.CO Internet: One Founder’s Surprising Recovery After Going Belly Up – with Juan Diego Calle

How does a founder whose company goes belly up, recover and launch a business that powers over a million Web sites?

Juan Diego Calle is the founder of .CO Internet, the registry operator for the .CO top level domain.

His company is behind Twitter’s URL shortener, T.co, and Overstock’s new URL, O.co, and over a million other URLs that end in .co.

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About Juan Diego Calle


Juan Diego Calle is the founder of .CO Internet S.A.S., the registry operator for the .CO top level domain.

Raw transcript


Mixergy’s audio transcription is done by Speechpad

Andrew: In this interview you’re going to see how a upstart made a $1.5
billion company. If you still think that the little guy can’t win, wait
till you hear that part. And you’re going to see how a three stage launch
helped generate excitement. You probably were swept up in this excitement
in this interview you’re going to find out why and how you got that swept
up so that when you’re trying to launch something you can do something
equally massive to create that kind of buzz for your launch and I hope
we’re going to get to hear the story of how Playboy Magazine helped today’s
entrepreneur become an entrepreneur back when he was in catholic school. I
don’t know if he even knows I’m going to ask him that question. All that
and so much more in this interview, stay tuned.

Three messages before we get started. If you’re a tech entrepreneur don’t
you have unique legal needs that the average lawyer can’t help you with?
That’s why you need Scott Edward Walker of Walker Corporate Law. If you
read his articles on Venture Beat you know that he can help you with issues
like raising money or issuing stock options or even decided whether to form
a corporation. Scott Edward Walker is the entrepreneur’s lawyer. See him at
WalkerCorporateLaw.com.

And do you remember when I interviewed Sarah Sutton Fell about how
thousands of people pay for her job site? Look at the biggest point she
made. She said that she has a phone number on every page of her site
because, and here’s the stat, 95% of the people who call end up buying.
Most people though don’t call her but seeing a real number increases their
confidence in her and they buy. So try this, go do Grasshopper.com and get
a phone number that will make your company sound professional. Add it to
your site and see what happens, Grasshopper.com.

And remember Patrick Buckley who I interviewed? He came up with an idea for
an iPad case. He built a store to sell it and in a few months he generated
about $1 million in sales. Well the platform he used is Shopify. If you
have an idea to sell anything, set up your store or Shopify.com because
Shopify stores are designed to increase sales plus Shopify makes it easy to
set up a beautiful store and manage it, Shopify.com.

Here’s the program.

Hey everyone. My name is Andrew Warner. I’m the found of Mixergy.com home
of the ambitious upstart. How does a founder whose company goes belly up,
recover and launch a business that today powers over a million websites?
Juan Diego Kaya is the founder of .co Internet, the registry operator for
the .co top level domain. His company is behind Twitter’s URL shortner t.co
and Overstock.com’s URL o.co and over a million other URLs that end in .co.
Juan, welcome.

Juan: How you doing, Andrew?

Andrew: Good. Do you have a favorite; do you have one that’s especially fun
story to tell that’s someone who you saw that’s using .co?

Juan: Fun stories, I think well the coolest things that, the most enriching
moments for us as entrepreneurs in running the company is to actually be
out on the street and see .co in use or hearing about a .co in use. I was
in San Francisco the other day and some guys were telling me about the
Oakland Coliseum, how their using O.co because Overstock is promoting their
brand through O.co for the coliseum and there’s actually on the highway, as
you’re driving through the highway there are signs that say huge state
signs that say O.co coliseum turn right. That is probably the coolest thing
ever and just seeing .co’s out there and we call it seeing .co’s in the
wild and running into them and taking a picture of them and sending them
around to everyone on the team is when you start realizing we’re having an
impact on the Internet which is a great sight.

Andrew: You guys saw a shoe shine person, do you remember that experience?

Juan: Yes, so Linda, our marketing director, landed in London the other day
and she was walking through the airport and yeah, she ran into a shoeshine
stand and it was shoeshine.co or something along those lines, I don’t
remember exactly, sent it around to the entire team and we probably see
high fives all around. So, it’s obviously the ones we celebrate the most
are some of the big ones like Twitter and 500 startups, etcetera that some
of those big, big endorsements that we’ve been able to get but when we see
the little guys, right, using .co it’s very exciting because it means we’re
having an impact.

Andrew: All right. And I want to find out exactly how you did this and how
long has it been since the dotco launched?

Juan: We launched July 20th of 2010, so it’s a little less than 2 years
ago. It’s been a great ride.

Andrew: Yeah. It feels to me like this is so out of reach when you talk
about top level domains, to have control of dotco, which is from what
country? Colombia?

Juan: It originates from the country of Colombia.

Andrew: Right. To me, to the average person, it feels like that’s so out of
reach to get a foreign country to give me control of their top level
domain, to trust me with it and then to get all these other companies to do
it, and I’m feeling that the audience is going to think the same thing
about you. You know what, this guy is probably some bureaucrat or some guy
who has a friend of a friend who got him in there.

I can’t do this business. I’m going to check out of this interview because
I can’t relate. Let’s go back and help people understand that you’re an
entrepreneur like them, a hustler in the good sense of the word, an upstart
in the good sense of the word, who had a setback. Before we even get into
the setback, this is before dotco ever existed in your life, there was a
vision. What was that vision for the company? You know the one I’m talking
about?

Juan: Yeah, are you referring to the vision for dotco or prior?

Andrew: The previous company, the one that ran into a lot of trouble in the
end.

Juan: Sure. So funny enough it’s actually somewhat related to what we’re
doing today, which is empowering small to medium sized businesses and start-
ups to get online and be successful online at the end of the day. That’s
what a domain is, it’s that basic element. The previous company started in
1999 more or less. I had fallen in love with the Internet.

I was still in school. A project that I was working on back then related to
search and how you could use search to answer questions online, so very
similar to Ask Jeeves, I think you probably remember Ask Jeeves the butler.
We built the company, or it wasn’t even a company, it started as a school
project, and the goal was to answer Spanish language questions for
countries in Latin America obviously, so Brazil, Mexico, Argentina and I’m
including Portuguese in there as well.

In 1999 it was the middle of the bubble, everyone is very excited about the
Internet, but with a different mindset. You kind of go into it thinking
you’re going to become an instant billionaire and fly a private plane, that
sort of thing.

Andrew: Did you go into it thinking that?

Juan: Yeah, I think we were so caught up in the bubble and I was very
young, so definitely we did it for the wrong reasons and I think
structurally that showed itself as we built the company, so we raised
money, we hired a bunch of people, we got the cool office in South Beach in
Miami, which at the time was Silicon Beach and made all those mistakes.

Of course, when the bubble burst we had to shut down in a pretty dramatic
way, so fired all of our employees. Keep in mind I was 21, 22 back in the
time, so it was a pretty dramatic point, at least in my career, a bit
setback. My first big venture sort of blowing up in that way.

Andrew: How much money did you raise?

Juan: We raised at the time about $3-4 million.

Andrew: OK.

Juan: Not a gigantic amount of money, but for us it was everything. A lot
of money from friends and family and that sort of thing.

Andrew: I want to talk a little bit about what you learned from it and what
you could’ve done better, but what did you do right at the time? I don’t
want to overlook the things that you did right and learn from them.

Juan: The execution was misguided because again, we were trying to grow the
company for the wrong reasons, but we did have a pretty clear idea. We
identified a need at that time, which was search advertising. Businesses
needed to advertise within search and this was back in 2001, 2000, the time
before Google AdWords existed, so we identified the problem correctly, we
just executed on it totally for the wrong reasons and in the wrong way.

Andrew: And the wrong reasons were to build a big company, to get a jet,
have the big exit.

Juan: Exactly. To go public very quickly and that sort of thing. Yeah, but
just motivated by the wrong things. At least, we had a good product in
mind, which ties in nicely with the rest of the story. We did one thing
smart, we left our servers running and we had built this meta-search
engine.

I don’t know if you remember meta-search engines back then, so we pulled up
results from all the different search engines, Yahoo, MSN and a number of
others and we left that running and it actually started growing
organically, all on its own. We weren’t even paying attention to it.

We started picking up a lot of traffic from users in Brazil, Argentina and
Mexico and around the end of 2002, early 2003 one of my tech guys who I was
still in contact, Tom Lackner, we started looking at it again and we saw
all this and we’re like, oh wow, interesting, very cool. We gave it another
go.

We started again, but this time we had no resources so we actually had to
build the company thinking about what’s our model? How are we going to make
money? How are we going to fund the grow of the company? How are we going
to deliver truly a valuable product to our customers? That’s where PPC was
born.

So GoTo.com, you may remember back in those days, GoTo was having a lot of
success with a fully automated platform where you could log in, create your
ads with a credit card, pay for those ads and essentially pay per clicks on
search engines. We built something very similar, but for local use, for
those countries and those languages with payment options for those
countries and the company started growing really, really quickly.

If there’s one big takeaway that I can share with your audience, is a lack
of resources is actually a good thing sometimes. It’s actually very
valuable not to have money. It makes you think about things in a different
way. It makes you think through the problems in a much deeper way than just
to throw resources at it.

If back in 2001 we would’ve addressed the problems that we faced in 2003,
2004 by simply throwing resources and people at it, that’s not the right
way to do it. If you want to truly innovate you have to solve problems in a
creative manner with the least amount of resources as possible. That’s when
creativity truly comes out.

Andrew: Can you give me an example of something that you did, a step
forward that you took when you didn’t have money just to help me understand
how scrappy you were when you didn’t have the resources, when you didn’t
have the cash to solve problems and you had to use cleverness to do it?

Juan: It comes to my mind very quickly, it’s sitting down next to Tom
Lackner, our CTO, way into the night, 3:00, 4:00 in the morning and just
hacking away at stuff. I’m not a programmer, so just sitting really
literally next to him building a product until the wee hours of the night.

Again, if it had been 2001 or 2000 I would’ve just been throwing people at
it, throwing resources at it trying to get products built while I went home
to sleep comfortably at night. The lack of resources is really a valuable
thing. I can’t emphasize that enough.

Andrew: What about the product? How is that different in the early days
because you didn’t have any money?

Juan: That’s a very important point. I think the product itself really
evolved into something valuable because of the lack of resources, so it had
to be fully automated. It had to be low touch. The previous product was
very, very high touch, very demanding of having support staff.

The second generation product was entirely, entirely automated, so our
customers would log in and do everything on their own. So just having to
think through those processes and how our customers would interact with the
site without us having to provide support for them was extremely valuable.

Essentially, we built the same company that we had built 2 years before, or
3 years before with 2 or 3 employees while we had maybe 20 or 30 in the
first version and did a lot more with the second version. The process of
having to think through things in a really deep way was very helpful.

Andrew: I’m wondering about mind game that’s a part of this. We’ve all seen
someone who’s determined to go on a diet and then they find a cookie and
they break their with a cookie and they redefined themselves, their sense
of self and they say I’m not someone who can go on a diet and then they
just give up on the whole thing. Entrepreneurs too, they have this being
set back and they say, I’m not one of those people who I hear on Mixergy or
see on the cover of Forbes Magazine, it’s just not me. I failed for a
reason I’m going to go and do something else. That didn’t happen to you,
how do you overcome that bad self-identity when you’ve had this big
setback.

Juan: I think it’s just a willingness and a deep interest in wanting to be
part of something that has an impact, so it doesn’t really matter the
number of setbacks you have as an entrepreneur. It’s irrelevant, I mean,
you just have to get up in the morning and keep going and trying to have an
impact with whatever you do. And that’s what got us up in the morning, just
wanting to do something cool and I think most entrepreneurs share that, I
really do.

Andrew: Who did you admire as a kid? For me it was E.C. Forbes, the Forbes
Magazine guy who comes in from Scotland with nothing, decides that he’s
going to create a magazine which back then you needed a lot of money to
launch a magazine, you needed connections. He didn’t have either of them,
and he built up Forbes Magazine. What about for you? Who are your heroes
that you said I want to leave a mark like they did?

Juan: Sure, so definitely the first person that comes to mind and this
might sound corny and all but it’s my farther. My farther came up from
nothing and financially he was literally poor. His family could barely
afford buying shoes. So, he came from a very, very small town in Colombia
and through hard work and entrepreneurship, he’s the greatest example of an
entrepreneur that I have. So, I grew up seeing how entrepreneurship was
possible and sitting down at dinner tables and having long discussions
through dinner about the next thing that he was going to be working on or
idea that he had in a very nuts and bolts kinds of ways, right. Not how
I’ve been able to do things which is . . .

Andrew: Like what? What’s a nuts and bolts conversation that you guys had?
What business was he in, and what was an example of one of them?

Juan: Just basic things like negotiating the purchase of a piece of land
for cattle ranching. But his core business is actually in liquor
distribution so he owns a large company distributing liquor and Red Bull
and a few other products, mass consumption products in South America. And,
just seeing the process how he built that company from nothing to what it
is today has been incredibly inspiring yeah.

Andrew: The company that we talked about earlier was called terrispondo.com
[SP], right?

Juan: That’s right.

Andrew: What happened to it?

Juan: So 2003, 2004 literally between those two years which we grew
exponentially from my garage again, lacked resources. From my garage in
Miami, we set up a small little call center and had two or three employees
calling companies in Brazil. From Miami to Brazil speaking in Portuguese
where you can find a few Portuguese speaking people here in Miami. Calling
people in Mexico and Argentina and Colombia and getting them to sign up as
customers. So, real quickly we then went to Brazil, I set up shop in Brazil
for about a year, the end of 2003 all the way to the end of 2004 and then
started hiring.

We grew to about 55 employees towards the end of 2004 and already at the
time Google and Yahoo were competing head on in a very aggressive war to
dominate the PPC space, so, you know, Google with Ad words and then Yahoo
having acquired Overture they were very aggressively competing for a market
share, and when they came to Latin America both companies saw that we were
there, that we had a dominant position in this space and we sold the
company to Yahoo in 2005.

Andrew: For how much?

Juan: It’s never been disclosed.

Andrew: No, it really hasn’t. My researchers tried to come up with a number
and we couldn’t.

Juan: To be fair, I wasn’t going to retire from that sale, but it was more
than anything a rewarding experience having gone through the process of
essentially bankruptcy to being able to say that we sold the company to
Yahoo is very rewarding for all of us that were involved in that.

Andrew: Were you a millionaire as a result of it?

Juan: I suppose.

Andrew: OK. What is I suppose mean, by the way? I said OK, like I
understood, but I don’t get it?

Juan: Yeah.

Andrew: You are OK. This is 2005, you own the company completely at that
point or was it still the old investors who put up money?

Juan: 2005?

Andrew: Yeah, because you did go through essentially, you said, a
bankruptcy and then . . .

Juan: So, essentially at that time by 2005 when we sold the company the two
major shareholders were my co-founder, Daniel Chavaria [SP] who was the CFO
of the company and myself, the CEO, and then a few of our employees. So, we
at that point we haven’t really raised money. Yeah a little . . .

Andrew: It was a brand new company even though you had the old server that
launched you.

Juan: Yeah, brand new company, yeah.

Andrew: OK.

Juan: Incorporated, brand new corporation and everything and we did raise a
little bit of money from friends and family, specifically my family who’s
helping out. For everything that I’ve done, I owe everything to my family
and so, yeah, fortunately by the time we sold we really didn’t really have
a long list of shareholders.

Andrew: I think we’re going to get a sense of what your family was like
when I ask you later on about the Playboy Magazine and catholic school,
especially about your dad, but let’s hold off on that until later on in the
interview. I want to understand what happened next and it seems what
happened next is 2005 you founded Strat Investments, a virtual real estate
company is how my researcher put it, right?

Juan: So, Strat started off as virtual real estate and now has moved on a
little bit to expand into real real estate, actual physical real estate and
continues very involved in virtual real estate so . ..

Andrew: What is virtual real estate?

Juan: Essentially, we started buying very, very high value premium domain
names in dotcom.

Andrew: Like ParisHotels.com, NewYorkHotels.com, LondonHotels.com, that
gives us a sense of it.

Juan: That gives you a sense of it so these are generic terms with a lot of
value just because people are searching for the term on Google, Yahoo,
whatever or social media. If you’re going to Paris the first thing you
search for most likely is hotels in Paris or Paris hotels and having the
matching keyword, at the time, was incredibly valued and continues to be
incredibly valued. So, through Strat we learned a lot about the value of
domain names and investing in domain names, so it’s worth nothing that
there’s this whole side of the domain world which is cyber squatting inside
and, and we stay very far away from that, and I like to make the
distinction.

I want your audience to understand that there is a difference between the
cyber squatting side, the people who buy thousands of domain names related
to trademarks and domain investors where actually people that are buying
generic terms and building cool stuff on that. So, so yeah we build the
company around these names and the travel space. It’s now called Federated
Travel, has its own team, where there’s about 20 people working on it.
Federated Travel, it has its own CEO. So, that was the first, I guess,
incubated company that came out of Strat.

Andrew: And was it the only one?

Juan: No, dotco is also . . .

Andrew: Oh, really?

Juan: . . . by Strat. It was the next big project that we had through Strat
but again, you know, now dotco is its own entity. I’m the CEO of dotco, and
Strat now has its own lead person in charge who’s Jose Rasco [SP] great,
great partner of mine, yeah.

Andrew: Was Strat self-funded?

Juan: Strat was self-funded yeah, so from sale of Teraspondo we funded the
initial investments in that Strat has made. So, all of the stuff in the
portfolio domain names, some of full angel investment that we’ve done since
in companies, like, invest in FastRabbit.com, GetAround.com, a few other
cool companies out there that we’ve invested in. But that’s all through
Strat.

Andrew: By the way, it seems to me like this dream that you had as a young
entrepreneur who launches first business is being realized, isn’t it?

Juan: Well, yeah.

Andrew: You know, not the jets but . . .

Juan: No, yeah, not the jets and I got to tell you the jet is no longer
part of the . . .

Andrew: Right, but the idea that you can bring a company to life. That you
could have all these people be a part of your company, the idea that you
could make an impact on the world, I mean we haven’t even gotten to the
dotco part where you clearly are making an impact in the way that we talk
about dotcoms, on the way that, not dotcoms, top level domains, the way
that we don’t just think of dotcoms. The way that dotco seems to be more
respectable now than dotnet even though dotnet has been around for much
longer. You do seem to be having this impact. Do you feel it or am I
exaggerating because I’m getting lost in your story here?

Juan: No, no, absolutely not, I do feel it and it’s what keeps me very
motivated in the mornings when I’m on my way to work. So, except for that
period between 2000, 2001 and getting caught up in the bubble, except for
that piece, I always been passionate about building stuff, just building
cool stuff. And that’s why I studied industrial engineering, why I tried to
study industrial engineering. I actually couldn’t graduate but just
building stuff is very, very exciting and when I see, when I look back, you
know, things like federated travel or, or what we’re doing with dotco and
seeing how it’s being built that’s cool, that’s very, very cool, very
exciting.

Andrew: We talked to Lori in your office to prep for this interview, and
she said that the idea for the dotco top level domain came as a result of
looking around and seeing how challenging was to come up with a web domain.

Juan: Yeah, so in the whole period between 1999 to 2007 when I first
learned about the opportunity to do something with dotco, I had gone
through the problem, which I’m sure millions of people go through which is
going to a website like GoDaddy.com or NetworkSolutions and whatever,
trying to find a name for that dream business or the big idea that you had
and in middle of the night and you woke up sweating at 2:00 a.m. and you
get up and try to register the name and it’s taken. Right?

Andrew: Yep.

Juan: How many times have we all gone through that? So, there’s 100,000,000
dotcom domains registered, 100,000,000 a lot. Most of them, I would argue
are, are crap, they are just sitting there in a waste land. So, I really
think that we identified with the fact that there had to be an alternative
that could solve that big problem. So in 2006, 2007, or late 2006 maybe
early 2007 a colleague in the domain industry came up to me and said, “Hey,
you’re Colombian, did you know about dotco?” I’m like, “What are you
talking about? I’ve no idea what you’re talking about.” But then he said,
dotco, considering the saturation of dotcom and dotnet and these extensions
could be really, really cool. And immediately, I mean, just boom, light
bulb moment kind of thing and started from that day on, I started pursuing
in a pretty aggressive way.

Andrew: Now, I say to the audience, I can imagine already what you guys are
thinking, the guy gets dotco. Of course, it’s going to be a success. But
guys, think about your own personal portfolio of domains. We all have them
because we’re all hoarding them for just in case we ever launch an idea.
How many of you have dotbiz because that was going to be the big one? How
many of you have dotnet because you were getting it just in case dotnet
might eventually do well? Or dot I don’t know what Jason Calacanis, a buddy
of mine, had dotis as his website. It was launch.is because that seemed
like it was going somewhere. A lot of these didn’t end up going anywhere,
it’s not just because you have a top level domain, boom, you’re going to do
well, there’s still some marketing and we’re going to get to the marketing.
First, I want to get to how do you get to run a business around this?
Because first of all, before they even considered you for a long time,
Colombia didn’t want outsiders to have, to have websites on their domain,
right?

Juan: Yeah, so back in 1999, I got again the, this idea wasn’t mine, back
in 1999 the government was already toying with or had identified that they
had an incredibly valuable asset in dotco. That was already evident back in
’99 particularly in the middle of the bubble. Companies were, were flying
to Colombia and, and proposing deals of millions and millions of dollars to
do something attractive with dotco. At the time it was run by a university.
It was a private university and it tried to issue an RFP to try to
commercialize dotco globally and the government stepped in and said, hey,
wait a second, you’re a private university, we don’t think you have the
regulatory oversight to do this, because really it’s an asset of the
country of Colombia.

So, for the next ten years the space was in this legal limbo, who does
dotco belong to and how should it be run? There were all of these different
public forums where eventually we participated starting in 2007. You’d have
twenty, thirty different companies participating in the forums and helping
the government shape how dotco should be run. By 2008, they came out with a
new policy on how dotco should be run, and it was clearly evident that it
had moved from this very restricted space, limited to Colombian use to
becoming or at least they implemented the policies that allowed it to
become this massive domain extension that it is today. So, that was 2008.
In 2009 the government issued an RFP and invited participants from all over
the world. We obviously participated. I partnered with a company called
Newstar, a U.S. based public company that runs a telecommunications
infrastructure and a few domain extensions. So, they have a lot of hardcore
technology to run DNS, essentially. So, we participated in the bid and won.

Andrew: I understand what they bring to it, they run DNS, they understand
how to deal with the tech side of this very tech heavy business, and they
have experience. What was the part that you were bringing?

Juan: So, the Internet marketing side was clearly our value add in the
venture, and the vision of how they should be run.

Andrew: You knew how to get people like me interested enough to do an
interview on a top level domain. Essentially, you knew how to get people to
want to buy this and be a part of it.

Juan: We had a big vision of how it should be run, I think that’s what
enticed Newstar to actually partner with us. What is interesting is, back
in the days of the public forums, 2007, 2008, anybody who was interested
would go to the forum and you’d have twenty or thirty people hanging out
trying to figure out… it was like playing chess… trying to figure out
who are you and what do you bring to the table? Should we partner or not
partner? A lot of back and forth and interesting discussions taking place
before the government actually submitted the bid.

So, what we said was, look, we have a big vision to really ingrain Dotco
into the fabric of the Internet. We want to build Dotco into a global
brand. So, we painted a very big picture of what we wanted with Dotco and I
think that motivated a company the size of Newstar… Newstar is a very,
very large company… to say, OK, we’ll partner with you to do this. We’ll
provide DNS, we’ll provide a lot of that hardcore infrastructure that runs
Dotco throughout the world.

Andrew: A big company that also bid, that you guys out bid and beat, was
VeriSign.

Juan: Yeah.

Andrew: One of the things that my researcher found was… well, here’s what
she said, and I can’t tell if this is Ari or Andrea who put this research
together, sorry guys, but it’s really good research on Juan that I have
here. Basically, it says the bureaucracy gave Kaya [SP], the local man, the
contract. And what we were seeing online was basically that because you’re
Colombian, it helped you win. Now, that I’ve got you here, how big of a
part did that play? Honestly.

Juan: It was huge.

Andrew: It was?

Juan: Absolutely. It was absolutely huge. There are soft reasons for that
and hard ones. Let’s talk about the soft ones. First, the soft reason is
very simple, dotco is a matter of national pride to our country. So, it
landing in the hands of someone who wasn’t Colombian wouldn’t care for it,
from that standpoint, from the standpoint of national pride that would be
detrimental to the asset. And then that, I’m mixing in a little bit of
personal opinion in there as well, but I would think that offal’s in
Colombia also felt the same.

But then there are hard reasons for it as well. The bid clearly spelled out
that if you were, if the component, if the company proposing to run Delco
was largely Colombian, you would be awarded more points. There was a
specific scale where if you were 25% owned by Colombian, you would get this
number of points. If you were 50, 75 or 85 you would get more points.

Andrew: And you were part of the group of people who pushed for that to
happen.

Juan: Yeah, absolutely. Pushed for it very aggressively long ways. Again,
obviously, a lot of the Colombians that were participating in the process
were pushing for that. It was just common in any government political
procurement process. You want a local partner to have a say in how the
local asset is being run.

Andrew: You know what, if I were going to, if I saw this opportunity, and I
knew that it was the government that was in control of it, I would just
walk away. I would say these guys are just not as rational as me. It’s
going to be about this whole bureaucratic draconian system that I don’t
want to be a part of. I want to be a part of the Internet where I can just
come up with an idea and put it online but then I would have missed out on
this big opportunity that you saw. You’re smiling, you recognize this
attitude. What did you see? Help me understand how you, a guy from the
Internet, were able to accept this process so that maybe I can jump on an
opportunity like this in the future instead of having this attitude towards
the government.

Juan: I think you nailed it. Definitely the fact that this was a public
procurement process really scared many entrepreneurs away. But then again,
the companies that we were competing against, or the companies in the
states all have experience with government. So, we know VeriSign had a lot
of experience with governments. New Star handles a huge contract with the
Department of Commerce so there’s already a lot of experience from the big
guys. It’s really entrepreneurs who shy away, like you said; the Internet
guy shy’s away from this sort of environment. Now, I think we, the reason
why we were able to overcome that fear, that annoyance of having to deal
with bureaucracy was the end game, right? The vision and seeing, oh my
gosh, there’s this ginormous opportunity to have an impact, a really big
impact on the Internet and we’re just going to have to learn to deal with
the public procurement side.

So, we dug in. I personally had some digging to understand hoe procurement
works, its super super complex, particularly in Colombia it’s very legal to
stick when they are joint ventures, international joint ventures involved,
international treaties involved, that’s one thing. Very enriching
experience but very intense in terms how you can learn something new in
something very quickly. So, between 2007 and end of 2009 I pretty much had
to learn the entire public procurement law of Colombia to be able to
participate in this successfully.

Andrew: We ask Lori Jeremy, our producer did, what’s the first step you
took? And that’s a usual question that we ask entrepreneurs and usually it
has something to do with technology that they build. Their talking to
customers and that’s the first step. Her answer surprised me. It was, one,
put the team together to learn to sway public policy and he put it was a
lot of team building here. Who did you need to put together to know that
you can make this all work and then guys, I promise, we’re going to get
next to promotion and how you did you launch. But, who’d you get on your
team?

Juan: Yeah, so, we understood early on that we didn’t have, we had a lot of
experience running marketing companies online and building technology
around marketing. But we didn’t know anything about iCam. For example, an
iCam is sort of the U.N of the Internet. They assign domain extensions and
that’s a whole other hour of conversation, but I didn’t know anything about
(?), and that was an important piece of this, and didn’t know anything
about, again, public procurement and the legal side of public procurement
in Colombia and international joint ventures. The first guy, going back to
these forums, I had early-on identified a guy that clearly seemed to know a
lot about I-can, and about running all of the regulatory aspects of running
a domain extension. He happened to be in Colombia. His name was Eduardo
Santollio[sp], and he had run dotpe, the country code for Peru. He happened
to be Colombian, which was fantastic. I started having conversations with
him, and we reached an agreement. He came on board. He was the first guy in
the company, senior guy. He actually has a little bit of grey hair.

Andrew: [laughs]

Juan: [laughs] He’s been with us ever since, so he’s now our Vice President
in the company, and co-founder. He helped me really understand the big
picture of what the regulatory side is, and that made the process that much
easier.

Andrew: That’s something that I need to learn more of and maybe need to
emphasize more in these interviews, that people like you who get things
done that you’ve never done before, you partner well. You find the one
person who has, who you can team up with. You find the one company that has
the credibility or the experience, and you team up with them. I tend to
think of entrepreneurship as more of this ‘one man against the world’, or
‘a two man team against the world’, and that’s not what I’m hearing in the
interviews. I need to spend more time on that.

Juan: Yeah. I definitely think that’s one of the valuable lessons that I’ve
learned, is whenever I try to do something entirely on my own, I fail. I’ve
learned to partner well, and we have great people in the company, and I owe
all of the success of the company to them.

Andrew: All right. It was a three stage launch, and I want to understand
the three stage launch, and then I want to understand why anyone else who
just hears this three stage launch and tries to duplicate it is going to
fail, because there’s some magic there that it doesn’t capture. But first,
we have to get the basics down. The three steps were Sunrise, number one,
Landrush, then… here. I’ll put my fingers up. Sunrise, Landrush, and
General Launch. Sunrise was what?

Juan: We’re talking 2010 now. We’d been awarded the opportunity to run .co,
and we’re going to launch. You’ve got to keep in mind that prior to us, .co
was very restricted, you could only register names. For example,
google.com.co. That’s literally the web address that Google uses for
Colombia, and continues to use. Any company in Colombia uses .com.co. What
we were launching is dotco, in and of itself, just the letters C-O.

Andrew: Just Google.co instead of Google.dom.co?

Juan: Exactly, or g.co, or 500.co, so it’s essentially launching a brand
new space, and in doing so, you have to combine, I guess, two things very
carefully, and very tactical needs. For example, addressing trademark
concerns, which is one of our biggest issues in all of this, is trademark
abuse. How do you protect trademarks?

Andrew: You didn’t want me buying Google.co, and then going to Google and
saying, “Hey, guys. Got some cash for me? Hey, guys.”

Juan: Exactly.

Andrew: Yeah.

Juan: [laughs] “Hey, guys.”

Andrew: [laughs]

Juan: So, how do you protect that? But you also have to combine that with
marketing biz, and generating excitement prior to the launch. Think of it
as doing an IPO. As much as Facebook tells you that this is their IPO on
Friday, or whenever, is a non-issue, they’ve been marketing it in a very
subtle way, and building excitement.

Andrew: Tell me about your subtle way. We’ll get back to these three steps.
If there was a behind the scenes, and even before all of this, this buzz
generating, I have to learn it. What did you do to create buzz?

Juan: It was a very clear thing we did, which was find high-profile use
cases, very, very high-profile use cases before we launched.

Andrew: For example?

Juan: Twitter.

Andrew: You knew that you wanted T.co for Twitter because?

Juan: Or rather, we knew that we wanted high-profile use cases, and Twitter
happened to play ball.

Andrew: OK.

Juan: Overstock played ball, and a number of other high-profile
entrepreneurs, for example, Naval Ravikant from AngelList. He wanted to
build a network of angel investors and companies who wanted to come
together under one roof.

Andrew: So you put together a list of all these high profile companies that
you wanted, a hit list, and then started talking to them?

Juan: Pretty much, yes. A very, very long list. Very few responded to us.

Andrew: Very few?

Juan: Oh yeah. It was, we would call some of these companies and tell them
we were launching .co and it was like, why, there’s already .com and .biz
why are you going to be successful or .info? So a lot of skepticism, a lot,
and that was probably the most challenging aspect of launching the company
is just the adverse reactions we would get from people before we launched
and Oh, you’re from Colombia? What do you mean you’re from Colombia?

Andrew: What kind of deal did you give Naval from Angel List?

Juan: So what we did was to get these early adopters excited we created the
co-founder’s program, right? The play on co and word founders and there
were terms and condition and we would send them the terms and conditions
and we would tell them look, you will have access to a few very premium
names but only if you build something cool on them before we launch.

Andrew: And they had to run this cool thing by you?

Juan: We had a specific launch date of July 20, 2010 which happens to be
the day of the Independence of Colombia.

Andrew: Cool.

Juan: And we had set that date very clearly from the very beginning, six
months before, and we told these entrepreneurs or these companies and we
said you have to launch something big before July 20, 2010 and if you do
your in terms and conditions and you get the name. So, for example, a guy
in the mall Angle.co which is now an amazingly thriving website, Twitter
got t.co for the URL shortener and a number of those.

Andrew: So, they get it for free but they have to do something big on it.

Juan: Yeah, they had to do something big.

Andrew: And they’d run that by you beforehand. You have to talk to them and
if they say, hey you know what, on t.co we’re going to have our Internet
for all the Twitters and we promise we’re going to have 1,000 people
working the Twitter scene. Say now that’s not exactly what we’re looking
for, how about, but there was this negotiation?

Juan: Literally, how you put it?

Andrew: And it was for free?

Juan: It was a back and for discussion on what are you going to build? Is
it going to have a big impact on the .co brand? Is it going to be something
positive for the .co brand and we would say yes or no. Yeah, of course it
was free.

Andrew: OK and you can’t buy the kind of recognition you get and the
credibility that comes from every tweet being every URL in a tweet
basically going through you.

Juan: That’s right. That’s right. So before we launched, going back to
those subtle things we did, it appeared to be subtly but it’s not so subtle
and there was a massive effort behind to get these companies on board using
.co before we launched but what makes it subtle is sort of the little press
release that comes out and says hey, Twitter is going to do this and [?]
and oh, how cool and people start asking questions, oh what .co? Oh, yeah,
something launching July 20th and so, we and we started fueling that with
online media. So, started [?] with a very clear message of the .com URL is
coming. So it’s, again, this wave of expectation. What do you mean the .co
URL is coming? What does that mean? And it worked. It worked really well.
The first minute after our launch we registered I think 8,000 domains in
the first minute and then by the end of the first 24 hours we were up to
200,000 names.

Andrew: 233,000 Lori told us. Lori’s good. So the three stages were
sunrise, where you went to big brands like Nike, BMW and you said guys,
we’re going to give you your .co. We’re not looking to allow anyone to rip
you off and to impersonate you online. This is going to be a legitimate top
level domain and you make sure that they had it. 80% of the top fortune 500
brands locked in their .co. That was the first stage. Second stage was the
land rush; this is before the general public had a chance to buy domains.
You sold the high value name like shoes.co and shirts.co and these guys had
to pay a premium for that right?

Juan: That’s correct and then showing that for the first few [?] for
sunrise for trademarks. We actually identified the top companies of
trademark owned in the world and we actually gave the name to them. We
didn’t charge them. We know that Nike is not going to rebrand to Nike.cove.
They’re going to keep using Nike.com, Apple is going to keep using
Apple.com. We didn’t want those names to end up in the hands of a cyber-
squatter and we didn’t want to extract money from the brands because all of
a sudden we were launching this thing called dot cove. We identified those
companies. We [??] big consultancy, helped us identify who they were and we
just gave it to them.

Actually, 100% of the list that we created said yeah, we’ll take the name
and protect it. It ties into something to an important piece of all of
this. We know that the last 25 years of Internet were built on dot com.
We’re not going to change that. What we can change is the next 25 years.
How do the next 25 years get built? We’re hoping that the web gets built on
dot cove, that’s what we’re shooting for.

Moving on to the next stage, that was Sunrise, moving on to Landrush. This
was a month before the actual launch and it was an opportunity for people
to identify needs that they really felt that were valuable and they could
say, that they could claim them by saying I want that [??] name, but if
there was a competing interest or a competing bidder that they would go to
an auction. So we sold names that obviously were, you know, in thousands of
dollars or tens of thousands of dollars.

Andrew: What was the most expensive one?

Juan: During Sunrise, I’d say, sorry, during Landrush, I’d say, I don’t
recall, but at least $50,000, 45 to $50,000.

Andrew: I got “mesothelioma”. I guess that term sold for $80,000.

Juan: There you go, that shows you how time flies around here.

Andrew: Oh, the Lord is good, but I’m surprised that anyone would expect a
potential claimant to type in mesothelioma perfectly dotgov, but I guess
they did. Aspen.gov sold at auction and so on. Then the third stage was
launched, that was when anyone got to go in. This was July 20, 2010.
80,000, as you said, names sold within the first minute, excuse me, 8,000
within the first minute. Yeah, I saw the look in your face. I said I got to
go back and look at my data, right. 8,000. Lori also told us that you guys
did not sleep during any part of this. What about this fear, said that 2 to
3 hours of sleep were normal, 2 a.m. phone calls was normal? How do you
function at that point? How do you get people to keep going at that point?

Juan: Yeah, so we made a big bet in January, 2010 and that was to establish
a launch date. We said we’re launching July 20, rain or shine. That set up
the entire processing in a very fixed manner, right? There were no, very
little flexibility to move dates, but the value of doing something like
that and I think that this is valuable feedback to any entrepreneur. It
allows people to focus on that date, not only your employees, but your
partners, your investors, and your future customers. They actually mark
that date in their calendar and they say that product is going to launch on
such and such date and they mark it in their calendars.

That was very, very valuable to us, but the challenge of doing something
like that is, if you want to be credible you have to stick to the date and
that things at Intek [sp]. We all know that things fall apart and [??]
don’t happen that the way that you think they’re going to happen, so there
were a lot of sleepless nights to meet the…

Andrew: The final question is this, since we’ve been losing the connection
on and off, the story from Catholic school. The one about your early
entrepreneurship, what was it?

Juan: Sure, it’s kind of embarrassing. So, back when I was maybe 8 or 9, I
don’t know the exactly the age, we used to, in the neighborhood back in
Colombia. There was a little security, sort of a little cabin in a corner
where we used to wait for the bus and in that cabin the security guards had
porn magazines. So, that was my first venture. I was in the business of
page views.

Andrew: You bought this magazine or you took the magazine from the guard?

Juan: I would borrow it.

Andrew: Borrow it and then what would you do with it?

Juan: I would borrow it and, while in the bus on the way to school, I would
rent them out to very willing, curious young friends of mine who were just
learning about the world of porn. So, we were 8 or 9. It was beautiful. It
was my first real entrepreneurial experience. Not proud of it.

Andrew: Did you get in trouble?

Juan: Yes. It didn’t last very long. It lasted six days. Until one of the
teachers on the bus discovered the whole venture and called me up to the
front of the bus and said. “Hey, let me see your bag” and she pulled out
the material. I got suspended from school. They called my mom in to talk to
the principal. Keep in mind this is a very hard core Catholic school. My
family very hard core Catholic. And my mom came in bawling hysterically in
front of the nun who was scolding me for my sinful acts.

And obviously, it was a tough moment for my mom. But then I went home and I
thought my dad is just going to spank me “I’m dead”. He’s never going to
see me again. I had been told to go to my room. Lock myself, that kind of
thing, until my dad came home. Finally, he comes home late on that day from
work and he knocks on my door and I’m freaking out. Freaking out. What is
he going to do. And he walks up, he smiles at me and gives me a high five
and walks away. That’s it.

Andrew: Like you said, he was supportive of entrepreneurship.

Juan: Absolutely. Yeah. So I guess he realized his son was on the right
track.

Andrew: You’ve really come a long, long way since then.

I’m going to end the conversation here and not because I don’t want to talk
anymore but because we’ve had some tech issues towards the end and I don’t
want to risk it. Plus I’ve kept you on way longer than we intended because
I was so into the story. I’m going to do what I hope what everyone in the
audience does at some point here, which is I’m going to say thank you for
coming in here and doing this interview.

I know that you didn’t do it because, frankly, you in the first day of
selling domains probably sold more than you are going to get from just
doing this interview. But I’m hoping that my audience, in the good will
that you built with them, will come through over the years and this time
that you’ve invested in us worthwhile for you. And I’m going to say what I
hope many of them will say, which is thank you for doing this interview.

Juan: Thank you so much, Andrew. I really, really appreciate it. If
anything, I hope a few people, a few more people learn about dotco and how
we’re changing the Internet. It’s pretty cool.

Andrew: Between you and me, if anyone in my audience didn’t now about
dotco, they do not belong to be in my audience. It’s like if, earlier on I
said, it was dotnet and they go, “dotnet?” A few said, “Ask [??]” and I go,
“Ask who now?” There are certain things we just expect you to understand as
you come into these interviews. Anyway, dotco is one of them and I
appreciate you doing this interview about how you built it up.

Juan: And if you want to see more, some of the sites using it, go to Go.co.

Andrew: Go.co. I will, of course, link it up.

Thank you all for watching and, Juan, thank you for doing this interview.

Juan: Thanks a lot, Andrew. I appreciate it. Take care.

Andrew: Bye.

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  • http://www.mobileapptycoon.com/ Thomas @ Mobile App Tycoon

    Very interesting interview!  I’ve seen a lot of .co domain names recently being used by small businesses, musicians, etc.  Very intriguing to hear the back story on them!

    Thomas

  • http://mixergy.com Andrew Warner

    Yeah. This is why .co worked.

  • http://www.constantclick.com/ JeanPierre Khoueiri

    AWESOME Interview, seriously, my favorite so far. I’ve been buying .CO’s for a while now and they all rank right away on Google for really competitive keywords. I’ve been doing SEO for 7 years and have never seen any other domain extension rank this fast and easy. I wish I would have bought more in the beginning, now people are asking for high prices on the secondary market. Funny story: right before I clicked play on the interview I sold a LuxuryRealEstateMiami.co for $2500. 

  • Rob D

    Interesting. Do you have any examples of some particularly competitive SERPS where a .co is ranking top five? 

  • http://mixergy.com Andrew Warner

    Why do you think .co is ranking so much higher than other TLD’s?

  • http://www.constantclick.com/ JeanPierre Khoueiri

    Hi Andrew- Matt Cutts would be much more qualified to answer that, however, my guess is that Google realized people are using .co for legitimate purposes and adding value with sites that actually matter and bring originality to the table.  For example if you Google “domain investing” you’ll find Nima.co which is run by Godaddy account exec Jacob Nima. 

  • http://www.constantclick.com/ JeanPierre Khoueiri

    Hi Rob,

    let me try and compile a list and I’ll get back to you. You’ll see above I reference Nima.co Google “domain investing” for example and you’ll see it. I launched websitespeed.co and it was on page 1 month with almost not effort, but I brought the site down as I wanted to focus on my core SEO business and Email Marketing company. 

  • Rob D

    Hey thanks Jean.. If true, this is great info. There are currently about 4 available .co domains that are 5-10k exact matches directly related to a membership site I’m working on. Great KWS in general, but especially in the context of my site. I say “if true” because I’m sure you understand my hesitation when someone says something like “rank right away” and “fast and easy”…I just assume either the SERPS weren’t very competitive or that person has other motives. I hope that doesn’t offend you as I’m not trying to… it’s just that nothing lately in Google happens “fast and easy” and as a marketer myself I’m always questioning motives. Either way, I appreciate your input and I guess I’m headed over to Name Cheap to drop $100.00 on domains. Again, thanks a lot.

    …and great interview Andrew…Juan seems like a nice and deserving guy.

  • Chuck Wallant

    Great interview, Andrew. Juan is a classy, entrepreneurial business man.

    I first learned about him on Domain Sherpa at http://www.domainsherpa.com/juan-calle-dotco-interview/. You and Michael could be brothers…you’re both awesome interviewers and look almost exactly alike! ;)

  • http://www.go.co/ Gretchen

    Hi guys,

    Just want to chime in here. .CO
    sites are actually treated the same as a .com, .org, etc. Here is a video of
    Google’s Matt Cutts explaining: http://www.go.co/about/seo/.
    .CO websites have the exact same potential to rank for key terms as other
    domain extensions do, and the same best practices used for a .COM website also
    apply to a .CO website. Many
    .CO websites are seeing awesome results for competitive Google search
    terms.  We prefer not to point to specific cases because of the
    variability in the SERPs these days, but as JeanPierre mentions, http://www.nima.co ranks well for “domain
    investing”. For
    general questions, check our FAQ for frequently asked questions about .CO
    websites: GO.CO | FAQ | .CO vs. .COM
    and more.

    I
    must confess that I am a bit partial–I have been in the industry for over 6
    years and I now oversee SEO for the .CO domain, which entails helping
    some of our customers make the transition to .CO seamlessly. 

    Hope
    this helps! :)

  • http://mixergy.com Andrew Warner

    Thanks for helping, Gretchen!

  • http://mixergy.com Andrew Warner

    This is how incredible he is: http://mixergy.com/how-a-mixergy-listener-got-sal-kahn-his-dotcom/

  • http://www.tcc5.com/reverse-mergers.htm Reverse Acquisitions

    Good interview, impressive story and turnaround. Makes me consider a .co url for our firm, we take companies public and need to reach them to help them.

  • Rob D

    Thanks, for the reply… but I don’t take everything Matt Cutts says as gold. I know for a fact that a .com has a ranking advantage over a .biz for example. 

  • http://www.facebook.com/people/Corine-Justin/100003757885908 Corine Justin

     just as Jeffrey explained I am alarmed that a mom able to profit $5474 in one month on the computer. have you seen this site makecash16com

  • Iain Dooley

    Haha I can’t believe I haven’t got to hear you call someone an evil son of a bitch :D