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Sell the Apartment, Keep the Startup (Season 6, Episode 3)

Getting hung up on the truth can be bad for business.

September 15, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is Startup, the show about what it’s really like to start a business.
One thing that’s become clear to me in my reporting on startups is this: being a founder can be pretty isolating.
You’re responsible for people’s livelihoods. There’s this pressure to act like you always have everything under control. And, a lot of times, your friends and family can’t relate to what you’re going through. It’s hard to lean on them for support, so you need someone else to turn to. Some founders have mentors and advisors, and others go to people like Jerry Colonna.
Jerry is an executive coach, but he’s also worked as a venture capitalist. You might have heard him on our show before. In one episode, he coached our very own Alex Blumberg. A lot of listeners really responded to that episode, so we decided to ask other founders if they wanted to talk to Jerry. That’s when we got this call.

JASEN YANG: Hi, my name is Jasen Yang, and I’m the founder and CEO of Polly Portfolio. We’re a three-year-old company that works in the investing software space.

LISA: Jasen’s company is called Polly Portfolio. They make software that helps people decide how to invest, and, to get the company off the ground, Jasen took some big financial risks. He left a high paying Wall Street job. He stopped taking a salary, and he invested some of his own savings into the business.
And he did this while his wife Lynn was taking care of their two young kids full time. It’s now been three years since Jasen started his company. He’s still not taking a salary. And living in New York City hasn’t helped either. He and his wife have ended up spending a lot more than they expected. Jasen told us that they’ve had to make sacrifices—some that will affect their family in a big way.

JASEN: We’ve made the decision to sell our apartment, and I think, that is while I can rationalize that, I don’t particularly want to do it and neither does my wife and I think that’s creating some resentment for both her and me. I kind of want to show to my wife and my family that the sacrifices we made were worth it.

LISA: That’s why we put him in touch with Jerry.

JERRY COLONNA: Well why don’t we get started and…how are you and more important what would be helpful to talk through?

LISA: Jasen says it’s stressful to ask his wife to give up their home so that he can stay focused on his startup, especially because when he first reached out to us, his wife was pregnant with their third child. At times, the anxiety is so powerful, it’s prevented him from talking to Lynn about big decisions they have to make. Like where will they live? And what schools will the kids go to? He finds himself clamming up, and becoming defensive.

JASEN: you know I think I feel guilty about having brought my family along on this trip. And I feel kind of resentment about the situation that I hate to be in where I ask someone to trust me on because I’m me rather than on the merits of…

JERRY: Just to have faith in you

JASEN: Yeah.

JASEN: My natural mechanism is to go to my wife and try to get her to see the situation on its own merits. See what I saw in it. See what my investors saw in it.

JERRY: That’s your instinct.

JASEN: That’s my instinct. I have an instinct to go and pitch her the way I pitched the investors and the team.

JERRY: Ok. But there’s a part of you that says that may not be the right way.


JERRY: OK. I agree with you and the hint is in two words. The first word you use is in the phrase “get her to.” You hear that?

JASEN: Yeah.

JERRY: The second word was pitch.

JASEN: Right.

JERRY: You literally said pitch your wife.

JASEN: Yeah.


JERRY: What’s missing in your imagined dialogue with your wife. Hint, it’s not a pitch.

JASEN: One thing that’s missing is how she feels.

JERRY: That’s one. What’s another one.


JERRY: Whose other feelings are missing?

JASEN: Oh my feelings.

JERRY: Oh my feelings.

JASEN: Right.

JERRY: Part of the construct that you feel really conflicted about is that you’ve made a decision that affects your wife. Now, I’m sure there were times where there are conversations she may have even said, you know honey don’t worry about it. I’ve got it. But as time has passed and you’ve not sold this company for a billion dollars to Google and retired off to the sunset. What’s missing perhaps is honest conversation and dialogue. Where you hear her feelings by sharing your feelings and run the risk of hearing her say something that might hurt you.

JERRY: There’s no getting her to believe something. There is collaborating, co-creating your future together.

JASEN: Right. There’s a thing about me where I hate saying to someone, “trust me.” Like that’s not a thing I like to say.

JERRY: You’d rather they just know that you’re trustworthy by way of your actions and your conduct.

JASEN: Exactly. Exactly. But in this case you know with Lynn,I really did ask her to trust me.

LISA: At this point in the conversation, Jasen felt like he hit on a core problem in his life. This anxiety around asking people to trust him, it’s something he’s felt a lot. Jerry wanted to drill down on that, and understand what’s behind it.

JASEN: When I think about asking someone to have faith in me, there’s this block, you know it literally feels like there’s a quarter of a brick just stuck inside my chest.

JERRY: A quarter of a brick.

JASEN: Of one of the little construction bricks.

JERRY: It’s like it’s like it’s like lodged.

JASEN: Yeah and it’s about two inches wide and three inches long and it makes me not want to breathe. It makes me want to lie down. You know, I feel my body telling me not to say that.

JERRY: Yeah.

JASEN: Not to say those words. Trust me. I mean it’s a pretty mortal fear….you know I suddenly thought of something.

JERRY: Good.

JASEN: So I was digging around my house a few months ago and I found this USB drive from my old computer. And I found this journal entry…I didn’t, I was not in the habit of writing as a kid. I wrote this seven page long tirade about something that had happened when I was in high school and what had happened is that I had lied to my mother. I had told her that I did this paper and I hadn’t and then I eventually had to fess up and then we had this massive fight. Enough that you know as a 15-year-old or 14-year-old I wrote seven pages of single spaced you know to evaluate my feelings and I felt like it was really you know even in that journal entry I admitted shame about it.

JERRY: Yeah.

JASEN: I was very ashamed for lying to her.

JERRY: What did she say to you?

JASEN: It was couched in the language of you know the only thing you need to do is to be honest. And what kind of person lies to their mother.


JASEN: Right.

JERRY: What kind of child lies to their mother? How can I believe you if you lie to me.

JERRY: Am I hitting close.

JASEN: Yeah. It’s a pretty intense feeling.

JERRY: Yeah.

JASEN: And I kind of understand that well maybe that’s why I don’t like to ask people to trust me.

JASEN: You know…

JERRY: Is this is the first time your mother made clear to you that.

JASEN: Far from it.

LISA: Jasen says that growing up, there was a lot of pressure in his home. His parents had immigrated from Taiwan, and they had high expectations of him and his brother. They also demanded a lot of respect from their kids. And what that meant was: you don’t disobey us, you should work really hard, and definitely, you shouldn’t ever lie to us.
And that last idea, Jasen absorbed so much so that today, as an adult, he tries to never say things that could later turn out to be untrue. And that’s actually a pretty hard rule to live by, especially as an entrepreneur, because the future of a startup is so hard to predict.

Jasen and Jerry started talking about that fear of lying, and why it took hold in such a profound way when Jasen was younger.

JERRY: Yeah. So as children, okay, we’re organized around seeking three principal things: to love and be loved.

JASEN: Right.

JERRY: To feel safe and to feel a sense of belonging. Shame threatens all three. That’s why the half a brick in your chest feels mortal. Feels deadly. Because banishment from the family is the equivalent of death to a child. Right.

JASEN: Right.

JERRY: And one of the preconditions in order to belong according to Mom was to never be lied to. Or to experience an untruth.

JASEN: Right.

JERRY: You’ve done this very sophisticated maneuver, which is: if I don’t promise you anything, then I can’t experience the pain of having disappointed you. It’s actually a brilliant survival move.

JASEN: Right. I mean to me it feels like honesty, but I think you’re also right. It’s a survival mechanism. You know, so that is for me almost 25 years ago. And yet these feelings about not asking someone to believe in me. But you make the judgment, right. Statements of fact. That’s still the mode that feels comfortable.

JERRY: Because you’re not asking them to—

JASEN: Believe me.

JERRY: Believe you.

LISA: After the break, we’ll pick up Jasen and Jerry’s conversation, when we’ll find out that Jasen’s need to be 100% truthful also threatens his business.


LISA: Welcome back to Startup.
Before the break, Jasen and Jerry were working through Jasen’s problem: his difficulty asking people to trust him. It was causing tension in his relationship with his wife, and as it turns out, it was also creating a problem for his company—especially when he had to go out and pitch investors. He told Jerry about one time in particular.

JASEN: You know about a year and a half ago I went out to raise more money for the company. So we had done a seed round, we had build a product. We were still waiting to see how it was going to work out. And I was getting ready to go hop on a plane to California and go beg for some money. And I felt awful, like to the point I thought I was sick. And then like I was nauseous, I didn’t eat all weekend before I got on the plane.

JERRY: Pit in the bottom of your stomach?

JASEN: Yes. And then for me the way that cleared up is I realized that I was putting pressure on myself to sell a business when all I had was a product and I said well just tell them what we’ve done right. I’m not going to make any promises about what the business is. I’ll just show them the product that we have and then I was able to go out and you know have three days of meetings and not feel sick and have really enjoyable meetings. However, you know I didn’t achieve my original goal. I was out there to try to raise myself a Series A, and the way I pitched it, they were like okay, well, it didn’t quite seem like you’re ready for your Series A yet. And you know look I don’t know that it would have done anything differently or I should have done anything differently. But I also know that my decision not to try to make promises about the business certainly didn’t help my cause.

JERRY: Right. And how’s fundraising going for you.

JASEN: Um. Well…mixed.

JERRY: Okay. So I have an idea. Having been an investor, I’m going to say something to you now that’s going to be really uncomfortable. Early stage investors invest in people. They bet the rider as much if not more than the horse. When you invest at the seed and Series A level. You’re not investing in a product

JASEN: Right.

JERRY: You’re not even investing in a business. They don’t even invest in the idea. The idea is a hook. It’s the thing that draws people in. It’s the opportunity. That’s why investors will stay with a company even as it pivots to new ideas, because they believe in that person. Does this land for you?

JASEN: Sure. I’ve spent my whole career in investing in various sorts and I know I.

JERRY: You know the truth of what I’m saying.

JASEN: Right, well I’ve gotten pitches, right. And when someone walks in and says, “Trust me,” I can feel myself as a human sort of responding to that. And so I know—

JERRY: And you either do or you don’t.

JASEN: You do or you don’t.

JERRY: Right. And your childhood survival strategy leads you to sort of be in this place of you know, you better stay away from that trip wire of being over promising.

JASEN: Right. I think that’s absolutely right. And I’m certain that means that when I go to fundraise, my ask doesn’t seem as strong as some other folks’.

JERRY: What is the honest stance to take with a potential investor. How much money do you need?

JASEN: We’re determining our strategy.

JERRY: Okay. Good. Good answer. I like that equivocation. Okay. But let’s imagine for a minute it’s a couple of million dollars.

JASEN: Yeah.

JERRY: Here’s the product, here’s a service, here’s what we’ve built so far. We need $3 million. Take your seat. CEO.

JASEN: But they should see that I have…you know, I think, and now I’m on that line between evidence and belief.

JERRY: Jasen, do you know what you’re doing?

JASEN: Yes. Not only I know what I’m doing. I know the domain. I’m a great leader. I think. I know how to run a business. I know how to build a relationship. I know how to sell.

JERRY: Is there a market opportunity here?

JASEN: There’s a great market opportunity.

JERRY: Is there a tremendous need?

JASEN: There is a tremendous need. We were ahead of our time.

JERRY: What is the only thing you don’t know?

JASEN: How long it will take.

JERRY: Exactly. So what. So notice what we just shifted. When I when I said, “Do you know this market,” your whole body language shifted. That’s not over promising. That’s stating what is true.

JASEN: Right.

JERRY: So ask me again for three million dollars.

JASEN: Well…we’re building an incredible. I’m starting to laugh. But…we’re building this business. We’re building, We’re changing the way that information in the investing world is supposed to be connected to the end investor. And look, the market’s coming to us now right. We’ve been at this for three years. The product’s basically done. We just need to build the sales organization now that we’re actually getting in-bounds for exactly the thing that we do.

JERRY: Ask me to invest.

JASEN: I guess what I would say—to achieve the milestones—oof now now I’m getting nervous right. The actual ask. Right. Like of course, you can see that well, with these $3 million, look what we can accomplish. We need cap—but we do need capital and runway to…

JERRY: If you had to capital could you do this.

JASEN: Yeah.

JERRY: No promises, but do you believe in you. That’s what you want to be telling them. Tell me.

JASEN: I know that I, that we’re the right team to build this.

JERRY: There you go. Right market, right solution, right time. Finally.

JASEN: Finally.

JERRY: Right team.

JASEN: Yeah.

JERRY: Would you like to join in this investment.? You want to come along for the ride?

JASEN: Yeah.

JERRY: It’s going to be a hell of a ride ain’t it.

JASEN: It’s going to be transformational.

JERRY: There we go.

LISA: So Jasen was starting to feel more confident about his pitch. But remember, that wasn’t the main thing he’d come to Jerry to talk about.

JERRY: And now we’re going to go to your wife who we left off to the side.

JERRY: What would you say to Lynn. Today. Honestly. What does your heart want to say.

JASEN: My heart wants—It just wants acceptance and sympathy. I think that’s what I’m looking for.

JERRY: And maybe a little understanding.

JASEN: Right.

JERRY: So why don’t you ask Lynn for that right now. Lynn.

JASEN: Lynn, I I want you to understand how there’s nothing more important to me than our marriage and our family. And whatever adventures I undertake in my professional life, you need to know that I feel every sacrifice that I ask you to make.

JERRY: And so therefore how do you feel about her.

JASEN: That there’s—well that I love her and that there’s nothing more important to me than our relationship.

JERRY: This is a good time to slip in a little thank you.

JASEN: That’s true too. That’s true too.

JERRY: How does it feel getting to that spot. How’s that half a brick?

JASEN: It feels like it’s melting. It’s much more jolly rancher sized now. It’s not quite gone, because I haven’t actually talked to her.

JERRY: Right. So a couple of other things to consider. Might help for her to know that you carry this guilt and resentment. It might help her to understand that it’s hard for you and you know it’s hard for her. Give her some agency. Ask her what she might need.

JASEN: Right.

JERRY: There’s an opportunity here to use this as a dialogue as an opening.

JASEN: Right.

LISA: After Jasen and Jerry met, I invited Jasen into the studio to talk about this session with Jerry. He said he was a bit shaken afterward, but that it also gave him some clarity. It helped him understand why he’d been feeling so anxious. And so I wanted to know if this new awareness was affecting the way he was communicating with Lynn.

LISA: Can you tell me about what you went home to like the conversation with your wife… like after that session. What was it like.

JASEN: So I wasn’t ready to talk about it right away. So it probably wasn’t for four or five days before we had a chance to have a conversation. And it wasn’t a fairy tale ending. The way I started it is I said…I said, you know, we actually never got to talk about the coaching session. You know, it was really like, I was really moved. And I kind of said like it really affected me. I tried to lay out that I had felt all this guilt around having asked her to trust me and that I think I probably have this complex about asking people to trust me. Her initial reaction was like, OK. So what are we going to do. She was not very sympathetic about it. But I mean, obviously, you know she’s going through her own set of stressors. And so her reaction was like, “Okay, I guess I kind of know what you’re saying. But like how does this help us sort of make decisions going forward.”

LISA: So, Jasen didn’t quite get the response he was hoping for, but it did open up a conversation about how he and Lynn were feeling. Before the session, he and Lynn had avoided talking about how the company was affecting their lives. Or when they did talk, the conversations were awkward and painful, and he’d struggle to get the language right. But after the session, Jasen said he noticed a shift in how they were working through problems together, for example selling their apartment.

JASEN: Well, we talked about you know us putting our place on the market right. And it’s not something that we’re doing without regret, even if this is the right thing to do. At times she might say to me, “I really hate that we’re doing this.” And you know my reaction would alternate between, “Yes dear and you’re absolutely right,” to, “Buck up. This is life. Get over it.” Neither of which are what you need from a partner, right? So after I kind of got away from that feeling of guilt and resentment around this, I can kind of say, the way I feel is not all negative. It’s actually, okay well what about the exciting opportunities that are ahead of us right. You know maybe we’ll get excited about living in a different place. Maybe we’ll just get excited about like selling the place and having some cash in our bank account. And I think my ability to be positive and genuinely positive rather than guilt-ridden and resentful was just kind of the first step in sort of making it better.

LISA: And how has she responded to it. Like when you when you have kind of instead of just, buck up or yes dear.

JASEN: Well, I think it’s still a process. But I think, but I think she’s responded better. The tone of the conversations and sort of the back and forth has got a lot more substantive and that’s kind of gotten us back to the place where you kind of want to be, which is that you’re partners in this journey.

LISA: So Jasen feels he and Lynn are making gradual progress. As far as pitching his business goes, he’s seen a big change in the way he approaches it.

LISA: You had described that fear of asking someone to trust you. You described it as a brick lodged in your chest.

JASEN: Yeah.

LISA: And I’m wondering, does it still feel like that?

JASEN: No. I’ve mean somehow that brick has kind of been dissolved, maybe it was that perspective of being like why wouldn’t I ask someone to trust me. Right. You know especially ‘cause I’m asking them to trust me to do something that I know all about. And I’m kind of pretty uniquely qualified for it. Well geez that was silly for me to feel nervous about. And I think when it comes to talking about myself in the context of the company, you know, some of the things that made me tight in the chest have completely gone away.

LISA: Jasen Yang is the CEO of Polly Portfolio.
Jerry Colonna is an executive coach and also host of The Reboot Podcast.
Since his session with Jerry, Jasen is still pitching his company—but this time he’s doing something that might make his family’s life a bit more stable—he’s looking to get acquired.

StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Pat Walters and Annie-Rose Strasser. Production assistance and fact checking by Max Gibson.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.
Additional music by the lightning fast Bobby Lord. For full music credits, visit our website. David Herman mixed the episode.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you in two weeks.

Sex Dot Con (Season 6, Episode 2)

How the battle over a domain name nearly destroyed one man’s life.

September 8, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is StartUp.
Last week on the show, we heard about a form of virtual real estate—domain names—and specifically domain names that end in dot com. How they still sell for millions of dollars, even when there are plenty of other kinds of domains out there now, like dot biz, dot io, dot limo.
This week’s show is about how domains became property in the first place. It all goes back to a lawsuit—one of the most important lawsuits in the history of the internet. This dispute stretched on for years and nearly ruined one man’s life.
Reporter Amy Standen has the story.

AMY STANDEN: The domain at the center of this lawsuit was

GARY KREMEN: Welcome. Hi. How’s it going?

AMY: And the man behind that domain is this guy.

GARY: Come on in. Do you need any water or anything?

AMY: Who I went down to see in Palo Alto, because I wanted him to tell me this story.

GARY: Kind of a crazy story isn’t it.

AMY: Introduce yourself.

GARY: Yes, so my name is Gary Kremen. I’m an entrepreneur. I’ve started a couple of companies and I’m here to talk about domains and I’m honored.

AMY: That “I’m honored” is so Gary. He’s this teddy bearish guy. He’s always smiling and very eager to please. But there’s another quality about him that will turn out to be important later on, which is that Gary is an obsessive.

GARY: This room was chaotic, and I’m about two hours into it.

AMY: He has two young sons, and these kids had so many toys. Gary and I were standing in their room, and we were practically knee deep in toys.

GARY: Do you think there’s too many toys?

AMY: Gary was in the middle of this project to organize all these toys. So he had his label maker out and he had his bins. And I think most parents would throw all this stuff in cardboard boxes and put it on the curb, or have a yard sale, or something. But not Gary Kremen. Gary was going to systematically sort through every piece.

GARY: I need to put all the glue sticks together. Glue sticks will be an early win.

AMY: And it’s not just toys. This is how Gary is. When he gets into something, he’s all in. He has a hard time letting go. He’s extremely thorough—sometimes to a fault. And that quality is part of what got him into this whole mess in the first place.
So, flashback to 1994. Gary had a Stanford MBA and an undergrad degree in engineering. He wanted to become an internet entrepreneur and one of his early ideas was that the internet seemed like a really good place to do classified ads. He wasn’t quite sure how that was going to work, but he went ahead and snapped up domains for all of these categories. Basically, he went through the classified ads section of the newspaper and registered domains for all the words he was seeing.

GARY: So I got and and

AMY: And among this bunch of domains was And he didn’t really even think about it. It was sort of this land grab moment. Figure out what to do with it later, for now let’s just register as many domains as possible. So he has to sort of pick: which of these domains am I going to work with first? Which of these seems like it has the most potential. And the one that really jumps out for Gary is

GARY: I was single. I was doing a lot of 900 numbers in the back of the Bay Guardian and The Weekly.

AMY: He’s talking about those dating services, where you’d read someone’s personal ad in the paper and then you’d pay to leave them a voicemail.

GARY: And I would do those! And I would have big bills.

AMY: Gary thinks, “I can improve this system! Make a website where people talk to each other directly.” So he forms a company to build this site called—the same that would go on to become the first big dating site in the world. He starts getting investors, and he ends up transferring all his other domain names to the company. All of them except

GARY: Because the investors were too embarrassed. They’d go “Gary. We don’t want any…don’t talk about that. Leave it in your own name. We wanted nothing to do with it.” So all during that time I had this name,—or I thought—in my name.

AMY: But you just weren’t paying attention.

GARY: I wasn’t paying attention. It was crazy out there, I was working hard, you know. So much is going on.

AMY: After just about a year, Gary had a falling out with his investors, and he left And when he left, the company got to keep all the domain names that Gary had signed over to the them. All of them except for that one they had been too embarrassed to claim.
So at this point, that’s all Gary owned. No more No other domains, just
Then, one day, he got a call from someone he knew in the industry.

GARY: And he goes, “I thought you owned that” And I go, “Yeah.” And he goes, “No, you don’t.” And I look and it wasn’t in my name.

AMY: When he went to, he found a full-fledged 1990s porn site.

GARY: It was this disgusting website. It was a click farm. A bunch of banners.

AMY: Turns out, this website was being run by a man named Stephen Cohen.

GARY: It says Stephen Cohen here, and I’m like what are you talking about?

AMY: Gary had never heard of this guy. Eventually, he’d do a ton of research, find out all kinds of shady stuff. He’d learn Stephen Cohen had done jail time for impersonating a bankruptcy lawyer, had run a swingers club in southern California, and allegedly once impersonated a judge in Arizona. For two weeks.
But for now, all Gary knew was that Steve Cohen lived in San Diego and was a big deal in the online porn industry. And that he’d built this empire on Gary’s domain name. Which he had stolen. And the way he stole this domain is with a letter. A forged letter.

GARY: There’s a letter with letterhead: “Online Classifieds, Inc. 242 Cole Street, San Francisco, California 94117.”

AMY: What is that address?

GARY: Well, I used to live there.

AMY: Steve Cohen claimed that he had received this letter from Gary’s company, saying, essentially “We don’t want this domain, anymore.”

GARY: Our board of directors has decided to, underline, abandon

AMY: And you, Steve Cohen, can have it.
But the closer you look at it, the fishier this letter gets. For starters: the typos. This woman who allegedly sent the letter is named Sharyn Dimmick. But in the letter her name is misspelled. That’s one problem. Another red flag is this one very strange line.

GARY: “Because we do not have a direct connection to the Internet, we request that you notify internet registration on our behalf to delete our domain name”

AMY: In other words, the letter is saying that Gary’s company—which is called Online Classifieds—doesn’t have Internet access. And it asks that Steve Cohen handle the transfer himself. This a crazy letter. But it worked. Network Solutions—which is the company that had the government contract to distribute domains—they got the letter, and they transferred ownership of to Stephen Cohen.
By the time Gary found all this out, a couple of years had gone by and Steve had made millions of dollars in ad revenue off of Money that rightfully belonged to Gary.
So Gary sues Steve.
And then Steve? He sues Gary right back, for defamation.
And the legal back and forth just snowballs from there.
There’s a book about this case, written by a British tech journalist named Kieren McCarthy. And he told me that at a certain point, this whole affair became almost impossible to follow.

KIEREN MCCARTHY: Every time there was another part of the story, it was another lawsuit. I would guess twenty? Twenty lawsuits? And more outside. It was enormous. Basically Stephen Cohen was just flooding in with lawyers and lawsuits and it was all just to try and break him.

GARY: It was this continuing huge amount of legal bills, you know this overhang of millions of dollars of bills on my side.
AMY: Money you owed.

GARY: Yeah, to lawyers and other court reporters and everyone involved. Borrowing from friends, and someone who clearly had it who is clearly the bad guy who was just tormenting and teasing me.

AMY: Gary knew he was right. And Steve was wrong.
But every time he felt like he had proved this, definitively, Steve would come up with some whole new defense, or legal argument to tie up the proceedings.
For instance, Steve said he had owned the phrase “” since 1979. That was before anyone was even talking about “dot coms.” Of course, this wasn’t true. But it became just another rabbit hole for Gary and his lawyers to go down.

KIEREN: Yeah it’s an amazing thing. People call it persistence. But it’s basically just lying. And bald faced lying. And he’s absolutely relentless. At some point you just give up. It’s human nature, unfortunately. At some point you think, “What’s the point in me keeping on doing this?”

AMY: It’s human nature, but it’s not Gary’s nature. He couldn’t give up. He was obsessed with the case. His friends got tired of hearing about it, they stopped returning his calls.
But there was one person who did call. One person who was equally obsessed with the case. And that person was Stephen Cohen.

GARY: You know first he’d sometimes call me every day. A couple times a day. He’s an obsessive caller. “Hey, I want to tell you about this new thing I’m working on.” I go, “I’m busy.” He goes, “Yeah, but I think you’d find this interesting,” and go on and on and on and on.

AMY: Gary thinks Cohen just wanted to push his buttons.

GARY: He was always saying how I was going to jail and my attorneys were going to jail. All the time.

AMY: Did he ever say, “Yeah, I stole this thing from you, but you’re never going to get it back.”

GARY: Absolutely not, because I stole it from him. His belief was it was his idea, his IP, and I should be writing him the checks.

AMY: It was a relationship, of sorts.

GARY: I don’t know what the word would be. I don’t even want to say frenemies. I was like a victim listening for an atonement on the other side, for him to atone. Never did it.

AMY: So you have these two guys. Enmeshed in the endless dispute, and sharing this strange bond. Only Steve Cohen was a multimillionaire, living an opulent porn king lifestyle. And Gary was broke. And not just broke. Over the years fighting these lawsuits he had developed a really bad drug problem.

GARY: You know I did a lot of cocaine and methamphetamines. MDMA and everything. A lot of prescriptions: Xanax, Ativan, Klonopin, Oxycontin—the whole range of bad behaviors.

AMY: Gary was just spiraling. He was falling apart.

GARY: Depressed and out of my mind…just…I felt in a Kafkaesque world that you know I was almost having to live on the street, sell everything I had, the building, all the money I had in the bank to give it to lawyers, and the case wasn’t going great. Not the greatest time in my life and very depressed.

AMY: You look, honestly, a little depressed even talking about it.

GARY: I know, it was kind of a nadir of time.

AMY: At one point, Gary tried to settle the whole thing. He told Steve, if you’ll just admit that you stole the domain from me, and give me something, I’ll stop fighting.

GARY: I said to him, “$100K I’ll go away.”  But he goes, “Nope. I invented it. I’m never giving you a penny.”

AMY: So, Gary had racked up millions of dollars in debt. He’d burned through multiple attorneys. When, finally, in 2001, he caught a break. A big break. He won the suit  against Steve Cohen. A federal judge ruled that Steve had stolen from Gary. And because of that Steve owed Gary damages. A lot of damages.

GARY: We had a four-day trial. We showed all the evidence of how much money he was making. Court said he made $40 million on it, and punitive damages of $25 million. And all he owns is mine.

AMY: So that’s $65 million that Steve Cohen now owed Gary Kremen.

GARY: It felt very good, but I knew collections was going to be tough. Because he was transferring all the money offshore to bank accounts which were beyond the reach of the U.S.

AMY: He created like a dozen companies.

GARY: Yes, dozens of companies offshore, transferring stuff to his wife’s name, stuff like that. Made it really tough.

AMY: And meanwhile, Steve Cohen was nowhere to be found. He fled to Mexico right before the judgement came down. And he stayed there.
In 2002, Gary went back to court, to argue that it wasn’t just Cohen who was at fault. But that Network Solutions—the company that accepted the forged letter and transferred the domain to Steve—that they should also be held liable.
In 2003, Gary won that case, too. And this was a huge deal. Because it was the first time in the history of the internet that a judge said, “domain names are property. They can be bought, sold, and stolen.
This set a precedent for all sorts of virtual property—not just the domain market, but other digital property, like Bitcoin.
The whole idea that virtual objects can be owned traces back to this one lawsuit.
But for Gary, all of this was sort of academic. He was owed a ton of money. And he wanted it.

AMY: Is there still a reward out for this?

GARY: I’ll give a reward right now! I’ll give someone 20% of what I recover. $70 million. Come and get it!

AMY: The search for Steve Cohen’s millions, coming up after the break.


AMY: So when we left off, Gary Kremen had finally been handed a victory in a lawsuit over the domain, which had been stolen from him by a man named Stephen Cohen. Steve owes Gary $65 million. But Steve has fled to Mexico. And he’s vowed not to pay Gary a penny.
There is one asset Gary’s been able to collect. And that is Steve’s house. This is where Steve had been living all through the lawsuit. And that fact used to drive gary crazy.

GARY: He was living in a mansion, 9,000 square foot house in Rancho Santa Fe, with an infinity pool, tennis court, and a huge guest house.

AMY: So all of this, thanks to the court decision, now belongs to Gary. At this point, Gary’s just wrung out by the lawsuit. Even though he won it, he’s still broke. He’s still doing a lot of drugs. He needs a restart. So he packs his bags and drives down to Rancho Santa Fe. To move into Cohen’s old house.

GARY: So I go down there and everything is stripped. He ripped the wires out from the walls. He took all the cabinets, he took all the toilets, he took all the drawers. It was like a disaster, a shell of a house. Even though the court ordered him not to do anything. He did it anyhow.

AMY: So even though this place is a dump, Gary moves in. And it turns out to be a really bad idea. Because Steve’s old place is a huge mansion. And it costs a fortune to maintain.

GARY: Oh yeah, palm trees and maintenance and staff. I hated it. It was anxiety producing. I would seethe in the pool. Even looking at the pool made me seethe.

AMY: So you’d think Gary would just sell the house. But he doesn’t, because it strikes him as an opportunity. He’s spent years chasing this stolen domain,, watching this other guy make a ton of money off of it. He figures, now it’s his turn. So Gary moves into the house and tries to reinvent himself as a porn entrepreneur.
There’s this profile of him from this period, and there’s this photo of Gary, and he’s sitting in a chair, and he’s wearing a tuxedo. And then facing him is this woman in a sort of Vegas strip outfit—you know a thong and all the rest—and you only see the back of her. So she’s facing Gary as if she’s putting on a show for him.
And you can see in this one picture kind of everything that’s going on. He’s trying to play this part—he’s living, like, the dream. But this guy sitting in this chair oh…it just doesn’t look right.

GARY: Having spent a couple of years in adult business, it’s one of those businesses that could look better on the outside than the inside. It was a product of a different time and a different mental outlook.

AMY: Eventually, Gary gets an offer to sell, which he does, and moves out of Cohen’s house. And if this were anyone else, that might be the end of it. An opportunity to close this whole sordid chapter of his life. Move on. But that’s not who Gary Kremen is. He can’t let it go. Steve still owes him $65 million. And he intends to get it.
And it’s at this point that a guy named Tim Dillon enters the picture.

TIM DILLON: I am the managing partner at a law firm here in Carlsbad, California.

AMY: Tim has a boy scout-ish look, kind of like Coach Taylor from “Friday Night Lights.” He lives a couple miles away from Steve Cohen’s old house, the one where Gary’s living at this point. And in 2004, Gary invites him over.

TIM: He’s this single guy living in an 8900 square foot house. The master closet was full of file cabinets, of all of his files for this case. That was who Gary was at the time.

AMY: What were you brought on to do, like why did Gary call you?

TIM: One of the things that drove Gary crazy was the fact that Steve Cohen had fled to Mexico, was holed up in Tijuana, and was still operating a number of websites and businesses you know within a mile of the border.

AMY: Gary hires Tim and a private detective to go to Mexico, and try to track down whatever money Steve has left. Because whatever he’s got, belongs to Gary.

TIM: We had three primary attorneys working together with Gary’s private investigator, with an attorney from Mexico that was helping us locate information. And there were a number of times we had to go down and meet with groups of people in Mexico. This process probably took five months and probably cost Gary over $200,000 of legal time.

AMY: Gary also asks Tim and the rest of the team to look for assets in other parts of the world—money they believe Steve has stashed in a web of companies and offshore bank accounts.

GARY: Estonia, Norway, Bahamas, Vanuatu, the BVIs, the Caymans, everywhere he’s got stuff.

AMY: And you can’t, just because he’s owed it to you, you can’t go get it?

GARY: Yeah. Those governments, the courts there don’t turn around. You’ve got to re-sue him there. And they’ll say oh it’s beyond statue.

AMY: In 2005, Steve is arrested in Mexico and handed over to U.S. Border Patrol. He’s brought to jail in San Diego. And he’s told: “Pony up, you owe this guy $65 million. We know you have money somewhere. Produce it. And until you produce it, you’re not leaving jail.” And Steve Cohen says, essentially, “Fine.” And he stays in jail for over a year just refusing to reveal where his money is.

LAWYER ON DEPOSITION TAPE: I just have a couple more questions for you today…

AMY: While he’s in custody, Steve is deposed by Gary’s lawyers. This is one of the few recordings we have of him. Gary keeps it on his laptop. We watched it together.

DEPOSITION LAWYER: Seems clear to me, there were revenues…

GARY: So watching it again does bring up some of the memories to me.

AMY: When Cohen comes on the screen, Gary is transfixed. He can’t stop watching.

GARY: Let’s just look at this guy for one more minute. You’ll see what I’m talking about. He’s just uh…

AMY: There’s Stephen Cohen, in an orange jumpsuit. He’s pudgy, with gray hair. He’s slouched back in his chair. And his whole vibe is just can’t-be-bothered.

DEPOSITION LAWYER: We have bank records from your bank that show tens of millions of dollars flowing through over a number of years. So my question is…

STEPHEN COHEN: Wait a minute, wait a minute, wait a minute. Tens of millions of dollars? There has never been tens of millions of dollars. That is a false statement.

AMY: In response to Gary’s lawyers, Steve just squid inks the situation. He throws out a whole bunch of confusing leads that then of course send Gary’s lawyers in circles again.

GARY: Some guy in the Bahamas and how things were owned in Tajikistan and all these crazy things that we had to…Algerian trademarks that we had to go run down, just a con man.

AMY: Steve stays in prison for a year and a half, while Gary and Tim try to piece together a paper trail of all Steve’s accounts, to get him to say where his money is. And they can’t. Eventually, Steve is released and heads back to Mexico.
He’s still there.

AMY: How much does Steve Cohen owe Gary Kremen today?

TIM: With interest? In excess of $70 million.

AMY: Wow. $70 million dollar?

TIM: Yeah.

GARY: Hey, if anyone finds any of his money I’ll give you a reward, right?

AMY: Is there still a reward out for this?

GARY: I’ll give a reward right now! I’ll give someone 20% of what I recover. Seventy million dollars. That wouldn’t suck if I recover it and get it. Come and get it.

AMY: Tim Dillon and Gary say they have spies in Tijuana who help them keep tabs on Steve Cohen. They say anytime Steve starts a new business, they start digging into it, to see if they can seize the profits, or get the Mexican police to shut it down. They say that’s what happened with Steve’s shrimp farm. His illegal bank. His strip club. These days, they’re focused on what they think is one of Steve’s last remaining businesses.

AUTOMATED PHONE RECORDING: You have reached Medicina Mexico.

AMY: It’s an online pharmacy, There are links to buy everything from generic Viagra to allergy pills.

AUTOMATED RECORDING: We own and operate 93 licensed and regulated pharmacies throughout Mexico…

AMY: That’s Steve’s voice.

AUTOMATED RECORDING: We also own many domain names that are online…

AMY: No one returned my messages. But eventually I was able to track down another number for Steve.

VOICEMAIL: You’ve reached Stephen Cohen. Please leave your name, telephone number, and what your message is all about.

AMY: Hey, Steve. My name is Amy Standen. And I’ve been reading…

AMY: I tried again the next day. And Steve picked up. When I told him I was a reporter, he said, “I’m not interested in talking.”  And hung up on me. I called him back a few minutes later. And we talked for over an hour.
He never gave me permission to record, but it was one of the strangest  conversations I’ve ever had.
I’d ask him about the case or about his money. He’d try to shock me with a question about sex or my personal life. I’d ignore him completely, but the more I asked, the more crude and explicit his questions got. It was like a game for him.
But he did say a few things about his long fight with Gary Kremen.
Steve said he never stole, never forged any letters.
That judgement? The one that awarded Gary $65 million? It’s worth as much as used toilet paper, he said.
The house? It wasn’t his anyway, it was his ex-wife’s, so no big deal to lose it.
That year he spent in jail while Gary tried to find out where his money was? Steve called it relaxing. He met a lot of nice people. “I was determined not to pay Gary a penny,” he said, “and guess what, I didn’t.”
I asked if he, Steve, ever felt bad for what Gary had to go through. “As much as a bumble bee,” he said.
That night, Steve said he planned to drink pina coladas and go dancing near the beach with one of his girlfriends.
This whole Gary vs. Steve affair, you kind of have to ask: who won?
On the one hand: Gary did, clearly. When he sold, in 2006, he got $14 million for it. The Guinness Book of World Records said it was the biggest domain sale ever. Steve’s house? Gary sold it for $4 million.
And eventually Gary was also able to win a settlement from Network Solutions—the company that had handed over to Steve back in 1995. The amount wasn’t disclosed, but it’s rumored to be close to $12 million. So Gary comes out pretty well.
But Steve, Steve lives in the world of alternative facts. No matter what, he never stops asserting his own reality, which is that Gary may have won the lawsuit, but he never got a penny from him. And in that way, he still gets under Gary’s skin. In this sense, Steve won. Because he refuses to admit otherwise.
Gary’s lawyer Tim Dillon says he thinks Steve still has money—7 figures, he guesses—stashed away in foreign bank accounts. But he says Steve seems to live pretty simply.

TIM: He’s the kind of guy that will, I’m not kidding when I say this, eat hot dogs at the Costco in Mexico just because it only costs a dollar.

AMY: How do you know that?

TIM: We have photographs of him there. People would see him there with regularity. Hot dog and a drink for you know a dollar forty nine.

AMY: Drinking pina coladas by the beach with his girlfriend? Dillon very much doubts that.

DILLON: I can’t tell you exactly today what it looks like, since I haven’t checked in on him in several months, but his Mexican wife doesn’t want to have anything to do with him, his Mexican children don’t want to have anything to do with him. He’s got them in trouble. I know he has physical ailments, his heart condition. I think he’s a lonely guy that has little to show for for what he’s done with his life.

AMY: Maybe. Certainly that’s the reality Gary Kremen and Tim Dillon would like to believe in. It would be the kind of emotional justice Gary always wanted. To make Steve experience some of the pain Gary did. You can hear Gary trying to convince himself that that’s what happened.

GARY: Oh well. I’m laughing at him. I seem to be the one who can drive around the U.S. and can open bank accounts and you know live my life and stuff like that. I’ve moved on.

AMY: He didn’t really look like he’d moved on.

AMY: Your knee is like bouncing up and down and you’re playing with your hair.

GARY: I know, I’ve got this hair thing going on here. It’s just a black hole and a negative. And I’ve got to focus on some positives. So, “Steve! Hi! Not really going to focus on you right now! I think I’m going to go home and do some positive things.”

AMY: Gary says even now, he’d be willing to give up the chase, if Steve would just admit what he did, pay some small fraction of what he owes. But realistically, Gary knows that’s never going to happen. He knows Steve Cohen better than anyone.

LISA CHOW: Amy Standen is a reporter for StartUp.
Coming up, a founder talks about the guilt he feels bringing his wife along on his own startup rollercoaster.

JASEN YANG: And when we started this I kind of said, look, the most likely outcome is that it doesn’t become a raging success.

JERRY COLONNA: And what did she say when you said that

JASEN: She told me she believed in me.

LISA: We listen in on another session with executive coach Jerry Colonna, next week on StartUp.
StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Pat Walters and Annie-Rose Strasser. Production assistance and fact checking by Max Gibson.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. For full music credits, visit our website.
David Herman and Mark Wilkening mixed the episode.
Special thanks Mariana Martinez Esténs in Tijuana, and to Kieren McCarthy, author of the book, that includes so, so much more of the crazy backstory to this case. Check it out.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you next week.

We do our best to make sure these transcripts are accurate. If you would like to quote from an episode of StartUp, please check the transcript with the corresponding audio.


The Domain King (Season 6, Episode 1)

Why the dot com still reigns supreme.

September 1, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is StartUp. We are back with a new season—and can you believe it? It’s Season 6.
And we’re going to start with a story about an address we’re all very familiar with: the dot com. Every year they’re bought and sold for millions of dollars. sold for $2 million this year. That sold for $30 million a few years back.
Why are people paying so much for dot com addresses, when there are plenty of other options out there? Like dot biz, dot io, or even dot pizza. What does that say about us and about how we use the internet?
A quick warning: there’s some graphic language in this episode. If you have young kids, you might want to put on some headphones.
We begin with the story of one man who’s built his empire on the dot com. Reporter Amy Standen takes it from here.

AMY STANDEN: Rick Schwartz is in his mid-60s. He was born in New Jersey, he has gray, slicked back hair, and a large house in Florida.

RICK SCHWARTZ: I have 140 feet of direct intracoastal frontage. My backyard consist of a large pool with a marble patio and outdoor kitchen and a boat dock and a boat lift for a 60-thousand-pound boat with no boat on it right now. Ha ha. It’s gone. Ha ha. The first divorce.

AMY: This is his place in Boca Raton. It’s one of five houses that he owns.

RICK: Watch your step here…

AMY: He lives here with his girlfriend.

RICK: New people, new people…

AMY: And a 10-year-old schnauzer named Freddy.

RICK: He looks like a pup doesn’t he? He was supposed to go to the beauty parlor this morning, but the rain prevented it. So we have to go tomorrow.

AMY: Rick wasn’t born rich. When he was younger, he worked at Taco Bell, and then he sliced meat at a deli. He began building his fortune pretty late, actually, in his 40s. And at first, it was a fortune built on phone numbers.

RICK: What happened was, in May of 1993, you were allowed to for the first time call up AT&T and apply for your own 800 number. So I could call them up and say, “I want 800 such and such.”

AMY: These were called vanity numbers. And Rick liked these numbers. They stuck in his head. He found that when he traveled for business, he was more likely to call a hotel that had a 1-800 number—1-800-HOLIDAY, for Holiday Inn, say, than one that didn’t.

Rick figured: if a hotel had the resources to get a vanity 800 number, it was probably a pretty good hotel. That 1-800 number was a kind of brand. It made a company sound legitimate.

RICK: I would remember the number because of the vanity number. If they had just numbers they didn’t even have a chance to get my business.

AMY: At the time, he had a business selling lighting fixtures. Rick registered some vanity numbers for it. And it worked. Whenever he put a vanity number out there, people called it.
Rick didn’t realize it at the time, but he was onto something—an idea that would have implications far beyond 1-800 numbers: and that’s that a good phone number was like a good address. A piece of virtual real estate. And just owning that real estate could be profitable. Even if all you did was rent it out to someone else.
While Rick was collecting 800 numbers for his own business, he got intrigued by a whole different kind of 800 number. The adult chat line. He saw them advertised in the backs of newspapers. And they struck him as a business opportunity. So he got one: 1-800-MAKEOUT.

AMY: What happens if I call 1-800-MAKEOUT?

RICK: There’ll be a recording and a girl asking for 50 cents a minute or a dollar a minute or whatever the hell she’s going to ask you for.

AUTOMATED RECORDING: This service is exclusively for men and women looking to meet other sexy singles in your local area.

AMY: The important thing to point out here is that Rick does not run the adult chat line. He just owns the number. The number is his business. Whenever someone calls it, Rick forwards it to the chat service. If there’s a sale, he takes a cut. Going back to the idea that the phone number is a piece of real estate—Rick is the landlord.

RICK: I never met the girls, never used the service. But I get the checks, and the checks started to change my life.

AMY: How much does it cost to run 1-800-MAKEOUT?

RICK: A dollar a month. A dollar a month, maybe.

AMY: That was your expense. A dollar a month.

RICK: Yeah. Yeah. There was no expense, really. I had 150 or 200 telephone numbers. I don’t even think it was a dollar a month, if I spread them out across them all.

AMY: Those 800 numbers were covering Rick’s car payments. Pretty soon, he didn’t need to make payments at all. The day he got his first really big check — it was for $7,700—he went out and bought himself a gold Rolex.
This was the mid-90s. 1-800 vanity numbers were the Park Avenue of phone numbers. Everyone wanted them, and there weren’t enough to go around. Phone number entrepreneurs were collecting 800 numbers and flipping them at a profit.
But all of this was about to change. This whole 1-800 number craze was about to be taken over by something else. The internet.
Rick saw this. He was one of the few people who did. And this head start, this crucial bit of foresight, would change the course of his life.
Rick’s big aha moment came when he learned about the domain name, specifically the dot com.

RICK: I said, well wait a second. This is exactly an exact parallel to what I’m doing already, which is getting 800 vanity numbers. Except instead of an 800 in front of it, it’s “www” and you can do a whole lot more things with it.

AMY: On December 26th, 1995, Rick got his first domain.

RICK: The first domain I bought was

AMY: He made a really simple, all text website. The plan was to use it to advertise his 1-800 numbers. And Rick says it worked. More calls came in. He was making even more money, and doing very little.

RICK: I said “Oh my goodness. I’ve got something here.”

AMY: But there was a problem. Rick still didn’t know how to register a domain name. He had to ask his brother to do it for him.

RICK: I started to pester him. I would say you know can you go register me this domain. And then the next day can you go register me this domain. And then after about two weeks of it he got disgusted with it. He sent me the link. He said this is where you can do it. And that changed my life.
I got an email one night from a guy, and he knew that I was playing around with domains, and he says, “Rick there’s this domain that’s going to be available tonight.” I didn’t even know how he knew. And he says, “There’s a domain called You may want to get it.” So that night I looked and was available. And so I got it.

AMY: Rick paid $100 for He thought he could sell ads on it: ads to other porn sites. He’d get paid whenever someone clicked on one of the links.

RICK: The very first night I made $200 for that one domain name. One night. For an asset that I paid $100 for.

AMY: To Rick—this moment of discovery about how lucrative simply owning a domain name can be—is one of the great opportunities in the history of American business. It’s like discovering gold in California, or buying land in Manhattan a hundred years ago.

RICK: I really believe everything I experienced in my entire life was so that I would recognize this moment when it happened. This is a unique opportunity in time that my father didn’t have, my grandfather didn’t have, and his father before him didn’t have.

AMY: But unlike mining for gold, or building buildings, all Rick had to do was register a domain name and then sell ads on it. And the 90s was a great time to be doing this, because online porn was taking off. And all those porn sites wanted traffic. So Rick registered every dirty word he could think of. Which was…a lot of them. And it’s not a classy list.

RICK: I got “ass” and I got “bitch” and I got “whore” and “whores.” And I got “orgy” and “orgies” and I got a whole bunch of domains like that.

AMY: At this point, it’s around 1995. And Rick isn’t the only one racing to register domains.

RICK: Before I was buying a few domains here and there. I’d think of them, I’d get up in the middle of the night, I’d register a few. But now I have a sense of urgency. When I would look a domain up, I would see certain names come up over and over and over again. Some domains I would try to register, I’d literally missed by a second.

AMY: When he started, Rick had been able to register his dot coms directly from what was then called Network Solutions—this is the company that had the government contract to assign dot com domain names.
But now, a secondary market had started to take shape—just like it had with phone numbers—where domain collectors like Rick were buying and selling domains from one another.
Rick saw this happening, and he pounced. This first big purchase of Rick’s career is the one that would put him on the map.

RICK: The night I bought for $42,000—my phone started ringing off the hook. The people that I was working with, they really thought I lost my mind.

AMY: This purchase earned him a nickname he still goes by: The Domain King. This was in 1997. Just a week earlier, a college student had bought from someone else for $5,000. So Rick gave the college student a call.

RICK: And I offered him 10 grand. He said no. I offered him 15 grand. He said no. I offered to buy him a brand new Firebird. He said no.

AMY: Finally, Rick offered him $42,000. That worked. The kid walked away with 37 thousand in profit after doing no work for a few weeks, and Schwartz walked away with one of the most valuable domain addresses in the history of the internet.

RICK: So 30 to 40 thousand people a day would type in to see what was there. Well, if someone types in something that they’re looking for and they find what they’re looking for, guess what: you probably have a really good chance of making a sale.

AMY: Whenever someone typed into their browser, and then clicked through to one of the porn sites, Rick got anywhere from a tenth of a penny to 25 cents.

RICK: And most of the time had one link in the middle of the page, and you know what it said?

AMY: What?

RICK: Enter here.
That was it. That was the entire site. I can’t tell you how many years all I had was “enter here.” If you have something pure, why would you want to like make them go through a maze of nonsense to get to where they want to go?

AMY: What happened when you clicked here?

RICK: They would go to whichever adult site would want to pay me the most. In 1998, I hooked up a guy from Australia. He bought that link exclusively for the next five years for $30,000 a week.

AMY: $30,000 a week. Over the years of owning, Rick guesses he earned about $20 million in ad revenue.
Then, a couple years ago, he sold the domain for almost $9 million. So all together: Rick made somewhere in the neighborhood of $30 million. On an investment that cost him $42,000.
Which is an insane amount of money to make on a two-word phrase. But this kind of thing made sense back in the 90s. Most people were just starting to use the internet, and search engines were still pretty basic.
So If you wanted to find online porn? Yeah, there’s a good chance you would manually type the word “porno” into your navigation bar.
But what about now? Why are they still so valuable? Think about it, If you want to buy a pair of shoes, you probably don’t type into your navigation bar, just to see what’s there. You go to Amazon or Zappos.
And meanwhile, the dot com has a lot of competition. There are more than a thousand other what are called top-level domains, or TLDs. You could have,—that’s the TLD for the nation of Palau.
Functionally, all TLDs work exactly the same way. They’re addresses. They take you to a place on the internet. And once you get there, whether it’s a dot com or a dot pizza, has no effect on what that website is able to do.
And yet, the dot com is still king. sold for $9 million earlier this year. It can be yours for $500.
Rick thinks this gap in value between dot coms and dot-everything-else will always exist. He’s betting big on it. Today, he owns about 7000 dot com domains.

RICK: My gift is recognizing a great domain name. I’m a connoisseur and a collector and an entrepreneur. My goal is to put the greatest portfolio on earth together. I look at it as a generational business. This is a business that will outlast my lifetime and possibly others’ lifetimes.

AMY: There are a couple of reasons Rick believes that dot coms are a great long-term investment.
One—and this surprised me—is that people do still type in words for things they want, followed by a dot com. Not a lot of people, but with Internet use growing every year, it adds up.
For instance: every day 1000 people type in, and each time they do, Rick makes a few cents. If you do the quick math: that’s $10,000 a year. And remember: he owns thousands of dot coms. And these days, it’s not just porn domains.

RICK:,, I had numbers like, for the pilgrims.

AMY: The second reason, the bigger reason, that Rick hangs onto these addresses is the same reason that he loved those 800 numbers: he thinks the dot com adds credibility.
Which means that businesses will always want the dot com version of their name, even far off into the future. And when a new company decides it’s worth the investment, they’ll have to go through Rick. Take, which Rick sold for $3 million in 2009.

RICK: I don’t know jack-anything about the candy industry, right. But the minute I get a domain name like, I get a seat at the candy table whether they want me there or not.

AMY: Having that dot com after your name, in other words, it makes you sound legitimate. And it makes you sound legitimate because it’s familiar. We’re just used to it.
There’s a term for this: path dependency. I learned this from Thies Lindenthal. He’s a professor at Cambridge who studies real estate, both physical and virtual. And he says, there’s nothing really all that special about the dot com.

THIES LINDENTHAL: It’s simply that they were first and that they are the biggest and that everybody knows them and everybody is really used to just saying, “Oh yeah ,it’s a domain name, so it must end in dot com.” And everybody who’s using something else that’s different from a dot com has to then put in a bit more effort, to tell everybody “hey no, I’m not in dot com. I’m in dot de or dot nl. And that’s path dependence.

AMY: What all this adds up to, is that if you want to start something, a business or whatever, you basically have three options. One: blow a bunch of money on the dot com version of your name.
Two: Come up with some other name—even if it’s weird or unpronounceable—that maybe you’ll be able to afford the dot com version of.
And three? Like Thies says, you can put in a little more effort. Do something risky: challenge path dependency. Pick one of the thousand-plus other TLDs out there. Be dot baby or dot book or dot ninja.
And—when I think about that third option—I like it. Because if we all became a little less accustomed to the dot com, the internet might become a more democratic place, not just for people starting businesses, but for anyone who wants to start something new online. And on that more democratic internet, what would matter is how good your product is, not how much you spent on your domain name. The barrier to entry would be lower.
Coming up, after the break, the rubber hits the virtual road. We, Gimlet Media, consider our own domain, which is not How much do we care? How much is worth to us? That’s coming up.


AMY: A few months into reporting this story, a funny thing happened: an email came into the address. Lisa Chow read it first.

LISA: And he says, “Hello. I’m a huge fan of some of the Gimlet shows—Reply All, Startup, and now Mogul—and went to the other day and realized it’s not your domain. Have you guys considered picking it up? The acquisition process might make a good episode of StartUp, too.”

AMY: This email came from a guy named Tim Bourquin. I called him up.


AMY: Hey, Tim. Hi.

AMY: Tim is a reserve police officer and entrepreneur in Southern California. He listens to podcasts on his commute.
And eventually Tim did find our actual website, which is But that little delay in finding it—he’d kinda gotten snagged on it. It struck him as strange.

TIM: I think most people if they don’t find you there, probably keep looking and they do find you. They go to Google and they do find you. It’s not like someone goes, “Oh, it’s not there! I’m done!” At the same time, most of the time, the host doesn’t say the full “gimletmedia” right? They say Gimlet. So I think it probably would be valuable for you to have it.

AMY: Tim owns a few domains himself. And he had a proposal for us—maybe he could help us get Maybe we’d get a good price if the offer came from an intermediary—in other words, not directly from someone at a company called Gimlet. Of course, we had been down this road before.

MATT LIEBER: Well, we tried to buy in the early days, when we first started. When we first named the company Gimlet.

AMY: Matt Lieber is one of Gimlet’s founders. And in 2014, he’d reached out to the owner of—a company called Uniregistry.

MATT: The person we tried to buy it from wanted $45,000. I think I tried to negotiate a deal.

AMY: Matt offered the seller $5,000. No dice. So he settled on a new, less good but perfectly acceptable dot com: gimletmedia. It cost ten bucks.
This was a trade off. Matt knew that if we didn’t have there would always be people like Tim out there, people who looked for us and probably found us eventually, but were left with this nagging question: what is up with Gimlet not owning And maybe that made us seem like a less real, less credible company, somehow.
On the other hand, $45,000 was a lot for a brand new company, especially one that most people reach through a mobile app, not through a website. The Tim Problem seemed like something we could live with. Which is why—three years later—faced with another opportunity to buy—Matt’s position hadn’t changed.

AMY: Are you still basically at the “we would pay $5,000 level?” That feels about right to you?

MATT: Oh yeah, definitely. I think five. And that’s not my negotiating position, and then, like, if they say thirty, we’re going to do positional bargaining and then come out somewhere in the middle. That’s not what I’m saying. I’m saying five is truly the number.

AMY: But meanwhile, the price had gone up. When Tim reached out to the seller, Uniregistry, the quote he got was $76,000. I told him Matt was only offering five. Tim wasn’t optimistic, but he offered to give it a shot. A week later, I called him.

AMY: So how did it go?

TIM: So, I wasn’t sure I’d get a response at all, so I just said how about $5,000? Is there any way to make that work? And I expected it just to be radio silence. Because it felt a little bit like you walk into an open house for $100,000 and you’re like how about ten? Ha ha. So, like four or five days later he did respond. And he said: they won’t do it for five, but how about five down and a thousand dollars a month for 48 months.

AMY: $53,000. After I got off the phone with Tim, I told Matt Lieber. He sent back one of those emojis of someone laughing so hard they’re crying. I took that as a no.

It seemed we were at an impasse. But there was one more person to talk to.


AMY: Hi, Frank!

FRANK: Can you hear me ok?

AMY: This was over Skype. Frank Schilling is the founder of Uniregistry, the company that owns and over 300,000 other domains. He lives in the Cayman Islands. And he’d never even heard of

AMY: Did you know you own that?

FRANK: No, I did not, actually.

AMY: But now that I mentioned it, he was glad he did.

FRANK: It’s a great name for a bar. It’s a great name for a restaurant. It’s short it’s catchy it looks good as an e-mail address. You know It sounds easy to say. Easy to remember. It’s just, cool names are hard to find. Cool, catchy, memorable names are difficult to find.

AMY: Frank doesn’t get involved in his company’s individual domain sales. He has salesmen doing that. But just off the top of his head, he thought a name like that would probably go for $50,000 or so.

FRANK: Whatever it is, it won’t be cheap, you know. You know, the idea that a name like that would go for, you know, hundreds or low thousands of dollars is preposterous. It just wouldn’t happen.

AMY: I obviously don’t get to make these decisions for my company but I’ll tell you that my my boss offered $5000.

FRANK: Yeah. And then I’m sure he thinks that’s a respectable number. And it is, and I don’t mean to be disrespectful. You know, $5000 is a lot of money for certain things, but for a great domain name, I’d rather have than have his $5000.

AMY: A while back, I’d asked Rick Schwartz—the domain king of south Florida—what he thought of Frank Schilling. He said, “Oh, Frank’s a great guy. But there is this one place we part ways. It has to do with the dot com.” For Rick, the dot com is his religion. If the dot com loses value, so does his portfolio.
But Frank Schilling has diversified his business. These days, dot coms are just one part of it. Dot link. Dot biz. Dot email. To go back to the real estate metaphor, Frank’s not just buying property in New York anymore. Because even cities come and go.

FRANK: I think in 20, 30 years, it’ll be like a New York City today compared to New York City in 1900. 1900 New York City was one of only a few cities like it on Earth. Flash forward to today. There are many, many great cities that rival New York, you know? So New York is still a great great city, and, if you’re a New Yorker, you’ll proudly proclaim it’s the best. But eeeh, there’s more. It’s a bigger world out there, you know?

AMY: While I was on the phone, Frank started poking around his site, to see what else might be out there for a podcast company called Gimlet.

FRANK: I just visited, and when I type in Gimlet, uh…let me just double check. I think is still available. And it is…let’s see. Is it? No, it’s actually registered. Did you guys register this one?

AMY: We did. We bought it three years ago, from Frank himself. We own that one too., same.
Frank seemed to think we were doing just fine.

LISA CHOW: Amy Standen is a reporter for StartUp.
Coming up on StartUp, we hear about the epic lawsuit that gave birth to the entire domain market. And we meet the man who is still chasing what he’s owed, more than a decade after he won the case…

GARY KREMEN: Hey, if anyone finds any of his money I’ll give you a reward! 20% of what I recover! $70 million, that wouldn’t suck. Come and get it!

LISA: Be sure to listen next week.
StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Pat Walters and Annie-Rose Strasser. Production assistance and fact checking by Max Gibson.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. For full music credits, visit our website.
David Herman and Ian Scott mixed the episode.
Special thanks to Jon Kimball, Rob Barbour and Tim Bourquin.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you next week.

We do our best to make sure these transcripts are accurate. If you would like to quote from an episode of StartUp, please check the transcript with the corresponding audio.


Introducing Season 6

StartUp returns with a brand new season on September 1st.

August 28, 2017

BONUS — Check Out Mogul: The Life and Death of Chris Lighty

A preview of Mogul: The Life and Death of Chris Lighty.

July 25, 2017

Hosted by

Lisa Chow

Lisa is co-host of StartUp. Previously, she was a senior editor at FiveThirtyEight and a reporter at NPR's Planet Money and WNYC. She has an MBA from Columbia .

Hosted by

Alex Blumberg

Alex is the host of StartUp, and CEO and cofounder of Gimlet. He 's an award-winning radio journalist and former producer for This American Life and the co-founder of Planet Money.


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