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HEFFNER: I’m Alexander Heffner, your host on The Open Mind. When a lightbulb goes of … a breakthrough, a business proposition, an idea—the entrepreneur’s first stop is the world’s largest domain registrar: GoDaddy. In an era of “too big to fail,” a glimmer of hope for the aspiring small business is virtual land. Former Microsoft and Yahoo executive, Blake Irving is CEO of GoDaddy, and he joins us here today.
From scantily-clad Super Bowl commercials to IPO bona fides, the now publically traded, multi-billion dollar company is on the frontline of American free enterprise. “We have a huge vision at GoDaddy,” Irving says, “to shift the entire world economy in the direction of small businesses, by giving entrepreneurs the tools and insights they need to thrive.” He adds, “We’re doing this by leveraging world-class machine learning and predicted analytics to help our customers make better decisions.”
Irving is cautiously bullish on the power of artificial intelligence, AI, to enhance the future of work. But he’s also encouraging a next generation of creative skill not susceptible to computerization. There are myriad issues to probe with this tech leader, including net neutrality, on which Irving stood with several past guests, Mitchell Baker of Mozilla, Sue Gardner of Wikimedia, Sue Herman of the ACLU, and John Palfrey of the Digital Public Library. So let me ask him first if he’s afraid that internet service providers, instead of price gouging under new FCC regulations, threaten us with The Great Internet Slowdown of 2016.
HEFFNER: Should we, should we be afraid?
IRVING: I don’t, I don’t think so. Uh, I, I think that, the, the hue and cry of small business, of the citizenry of the US, who largely are small business owners, as it, as it turns out, you know, I think 85% of businesses in the US have five or less employees. 75% are sole proprietorships. These people need the same access to technology that large companies need. And, and in fact, one of the things that’s amazing about the internet, it’s a, it, it, it levels the playing field for mom-and-pop, you know, on Main Street, and the large, uh, store, that might have entered, you know, somewhere else in that environment.
And if you think about the internet and accessibility, small business needs the accessibility that big business has. They need to be found, they need to have their business found online, and if they’re smart on the way they search engine optimize their site, they put up a website that allows people to easily transact with them, uh, they can have a positive effect on the economy, they can have a positive effect on their lives, on their community’s lives. Uh, and if that is taken away, it’s going to damage the US economy.
So, I think it, it’s imperative that small business, and individuals, have the ability to have the same access that large companies have, to the same speeds. I want to transact a purchase on a website, I, I want to do it just as quickly on, on, you know, mom-and-pop’s website that I do on Walmart’s website. That’s just the way it should be. Just like roads, I have the same access on roads in the United States, whether I’m, you know, a large trucking company, or I’m an individual trying to take my kid to piano lessons. It, it’s the same.
HEFFNER: If you’re in a more affluent community, those roads may be more secure, and this, and the concern, to use your analogy, is that the oneness, like we say, “one person, one vote,” but the oneness, the speed at which we’re all getting the internet, can’t possibly be the same if excessive profit is the mandate. But you’re, but you think that Comcast and other companies that provide internet are satisfied with the arrangement that the FCC has made regarding net neutrality, and are not going to slow down the internet to make a point.
IRVING: Uh, you know, I’ve seen, I’ve seen evidence, uh, and I’ve seen evidence only reported, that this has happened to some, um, some large businesses. Now, I know that, you know, there’s, there’s certainly different tariff rates for individuals who are buying a package from whether it’s, I, I don’t care, whether it’s Comcast or Charter, or, uh, AT&T for that matter, where I have, uh, a slow speed, a bigger speed, you know, and an even higher speed. Usually there are three different options I have in terms of what I want to purchase as a consumer.
The business on the other end, that’s hosting with us, that’s hosting with, with any provider, needs to be able to have their website operate just as quickly as anybody else that’s going to be accessed by that consumer. So, the consumer tariff is different. The access for those small businesses should be exactly the same. I mean, the economics of the internet in terms of, for a, for a service provider, again, whether Comcast or Charter, has existed for a long time. You know, tiered pricing for those tiered services, that’s been around for a while.
Uh, and of course, pro-, profitability’s a mandate on, on each one of those segments. Um, on small business, it shouldn’t be.
HEFFNER: And I think you’ve made the point that the digital divide hurts businesses like your own. You want folks out there to be able to buy domains and to grow businesses on those domains.
IRVING: Yeah that’s, that’s what we do. Uh, you, you said it in your preamble, right, somebody has an idea. They say, “Oh, I’ve got this wonderful idea, I’m going to go do this. The first thing I’m going to do is go buy the real estate that represents that idea the, the best way I possibly can on the internet.” And it’s usually a domain name that is as short as I can possibly get it, as descriptive for my business as I can make it, uh, I’m going to go buy that, and then I’m going to go stand up a web presence on it, uh, a website. I’m going to try to get into Yelp, I’m going to try to get into Open Table and Urban Spoon if I’m a restaurant, and I’m going to try to get found by as many consumers as I possibly can, if that’s the business I’m in.
And it’s imperative that, that that’s easy for them, or this whole notion of trying to fuel the economy by having small businesses have a friction-free path to getting there, and turning an idea into something powerful, uh, is, is just kind of lost. So, you have to have that openness and that equality.
HEFFNER: And I think you have a perspective, and Silicon Valley has a perspective, when it comes to thinking about free enterprise, it’s not just enterprise, it’s free enterprise.
HEFFNER: Uh, do you think that, uh, the community of, um, these larger companies, your own included, have, have recognized, um, in this culture of inequality, that the web is where that potential for free enterprise, uh, is most palpable? We can democratize and begin to make up that inequality gap on the web, maybe more than any other business.
IRVING: I think it’s absolutely true. I mean, if you, if you fast-, just look at the last decade. You know, in retrospective. Small businesses, if they were going to try to get on the web ten years ago, would have had to stood up a server, put it into a datacenter somewhere. And it was very, very difficult to establish a web presence. Two decades ago, near-, nearly impossible.
Today, you have services like ours, services like Wix, services like Amazon WAS where I don’t have to make an investment in hardware or software. It’s incredibly simple for me to go put my shop online, or to put my shingle up online, and hang, uh, you know, I’m a window washer. I basically put up a website that allows people to schedule with me their appointment for window washing, and even pay me on my website. That was unthinkable, uh, a decade ago. And now it’s pretty darn easy to do, and that creates more of a producer economy than a consumer economy, because it allows folks to expand their footprint. To more ea-, more easily acquire customers, and, and run their business, uh, in a way that was impossible, um, impossible a decade ago.
HEFFNER: You wrote, recently, Blake, “Economically, we see a future where enterprise business becomes increasingly efficient by automating much of their workforce using artificial intelligence. Automation will come both from advanced robotics and manufacturing, and from computerization of complex analytical tasks.” But you’re, you’re very keen on recognizing that the, there is a massive scale for which certain activities, you say, dishwashing, court clerking—
HEFFNER: —uh, telemarketing, those activities can, can be, um, made into, uh, automated processes.
HEFFNER: But you, um, are interested in the future of creative work.
IRVING: If you think about somebody who, um, bakes cakes, somebody who builds custom bicycles, uh, somebody who handcrafts baskets, or builds, um, cabinetry for homes. The, those are handcrafted things that, that are going to be very, very difficult to automate, and actually have a pretty personal touch to them. AI—and I’ll, I’ll be very specific—applied AI, um, and the automation of those tasks would be very, very difficult. But applied AI can help those individuals.
In the same way that I described, you know, how do I acquire a customer, how do I retain a customer, if we can tell someone that somebody that is in the same business that they’re in did the following things, and their business increased by this percent by these actions, just by mining a pool of data about customers that are like them, or adjacencies to what they do, but analogous. And be able to provide them some heuristics on, this is what a good business looks like, you ought to just take these next steps. And then make it super simple for them to do it, um, it, it becomes a game changer for those businesses.
Now the, for, for large enterprises, I, I, uh, have, uh, used a photograph of a Tesla plant, where you see robots, you see, you know, a, um, an assembly line, this happens in a lot of manufacturing organizations today. There’s not a soul on the floor. There’s somebody in a back room making sure that the machines are running, but everything’s happening. Those people, the people that are being displaced, um, on that floor, that were once using man-, doing manufacturing jobs have to do something. And they, I, I would argue that there’s this weird place where what makes money, what you’re good at, and what you love, you know, the intersection of that venn diagram, it, it hasn’t been possible for you to be able to do that and make money. And I think, and if you include what, what’s good for the world, as well, which is, I think, from a millennial’s perspective, is becoming more and more important, too, uh, if you can figure out how to make that happen, and have a venn diagram that says that’s where most of the world would be the happiest in, in creating, um, goods or services.
We’re trying to enable applied AI to help them do that. Whether it’s build a website, whether it’s acquire customers, whether it’s run your back office, whether it’s … allow you to have more time to focus on your handicraft, or what you love, or what you’re good at, whether a service or building a product. Um, and taking people that have been displaced from jobs that are being automated, and giving them something that maybe is even more meaningful and more important.
HEFFNER: If you think about that venn diagram, Blake, how do you protect against the displacement of the American worker, or the worker in general?
IRVING: You know the displacement of American worker in the manufacturing sector has been, has been happening through automation. I, I think that the way that you protect it is, is, and, and this may everybody altruism on my part, is, is what I’m describing. Allowing them to do something that is more important and have impact on their local economy, versus building things that are even larger or, you know, a part, or a cog in something that’s much bigger.
Um, not everybody’s going to want to do that. But, as I said, 85% of small businesses in the US, five people or less, you know, 75% of businesses are sole proprietorships. People have taken that step. That should grow. The tools that enable people to take that brave first step, to be their own boss, and to venture out on their own, are easier than ever. Uh, and again, this isn’t just what we do. There’s a whole sector of companies that have started to do this to enable a producer economy. Etsy’s a good example of a company that’s doing this. Uh, even if you think about standing up a store on eBay, or Amazon and, and, and shipping goods and services.
Or the other places where I can be found if I’m a service provider, whether it’s Angie’s List or something else. Those are fundamentally different tools than were available, uh, a decade ago, two decades ago. And that allows people to strike out on their own, and now have to worry about, how do I get my next customer? You still have to worry about it, but it’s not an insurmountable, um, mountain to climb. There’s tools that will enable me to do that, and do it online.
And you get back to the, the conversation we had earlier, about access. If I have access to the same speeds and the same capabilities that a large company has, what stops me from being successful?
HEFFNER: What is it in the tech mindset that, because there is a qualitative difference and, and, uh, maybe a character difference, too, in the willingness to forgo immediate profit on an issue like net, net neutrality. Where a Facebook, or a Netflix, if there were faster speeds for those willing to pay more, you would, uh, drive access down, but you might be able to win a short-term profit. Uh, what’s stopping, uh, the tech moguls from, from that?
IRVING: Uh, you know, I, I think I’ll, I’ll, most folks in tech, and the company’s that you just mentioned, have a pretty long-term view on what success looks like. And—
HEFFNER: And it’s not dollars and cents.
IRVING: It’s not, it’s not always dollars and cents, right. It’s actually, certainly there’s, there’s top-line growth, there’s EBITDA expansion. I want to run a, a successful business, but it’s also, what am I going to do for the next decade? What am I going to do for, for the world? And this notion that we have, with our vision of, of shifting the global economy towards small business, you know, it’s, it’s doing a good thing. It, it’s doing something that’s very right, but we know that we’ll make a good top-line, uh, growth story. We know we’ll build EBITDA and profitability into that, while still being able to provide a great cost-of-entry to, uh, to a small business who wants to get started. That, that’s us.
And for folks like Facebook or Netflix, or, um, or, or LinkedIn, or Twitter, there is a, a view that says, “Look, I have to continue this growth pattern for a long, long time. And if I focus on short-term profitability at the expense of long-term growth, then that’s a problem.” And, you know, I think it, Google, Facebook, the companies that you mentioned, those, those folks have a very long-term view. Um, and, and are, are quite balanced, I think, at the, the way that they think about it.
HEFFNER: There was a long road to renewal for the American auto manufacturer.
HEFFNER: Uh, how does that comport with, um, because they, they need a short-term profit?
IRVING: Uh, when something like that happens, it appears, it, it seems to me that, maybe at some point, you lost your long term vision, and you were focusing too near-term. And, if I think about, you know, uh, some of the work that went on almost two decades ago on electric vehicles, and the work that stopped on electric vehicles. And, of course, we’ve shifted, and we’re seeing lots of hybrids, and lots of really wonderful, uh, electric vehicle technology. And I was at CES last week and was astounded at how many, uh, how many cars were there. There, there, there is a long-, a longer term view that I’m seeing come out of companies that are, um, more traditional American auto manufacturers. And I was in a, uh, session with the CEO of Ford last week, and he was talking about the investments they’re making in the long-term. I, I think that got missed, at some point. I think it became a very short-term focused, um, short-term focused business.
But I think if you keep your eye, you know, it’s like, to, it’s a racing analogy, but what, what racecar drivers will tell you is, “I split my windshield, I split my windshield into very short-term view, and long-term view.” I want to see what’s coming way up ahead of me, and I want to be able to see the rocks that I’ve got to miss up front. I don’t want to see where I’ve got to go around them. So I’m going to stare at the places that I need to drive near-term, but I’m keeping a road on the, you know, an eye on the future. And I think, if you balance those two things, I think business will, will be doing a good and right job in saying, we’re going to balance the, the future, and investment, and what we’re going to do to make sure that we’ve got a sustainable business a decade, two decades from now, not what we’re doing to make the quarter. And I don’t think that was happening.
HEFFNER: Have we done enough to build, sufficiently, a firewall so that 2008 is not repeated?
IRVING: Oh, gosh, I don’t know.
HEFFNER: There has been some analysis this year of 2016 that, uh, all businesses, tech and non-tech would suffer from a traditional recession or a relapse of recession. And I’m wondering if that’s at all on your mind.
IRVING: Um, honestly it’s not. Uh, and, let, let me explain why for, for my business. Um, people rely on themselves when things go wrong. So, if companies start to infer that they’re going to lay off people, um, folks start thinking, “You know, I’m going to go do something on my own.” When people say, “I’m going to go do something on my own,” that means that we’re an alternative for them. Because they’re thinking, “Oh, my gosh, I might be, I might be laid off, uh, I don’t know if it’s going to happen, but I’ve heard rumors,” or, “I know this other company in my sector started laying people off. Therefore I’m going to go, uh, I’m going to go, this idea I’ve wanted to pursue for a long time, and I know I’m good at this, and I really like doing it, I’m going to go get a domain name around that, and I’m going to go stand up a web presence.”
That’s better than buying a brick-and-mortar store. It’s a heck of a lot cheaper for us, you know. We start, start people at a buck a month for getting a domain name, and a website, and an email address that makes them look like a professional. They, they could run out and do that, uh, and feel, uh, protected. So, for our business, you know, if you tracked it back, uh, through the recession in 2008, it, we weren’t affected, because of that sort of odd phenomenon of people relying on themselves when times get tough, and they say, uh, “I’m going to take care of myself, I’m going to take care of my family, and this is the way I’m going to do it.”
HEFFNER: That’s so interesting. It’s real upstart—that could be a firewall, upstart imperative.
IRVING: Well, it’s interesting, it, it sort of trades in inverse to, um, and, I don’t, I would not say, ever, that, you know, if the economy’s going down, our business is booming. That’s, that’s not the way it works. But we tend to be relatively resilient when that happens, because folks are reli-, relying on themselves. And we’re a place that people go when they have ideas.
HEFFNER: I’m not going to let you leave, Blake, without demystifying for our viewers who are not as familiar with domains. Like you’ve said, it’s virtual real estate. You have an idea, if you’re a Mark Zuckerberg, “TheFacebook” turns into Facebook.
HEFFNER: You get through, uh, GoDaddy. Um, there has been for, for decades, uh, mystery en-, enshrouding this, uh, industry. Um, there are people who buy and sell domains like commodities or real estate. Uh, take us, uh, sort, sort of on an automated car ride through GoDaddy and how it works.
IRVING: Okay, okay. So that, that’s a, that’s an appropriate analogy. So let’s, we’ll talk about the car ride. So, today there are, you know, 270 million domains, uh, in the world today. About 270 million. We manage 62 million of those, so a little over 20% of the world’s domain names, we manage. So, those are all, if you think about it, they’re all owned, right? Um, the liquidity in the domain market is tiny. So, the number of domains that change hands, um, between owners, is in the hundreds of thousands after, of those two hundred and, you know, 260, -70 million domain names that are available.
Um, if you think about cars in the US, there’s about 250 million cars on the road, and think of the liquidity and the aftermarket of cars today. Right, so, there are used cars that are for sale. Some are expensive, some are cheap. There’s a huge, ride range on them, based on availability and supply-and-demand. Uh, and the same thing exists in the domain marketplace.
What we’re doing at the company is making it very, very simple for somebody when they type in a domain name, “I have an idea, this is what I want to get,” is actually displaying things that have—and this is an interesting search problem for folks—but I type in the name of, uh, for scientists, scientists love this. I, I type in the name of something, and I’m going to query a corpus of things that don’t exist. So, I’m querying for the availability of a name that’s never been chosen before, therefore it’s new, and I’ll get it at a very inexpensive price.
I’m also going to mix in, in my query results, a name that’s been owned by somebody before, and they may be put, put it into inventory. And depending on the attractiveness of that name: is it common, are there very few characters in the name, is it super easy to type, is it incredibly memorable? The price of that will vary. Now, entrepreneurs, uh, in the real estate market have existed forever. And when you have, uh, uh, a, uh, commodity that is, uh, finite, and there are very different, you know, attractiveness, uh, capabilities to each one of these things.
If you think about, uh, a four-character domain name that represents something that’s very important, it’s going to be very expensive. Because somebody saw it, could be a decade ago, and bought it, and have been waiting for the demand to come up before they make it available. So, we’re going to try to actually make that incredibly liquid so folks, uh, in, in fact are doing that now. So you’ll actually get a search result that has stuff that’s owned and things that have never been claimed before.
HEFFNER: One of the, the problems therein is sometimes locating individuals who own the domains, and they have, really, a right to refuse any offer, by, by being, um, completely hidden from, from, uh, your access.
IRVING: Most domain investors are doing it for economic reasons. So, they, unless they are using it for a website that they already own, uh, and it’s important for them for their business, uh, if they bought that name, with the, uh, with the intention of re-selling it someday, they’ll make it available. So it’s very unusual where you’ll see someone who is holding onto a domain name, uh, with no intention to sell it, ever. Um, and doesn’t have a website on it. So, it’s pretty unusual. What we’re, we’re, what we’re doing for folks, and, and the tools really haven’t been really simple tools and an acc-, accessible market hasn’t been there to make, uh, make it available for domain investors to easily manage that process. So, they can get something up, they can, they can put it into inventory. You know, heck, I’ve, I’ve got, I’ve got 64 domain names, many of those names I, I don’t have anything sitting on top of. I’d done things for family members, I’ve had ideas of my own. Um, none of those things are in inventory today.
Um, if somebody said, you know, “We’re going to price all these things for you,” back to the car analogy, just like the Kelley Bluebook would, saying, “We think these names, based on the attributes that we’ve algorithmically determined, we think these things are worth this, would you like to put that into inventory?” Sure.
HEFFNER: We’re about out of time. I have to ask you, what are you doing to, to reduce the, the spammer, uh, um, the spammer users who buy domains to perpetuate, um, you know, spam assaults on, uh, the cybersystem?
IRVING: Yeah, so, we do, we do a ton from a, from a privacy and security perspective, to make sure that, that, that domains that are hosting with us never spam. I think one of the, one of the bigger issues that, that I think Google has helped solve is when somebody types in a query, and misspells it, and then lands on a website that doesn’t, isn’t, is approximately close to what they wanted to achieve when they did that first query, but, uh, is different. Uh, and there was, there used to be pretty heavy monetization in that business where, just by landing on a website that I didn’t really intend to go, there’d be, there’d be money there.
Um, and that is not so much the case anymore. So you see much less of that type of spamming activity, uh, than was happening before. Uh, and, and, and that’s a good thing. But that’s really, I think, the search engine, uh, the search engine businesses that has been trying to remove that capability there. Um, from our perspective, like, we sell the domain name, people do what they’re going to do with it, um, and they can host it anywhere they want.
Um, I think it’s much better from a user experience perf-, perspective to have a search result query come back and tell you, “Hey, you spelled that wrong. This is what you probably meant.” And have that be accurate, and get them to where they wanted to go in the first place versus landing them on a page that has very little value, or is just trying to arbitrage the traffic.
HEFFNER: Blake, thank you for joining me today.
IRVING: Thanks, Alexander.
HEFFNER: And thanks to you in the audience. I hope you join us again next time for a thoughtful excursion into the world of ideas. Until then, keep an open mind. Please visit The Open Mind website at Thirteen.org/OpenMind to view this program online, or to access over 1,500 other interviews. And do check us out on Twitter and Facebook @OpenMindTV, for updates on future programming.