of lessons.
The first year I lost my whole $15,000. The next year I kept improving the software and from what I had from my other job and my credit cards I had $25,000. I put that all into this business and dropped my prices. I lost it all.
What was the turning point?
The third year I had somebody from a magazine call me up. Now this is a bit like being in the automobile industry at the start of the century. Everything was happening.
This magazine was called Computer Bargain Line. They had the advert for the front cover for sale. They offered it me for $5,000 and I took the deal.
My advert said ‘Money counts but it only costs $12’, I dropped the price to $12. I said if you want to make copies, do it. You want to give it away, do it. Do anything you want but just send me $12. And it worked.
I made money. I doubled my money. And then I started buying big adverts. The little adverts didn’t work. Because when you run a big advert people think you’ve got some significance to what you are doing and they believe in you.
In 1984 I made $287,000. I quit my real job and starting working full time at Parsons Technology writing all sorts of programs.
We had 1,000 employees and £100m in sales by 1994. Our products were in every country in the world. We had four percent of the software market in North America. Me and my wife decided to sell it. We thought we could sell it for $40m.
The company Intuit – who own Quicken – wanted to buy the business. They offered me $60m. Now I didn’t exactly go to Harvard business school but I knew enough to tell them I was insulted.
So I got the price up to $64m and sold it. After that I got divorced. We divided by two but my wife got a bit more than divided by two. I moved to Arizona where I live now.
How did the idea for GoDaddy.com come about?
In 1997 I used the money that I had to start Go Daddy. When I started Go Daddy it was called Jomax technologies. All I knew at that time was that I wanted to be involved in the internet. But I didn’t know exactly what I wanted to do.
I employed some smart people, we tried a bunch of different things. If something didn’t work we quit doing it and if it did work we kept doing it. It’s called a search fund. It didn’t have that name back then, people just called it ‘you’re an idiot’.
What I learned was that it’s very difficult to find something that works when you’re in a new industry which the internet was.
As the internet moved along the one thing we did find that worked was that if we built websites for people we could make some money. This was like 1998/99 and people would say to us ‘$10,000 for this little website don’t you have something where I could do my own website?’ And that made sense.
We then went ahead and built software where people could build their own websites.
As we started trying to sell this we got no traction. It was a time where you couldn’t buy advertising. We had this software but we could get anybody to buy it because we couldn’t attract anybody.
All the domain name companies are hard to deal with back then. Prices are high, their service is bad, stuff doesn’t work.
We thought if we could get people over here to buy a domain name we can sell them out software. Turned out to be right as rain.
We started doing it in 1999 and we became an authorised registrar in 2000 where we could sell domain names.
Where did the name GoDaddy come from?
We decided to change the name from Jomax Technologies, which was very forgettable, to a name that is more easily remembered. So we came up with the name, GoDaddy.
We were kicking around ideas at night and after doing this sort of thing for a while, you get stupid. A little bit of Bourbon might have been involved.
‘How about Fat Daddy?’ Taken. ‘How about Big Daddy?’ Taken. And then Go Daddy came up. It was available and I bought it as a joke.
I told everybody the next day we were going to call the company GoDaddy.com. ‘You’ve got to be shitting me’ was the response. But it stuck.
Our first domain name we sold was in November 2000. It was called Ghetto Justice. I don’t want to think about what it was, but that’s what it was called.
Did things grow overnight from there onwards?
Because of the dotcom boom it was really difficult to get anyone to pay attention.
I always managed my businesses differently to how everyone else did. When I first started GoDaddy, I had $35m in the bank.
I’d say alright, I will not worry about this venture until I get down to $30m. I got down to $30m. I will not worry about this until I get down to $25m. I got down to $25m really quick. I won’t worry about it until I get down to $20m… 18, 16, 14, 12, 10, 8, 6…
When I got down to $6m I decided to close the company down. There wasn’t even a light at the end of the tunnel. But I still had $6m and I might not have it for much longer.
What convinced you to stick with it?
When I make decisions I keep my own counsel. I don’t discuss them with everybody.
I took a trip to Hawaii. I was there to decide how I was going to pay the employees and the vendors and liquidate some of the assets.
But as I was there I thought, ‘I don’t want to sell this thing’. It just didn’t feel right. And then the epiphany for me happened when there was a guy who went to get my car and was parking my car. He was my age, he was happy as a lark, chucking the keys in the air, whistling and singing.
I thought this guy is parking cars – he might have been the richest man in the world but probably wasn’t – and he’s happy as can be. I’ve got $6m and I’m miserable.
And then it occurred to me that if this thing didn’t work I can always park cars for a living.
I go back home, I strap myself to the mast and expect the ship to go down and me to go down with it but something happened late in 2001 which changed everything. It was the dotcom bust. And when the dotcom bust happened, GoDaddy was born.
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