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Interview with Bob Parsons, CEO of GoDaddy

GoDaddy.com founder and CEO, Bob Parsons, shares his insights into entrepreneurship, the future of online media, and the power of risk taking.

Interview conducted by Nathan C. Kaiser on Wednesday, December 7, 2005 in Scottsdale, AZ.

Mr. Parson, can you give us an introduction into GoDaddy?

GoDaddy.com is a domain name registrar. And beyond that we do everything that enables the use of a domain name.
GoDaddy.com includes hosting, scripts and other services?

Everything that would enable Internet use, such as email, web hosting, secure certificates, website software, etc.
Mr. Parsons, you started GoDaddy.com in the late 90′s and had actually thought about closing the company down. Is that correct?
When I started GoDaddy in 1997, we had lots of money, but didn?t really have an established business model. I hired a number of very intelligent people and we tried all sorts of things and nothing really worked. We tried being an ISP, we tried cracking into the education market, we tried selling hardware and nothing really did the trick for us. In 1999 we decided to become a domain name registrar.
Why did you pick this market?

We decided to target this market because it seemed overpriced and underserved. We made the commitment to become a registrar. It ended up taking over a year and one million dollars to implement. After we sold our first domain name in November 2000 the company still didn?t take off. We were burning cash at a rate $300,000-400,000 a month and it was all my cash since I was the only investor. At that kind of burn-rate and since the business wasn?t taking off I decided in early 2001 to close the company. I ended up taking a trip so I could spend some time deciding how I wanted to close the company; severance and creditors, liquid assets, all that sort of thing. While I was away I decided that that?s not what I wanted to do and that I would see the company through even if it meant that I would go broke.

What was it that led you to make that decision?
It?s a simple thing. I saw a guy parking cars one day and the guy seemed really happy doing that and I decided that if the business went broke then I could always park cars.
There were a lot of options open to you?
Exactly. It really wasn?t that bad. And so I came back and as fate would have it the company turned the corner in October 2001. The thing that really helped the company was the dot-com crash.
Really? How so?
Yeah. Well we were one of the few dot-com companies that were paying their bills. People that wouldn?t even talk to us for advertising or advertising that was initially prohibitively expensive all of sudden became very affordable and we had people lining up to do business with us.

That is a very interesting perspective on the dot-com crash.

Before the crash all the high priced ads kept us from being noticed, and with the crash those prices vanished and we could finally get noticed.
It the ability to advertise that allowed you to finally get your name out there and get the visibility you needed?

Correct.
And what?s interesting here is that a number of CEOs that I featured have all talked about the benefits of being in business after the crash. That it instilled in them a business philosophy of saving cash, being tight with every nickel as well as maximizing all of their opportunities such as the advertising.
You know I?ve always been tight in some respects and very willing to spend money in other respects. I?m tight when it comes to office furniture. I like that stuff to look very spartan. But when it comes to infrastructure like servers and what I give my troops I buy the very best. So you know being in business after the crash was kind of a good thing for us because we were able to stand out and we were able to purchase a lot of advertising.
Well if you don?t mind I?d like to go a little bit farther back into your entrepreneurial background when you started Parsons Technology.

The way that Parsons Technology came about was simply from having been a computer hobbyist since the first Apple PC became available and then when the first IBM became available in 1980. Being a CPA by education I ended up writing a money management program to take care of the finances for the family.

Have you always been a build it yourself kind of guy?
One of the unique things that I did compared to others is that I never bought anybody else?s software. If I wanted my computer to do something I would write the software for it to do it. I wrote this money management program that balances the family checkbook and on and on. And overtime it occurred to me that it worked pretty well and that maybe I should try selling it. In November of 1984 I opened a little business in my basement called Parsons Technology and decided to sell the product and I decided to sell it like everybody else did. At the time I had $15,000 cash to my name and lost all of it by the end of the year, trying to sell a product that was priced at $99. In the second year I had 25,000 and dropped the price of the software to $69 and then to $49 and continued to improve it and make it better and lost all of that. By the third year I decided to drop the price to $12.00 and purchased some advertising on credit. I purchased the advertising on credit and did a full-page ad. That ad allowed the company to take off.
And then…
Fast-forward to 1994 and the company had 1,000 employees and we were releasing a new product every five-and-a-half days.
And how much in revenue were you making at that time? If you can share that.
Around 100 million.

So kind of a consistent theme I?m seeing here is that you?re very willing to take a risk.

I am a risk-taker, yes.
And would you say that?

As a matter of fact one of the individuals that I work closest with, her name is Barbara, she?s been with me for three businesses. She always says I?m the biggest risk taker She?s ever met.
Now, let me ask you this. When you are looking at taking a risk how do you determine whether or not you?re gonna take it or not? When you?re looking at an opportunity that?s risky, what are the variables that you?re using determine if will take it or not?
Well I have to see the light at the end of the tunnel and I have to feel it in my bones that it?s gonna work. If I do then I?m willing to step up and do what it takes.
So it?s more along the lines it sounds like if it makes sense and there?s an opportunity you?re willing to take the risk.

Yeah. If it makes sense to me. There have been other things that I haven?t done and have been glad about it later, because I didn?t feel that it was something for me to do. I don?t run down every alley. Just run down the ones that make sense. We had the opportunity to get into the downloadable music business a few years ago and we avoided that.

Do you think that was a good decision looking in hindsight?
Oh I think it was as right as rain. I think right now I?d be standing in a business community with a bloody nose and a lot less money.
In regards to you willingness to take risk, have you always been like this or was there something in your life that taught you to do this?
I?ve always been kind of a risk-taker. For example, when I was in the Marine Corp, I served with a rifle company in Vietnam and for awhile I was always happy to walk point which is, as you know, first.
One of the most dangerous…
Dangerous jobs, but I was willing to do it because it came with a lot of benefits. Benefits being you didn?t have to carry much, you were respected for doing that and it was exciting and in my mind it was worth the trade offs, you see.

Yes, definitely.

And that?s certainly a risk. So I guess it just comes in the make up.
Has there been anything from your military experience that impacted the culture say at Parsons? Technology or GoDaddy.com?

Definitely. One is discipline. I like things very well organized. I like visibility on everything. Everything that we do is very tightly managed. I learned one thing from the Marine Corp, which is to take things one day at a time. Take care of business today and don?t lose too much sleep over something that can happen three months from now.
You prioritize on spending money on people and yet not on office furniture.
The chairs and the actual cubicles don?t make us any money. I am the president and chairman of the world?s number one registrar and my office has a $149 cafeteria table. I?m very proud of that fact. And I?ll tell you what my desk is the same thing. I bought the two of them together and got a great deal.
I want to drill down a little bit more into your marketing strategy. You took what it seems to be quite a risk with the GoDaddy Super Bowl ad and it seems to have paid off very well for you.

It did. It paid off wonderfully.

What allowed your Super Bowl ad to be so successful whereas so many others have failed?
The reason our ad was so successful was that it dealt with the current issues. It was as edgy as could be and it struck a cord with viewers. It made fun of all the nonsense about the Janet Jackson fiasco where her bra cup was removed by Justin Timberlake. The whole thing was much ado about nothing. As a matter of fact I watched the Super Bowl that year and I?m a pretty avid viewer and I literally missed it. I didn?t even see it. The hullabaloo that followed was simply nonsensical. We wanted to do a parody of it, which most people found absolutely hilarious. Now the NFL did not find it hilarious and quite idiotically they over-responded, canceled the second showing of the commercial, censored it, which has never happened in the history of this country where you had a commercial run during the first part of the show and then it was censored during the second part. And that made big news.
So it ended up providing free publicity.
Yeah.
Now I?m assuming they didn?t charge you for the second running then.
Well you know I can?t talk about that, but of course they wouldn?t have charged us a second running and we also had a settlement over the whole issue because we had a contract that was broken. I?m not allowed to say what the settlement was but I?ll tell you what I was so happy I was ready to break-dance.

But besides all of that it seems like the free publicity would be more than enough to compensate for the lost ad by far.

It was home run.
Initially domain registrations were really targeted to a select group of individuals. Pretty much high end techies. Have you seen that market expand to a broader demographic?

Sure it has. It used to be cool to have a website. Having a website was trendy and you showed that you were with it and you were the individual that you described. Now that?s no longer the case. Right now consumers expect whomever they deal with to have a website. The Internet now has found its way into the very fabric of our society. Somebody that doesn?t use email and a business that doesn?t have a website is suspect at best. What?s happening now is that we?re finding that if you don?t have a website people think some thing?s wrong with you particularly if you?re a business. So we have this huge migration now over to the Internet of small business and other types of organizations that are getting their presence. It?s really growing.
So it seems to me it went from a novelty to a necessity. Is that correct?
I couldn?t have said it better.
Is that necessity going to translate to where individuals such as myself must have our own websites?

Well you know in some ways there are. We call them blogs. Many people have blogs, but it remains to be seen whether everyone will end up developing their own website. I know we certainly see that happening but who knows which way it?s going. I do know that there is a trend towards everybody having more of a presence online as opposed to less.

You have a very successful blog that you write. How does that work into the strategy for GoDaddy? Or is it independent?
It?s independent.
What is your goal with your blog?
Well my goal with my blog is just to make it known how I feel about particular issues, to give people an x-ray into what it?s like to be a CEO of a corporation and the trials and tribulations that I face as part of my job. But also the techniques that I use in order to handle particular issues. And if you read my blog you?ll find that I pull no punches. It?s not sanitized. I say exactly what I think. And some people will say “Gosh you shouldn?t do that being a CEO. Aren?t you worried about alienating people? Well if you read most CEO blogs you know they?re milk toast, they?re boring. No one wants to read some sanitized piece of work. They might as well read instruction for a toaster. So mine is not that way and as a result it?s one of top 25 blogs out of 11 to 12 million in this country. It also gives GoDaddy a personality.
What are your thoughts on the latest ICANN and the latest controversy in regards to International versus US control?
If you?re gonna do anything you should do it with an eye towards making it better and not doing with an eye just towards bringing other people in. Right. You know we have taken the Internet here and developed it and maintained it and control the root servers and I can tell you those things are attacked 24/7. Maintaining them is no small task and is no small responsibility. We do it and it works. Now just you can look at the rest of the world and look at how they manage their affairs. Look at France how they managed their local ? the riots. It took them how many days…

Over two and a half weeks.

Yeah, exactly. I mean is that who you want managing your root servers? I don?t think so. And you know the same thing for other third world countries. Here they want to be part of this but yet they don?t have the ability, they don?t have the technical resources. It?s nonsense. And so what is important is that the infrastructure works and it?s managed properly. We manage it properly. You know we don?t give one country any more benefit over another. We certainly don?t give ourselves any. So it makes no sense to complicate the situation and to make it an internationally managed structure as opposed to what it is now.
Most of the conversations that I?ve read about have been focused on censorship and limiting access versus a management issue. It would seem that if it isn?t managed properly then all other issues are really irrelevant.

Exactly, exactly. And you know I?ll tell you what, I don?t see too much censorship on it. Do you?
No. Not under the current system. Can you give me some insights into what you look for when you?re hiring an individual to join the GoDaddy.com team?
Well I look for an individual that wants to make a difference. I look for someone who?s excited about the job. I look for the light in their eyes. Intelligence and all those other things need to be there and of course capability to do the job. The thing that we look for above all is for somebody who wants to make a difference.
Someone that has a hunger?

Exactly. We are excited about what we do and we want somebody that?s excited about being part of our team.

You spoke about your ability to focus, prioritize, take risks as well as the ability to find and market the organization effectively with a high ROI. What other insights do you have into successful entrepreneurialship?
Well you gotta have guts. You have to have a lot of guts and a lot of courage because sometimes it gets pretty spooky and the buck stops in your office. So you know you?re the one that?s gotta keep moving forward even though it looks tough. Your troops are gonna look up to you for strength and support. If you don?t have it they?re not gonna have it. You have to have good intuition. You?ve got to be able to stand your ground when you?re dealing with adversaries.
And how beneficial was your military background to your current business success?
One hundred percent beneficial because I learned discipline from the military and I learned how to be in an absolutely dangerous and dreadful situation and get through it and I learned the importance of teamwork.
You know it seems to me that there are times in which the military service is disparaged within the media. Yet everyone that I have talked to in the business world has said that military experience is amazingly beneficial to the individual as well as to the corporations they joined.
Uh-huh. That?s because the military teaches how to get things done as a team.

Is that the key to entrepreneurial success?

Exactly.
What are the key traits that you?re looking for in other people to help to solidify the overall experience at GoDaddy.com?

I look for people who are doers and decision makers. I look for people who are implementers and are not afraid to get things done.
Many of the CEOs that I?ve talked to say that they have certain limitations or less experience in some areas than the people they hire. Would you say that?s true for you as well?
Oh I?d say it?s true in most areas. There are a few exceptions to that. I have yet to meet anybody in this world that can write sales copy as good as I can but then again that?s just my thing. When it comes to technical issues, especially with today?s software and hardware configurations I am not as versed as I used to be. Having to say that I have more knowledge than any of my people in any area is not important at all to me. The only important thing that I know that I need to know is first of all I can spot somebody who has those talents and second that when they produce the final result I can know if the soup tastes good.
You have a blog, a pod cast and a radio show as well. What do you see as the most exciting trends happening in the near future online and in the different media?

I?d say the most exciting trend is the ability for all of us to communicate important facts quickly. Things changed in the current Gulf War when soldiers can blog and email photos taken from their cell phone to friends and family. The fact that we are so wired and that information is shared so quickly it?s almost as though there?s no state secrets anymore. And I think that is very exciting.

Now do you think it could come to the point where there is simply too much content?
Okay, where there?s so much we just drown?
Exactly.
You know that?s a risk that you run but so far we have been very, very smart about filtering what?s important and what?s not and the important stuff is stuff that tends to bubble up.

About nathan kaiser

Comments

  1. You have to love Bob’s honesty. The best part was the comment about always being able to park cars. Love the dangerous attitude!

  2. Constantin says:

    I love Bob’s approach to business! He uses his blog to teach about getting things done and that’s really beneficial for everyone who stops by.

    The fact that his company has a human face (both literally and figuratively) makes me wanna buy domains from GoDaddy.

    I basically believe he gives more than he takes.

    Thanks for this interview!

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