Faces of Marketing podcast: Ray King, founder of Top Level Design + PorkBun
Ray King is founder + CEO of a domain name registry called Top Level Design (TLD) and a registrar called PorkBun. Ray is a quiet legend here in Portland, Oregon as a serial tech entrepreneur who has founded six companies, beginning his first one in high school. He has had three successful exits and his two current companies are trending in a very positive direction. Despite all of this success, Ray talks about failure and how his only failed company 6 years ago has haunted him and he has been quietly proving himself ever since with building TLD + PorkBun.
As with all of us, Ray’s journey has not been a straight line to where we are now. He grew up in Manhattan, and as a kid in the early 80's, he’d be on the NYC streets near a paper stand, wowing people with what a computer could do. As an introvert, this was mind-bending to experience the amazing possibilities of converting strangers into customers and friends. It gave him the confidence to start and build tech-related companies from nothing into real businesses. And that confidence was hugely important when he had to drop out of college for a year to care for his ailing Dad. Tune into Ray’s powerful story in this podcast episode.
Ryan B.: Hey there, welcome to the Faces of Marketing podcast where we talk about the human stories and lives of different people and perspectives in the marketing profession and entrepreneurs and movement makers. This is your host, Ryan Buchanan, and I’m here with my good friend, Ray King, founder of Top Level Design and PorkBun. Ray is a long-time entrepreneur and has founded three other tech ventures — Semaphore then SnapNames then AboutUs. And now, you’re having a blast with PorkBun and TLD. Can’t wait to dig into all these things and dive in. Welcome to the show!
Ray King: Right. Thanks Ryan. I’m glad to be here.
Ryan B.: Yeah. Awesome. So, you and I met 15 years ago through Oregon Entrepreneurs Network (OEN) and I think you had just started SnapNames at the time, which was a way to barter or reserve or kind of buy a domain name that maybe it had already been owned or purchased by that owner.
Ray King: We called it a back order.
Ryan B.: Okay. That’s what happened. You just captured my whole paragraph into two words “back order.” Got It.
Ray King: Yeah. So basically there was, um, a time where everyone was snapping up dot com names. In fact, that time continues to now — there’s 130 million names registered for something like that. So it’s really hard to get the name you want. Many names are registered but not being used. And you hear over and over, “Oh man, I wish I could have this name. I wish I could have that name. It’s perfect for my business. I can’t get in touch with the owner. They don’t want to sell it. Um, I don’t want to get in touch with the owner because then they’ll want more money for it,” — that kind of thing. So, we realized that every day a lot of domains drop out of the system, so they expire and then some time after they expire, they become available for re-registration. By asking people, “okay, what names do you want?” We created this database of desire. So figuring out all the names people wanted and then basically comparing that every day to the names that drop out of the system. And if there’s matches then we would just, we would snap them up necessarily.
Ryan B.: Yeah. I don’t think I’ve told you this story, but eroi.com is a tough domain to get it. I mean at the time, four letters and short for electronic return on investment. But when I started the company, we had the domain, eroidelivers.com because eroi.com was taken and over the course of about a year and a half, we communicated with a 1 person company in Australia that was about electronic recording equipment, like e-tape recorders and it was called called TPR Systems. I just think the strategy of getting domain names is fascinating because, we ended up getting the URL of their company name tprsystems.com and started getting leads for them and said, “hey, we’d love to trade you domain names. Are you cool with that?” And it actually worked.
Ray King: Yeah, that’s a great story. So I’ve been in the domain industry for so long and I’ve never heard anyone do that. That’s fantastic.
Ryan B.: Our Creative Director at the time, he was brilliant. And so I’ve got to give Aaron some credit for that. Yeah, it worked. It was awesome. Um, so anyway, before we got on the air, we were talking and you’ll be our 30th podcast episode and you’re the first, you know, legit serial entrepreneur of four companies. I self-identify as an entrepreneur or scrappy entrepreneur, all of that. And, and you know, we had lunch about a month ago and I get asked this question sometimes too, but like, what, what makes you so passionate to start another company and another company and now it seems like you’re really loving what you’re doing. Um, and this company is kind of unlike some of the other ones. You didn’t go the venture capital route. And so like what, what makes you so passionate about being an entrepreneur again and again?
Ray King: I think it’s a joy of building. So building a a company is a great joy. You have something that you can be proud of. And, I think when I talk to other entrepreneurs and whatever stage they’re at, at some point they started with either an idea or a belief, and they just had that feeling like I can make this a reality. And I think that journey’s really, really fun and really interesting. So, I love being an entrepreneur and I love being around entrepreneurs for that reason.
Ryan B.: You also seem to have, at least for me, I would say it fuels creativity. And I know you’re fashionable, you’re into art. One of the TLDs that you have now is dot design. Right? And so, yeah, you’re wearing the shirt right now. I wonder, is creativity part of it as well?
Ray King: Yeah, definitely. Entrepreneurs have to be, because you’re trying to do something that hasn’t been done, which means that every day you’ve got a bunch of obstacles slash opportunities. And if you can’t think creatively about how to solve them, then you’re not going to be able to navigate your way.
Ryan B.: When we had lunch a month ago, I’m so intrigued by part of our conversation, which for me and a lot of my entrepreneurial peers in the Portland area, we’ve kind of looked up to you for a long time. Semaphore — that was before I knew you, but you had an exit to Deltek and that company has gone on to do great things and, and then, SnapNames — highly respected. And then I forgot who acquired SnapNames. Who was it?
Ray King: Oversee in California.
Ryan B.: So, a couple successful exits. So investors and employees, you know, I’m very happy with those two experiences. Then, AboutUs was third. Right. And you know, you had a good run at that and you got venture capital there and and then now you’re on your fourth one and it’s, um, going really well. But this whole notion that I would not characterize from the outside that AboutUs was any kind of failure. But I think you have kind of internalized it a little bit and I asked, “Hey why haven’t I heard you in the news?” Cause you used to be in the news quite a bit of all this entrepreneurial successful things and you’ve been kinda quiet for five plus years or more in the Portland business community. And your response was like, “I really want to prove myself.” I’d love for you to more openly talk about it cause there’s this myth that failure is glorified in the entrepreneurial community and it’s really effing hard. Like, failure’s not a great thing that any of us aspire to and it has a consequence. I was internalizing, “well, Ray’s basically three out of four huge home runs; and AboutUs was like a minor setback, but it wasn’t. Can you just expand on that mindset, which I so relate to because I had a near business-death experience that I hold onto and that was eight years ago, you know?
Ray King: Yeah. Thank you for calling it “a minor setback”, but I think failure is really the right word. The business never was able to achieve its goals. Its goals weren’t clear and, it was a tough experience and I think that we had this idea of building a wiki that would describe other websites and it’s a little bit Meta, right? And, I got a chance to work with Ward Cunningham, who was the inventor of the concept of Wiki. He’s here in town, a brilliant guy. And so it was kind of a neat idea. And it had very early success. When people came to the site and said, I want to know about this particular website, they would either type in a website that they know — maybe like amazon.com or something like that, or oftentimes they would type in their own website. Um, if we didn’t have information about the website, we would quickly scrape the “who is” record. And we would also look at the website itself and look at the, about us page, which is hence the term “about us”. The idea was all about an aggregate of the about us pages but written by customers and users versus the company itself. So we would take that information and would put a Wiki page up so it looked like you couldn’t get to the site and not find information about a website because we would spawn the page in a few seconds if we didn’t have it.
Ray King: Then oftentimes people would see that page and if it was their own website and they’re like, “oh man, the ‘who is’ record is out of date, it was my old address.” So then they get in there and edit it and they’re like, “oh, I can make some changes” to what they see cause they want it to present properly. So now all of a sudden it went from data that was scraped off somewhere to original content.
Ryan B.: It was very newsworthy and credible.
Ray King: Yeah. Yeah. I mean it was, it was a good concept and as a result, the site grew very, very quickly. We had tens of millions of pages and we had a lot of people hitting the site and I think it was like the most popular site in Oregon for a year or two. At some point we decided to start monetizing the traffic. We put a little Adsense ad up…
Ryan B.: Adsense is a Google product, right?
Ray King: Yeah. It’s a Google product designed to help content sites monetize their content. So if you’ve got a site that has a lot of content about a certain topic, you put an Adsense ad up and it directs people to advertisers and you start making money. Our site worked particularly well with Adsense because what Adsense does is it senses the information on the page. So if we’ve got a page about ABCgolf.com and the text on it is about golf, it puts up an ad that’s golf related. And because it does it all algorithmically and our site is not about anything in particular, it’s about other websites.
Ray King: Uh, it just worked really well. So we were generating a ton of traffic and we had a lot of income coming in very quickly. It was crazy. We put this little ad up, then all of a sudden we had hundreds of thousands of dollars per month rolling in. So we had this kind of very interesting start, but the problem we had was that the people were mostly self-editing. Um, and a lot of people didn’t edit, which means we had just a lot of pages that were kind of junkie and the site didn’t really have that much actual value, so it generated a ton of traffic. But, Google over time penalized us. So every time they had a Panda [algorithm] update or you know, all those updates that they did, they would crush our SEO rating. And so things started just slowly moving in the wrong direction. And we were addicted to the revenue and the model.
Ryan B.: Well, and the whole model was built on Google, right? So like revenue came from Google Adsense and when Google changed their algorithm, you were screwed by Google, correct?
Ray King: Yeah. Right. So we started getting less revenue and as a result we kept looking for things to shift the business and create more actual content value, but it was hard because the site was so big and had so much traffic. It was just very hard to pivot. We probably did four or five different ideas. We started making lists of websites. We started writing articles for people and charging for that. We did a number of different things, none of which really worked that well. And I think over time it’s tough. Every time you pivot, some people fall off. But the first couple of times you pivot, people will say you’re the leader. Let’s go in this direction.
Ray King: But you don’t have that many pivots. And I think when you make one or two pivots, people lose confidence. And I lost the confidence of my staff, my developers, and I couldn’t really recover from that. I got to a place where I felt like just couldn’t lead the company anymore. And that’s when we ended up getting merged in with Attensa here in town. So some of the assets and people are still there. But for me it was definitely a personal failure.
Ryan B.: For me, and I’ll redirect this back to you, it was my failure of managing expectations. I had 38 out of 41 employees leave over a six month period. When I did one big pivot, but um, kind of three rounds of layoffs, and cash getting really tight, it was rough. We’re going to try and transform from a creative agency to a software company that ultimately failed. And we had to go back to being a creative agency. But the fact that I didn’t have the hard conversation up front with employees and with selling this software company vision and I wasn’t really honest with employees of how risky it was and that the consequence could very likely be them losing their job because of just running out of cash. That was the hardest thing for me years later to a realize that I was the problem. Just the human factor feeling like I went from hero to villain. It was just so black and white. I had family and friends, investors, and a bank loan that I had to pay back very quickly. But it was the staff that I hung on to that failure the longest. Yeah. What about you?
Ray King: With AboutUs, we raised $5 million and that was from a number of angel investors, as well one VC. So, I have that same pain because you have gone out there and you said what a great idea this is. You’ve asked people to put their money in. On the employees side, you’ve asked people to leave good jobs, you’ve asked them to give you really a lot of effort, a lot of time, um, at startup wages. And so there’s a lot on the line and when your business starts not doing well, it’s a ton of pressure. So I would say that I feel pretty bad about for the investors as well. Some of the angel investors have a lot of money, they didn’t put that much in and you know, it’s like, okay, but there’s some that it was a real investment. And I know it affected them and, I’d see them, some of them are still good friends of mine, and I still feel like apologizing. Sorry. You know, I really feel bad that that didn’t go the way we expected and they’re so good about it, which just makes me feel worse.
Ryan B.: I hear that. Well, thanks for sharing all that. Alright, so I’m going to switch gears a little bit. I think for almost anyone listening to this podcast is unlike you in that we do not know the domain world that well at all, but we consume it — we use the internet all the time. It’s so in our lives, and yet I am so fascinated by how it works. When you type in a URL or you go to any website, explain how this governing body called ICANN works! Companies and people spend millions of dollars to get a top level domain, dot design or dot agency. What was the highest paid top level domain — dot web — was like hundred something million.
Ray King: $135 million maybe. I think it was 135. If we just roll back in time — the Internet basically started with Internet Protocol (IP), which is a way in which computers could communicate with each other. And, when that first came into existence, each node or server was assigned an IP address, an internet protocol address. And that’s how you knew, it’s a number. Like if I call your phone, then I use your phone number to get there. In around 1985 or so, someone had the idea to say, why can’t we put a more human, a recognizable and rememberable name in place to represent an IP address. For example, an IP address is like one nine two. Dot Point one. Oh, all numbers. Yeah, exactly. It’s four numbers. Everyone’s seen them, but it’s like number, dot number, dot number, dot number — and very difficult to remember.
Ray King: So it’s a lot easier to remember ‘amazon.com’, right? So when they put that system in place, they said, well, there probably should be some delineation, for what type of domain it is. And they said each country should have a code. And, so for example, now France says dot fr and Korea has kr and Germany has de and we in the United States actually have dot us as well, which is strangely lesser known since we’re very married to com. Um, but that was the idea. And then someone else I think who was in the discussion said, oh, there should be some generic ones, like com for commercial or companies and dot net for network infrastructure or dot org for organizations. Um, and then eventually there was also like Mil Military Edu, and gov. And that was like in the original set. The original thinking was that no one will use dot com.
Ray King: But they ended up putting it in anyways. And of course, you know, it turned out to be wildly popular, but when they put that system in place, that was the DNS system domain name system and this map between IP addresses and domain names obviously greatly helped people navigate the Internet. And the organization that now oversees the policy around the domain name system is ICANN, the Internet corporation for assigned names and numbers. So assigned names and numbers is that piece that connects the names and numbers. And for a long time we had just those extensions. Um, you said the parts of the right of the dot, like the.com. Dot net.org, right? Some people call them extensions. They’re also called TLDs, which is a top level domain. So the thing furthest to the right at the top level, the thing to the left of the dot is a second level.
Ray King: So if you look at amazon.com where ‘amazon’ is second level (SLD) and ‘.com’ is a top level TLD. So for many years people have said, well, why can’t there be more extensions? And it just took a very long time. ICANN does not move very quickly and said they allowed a few here, a few there. You may have seen dot info or dot biz or dot tell and there’s some more that most people haven’t heard of, but there was a, they drip them out a little bit here, a little bit there. In 2012, they opened it a little bit wider and they made a more consistent application process. So the application was still tough. But if you said, I want to run a domain extension, then you can fill out this application and you demonstrate that you have the technical expertise, you understand ICANN and the policy around domains, you understand intellectual property, you’ve got financial wherewithal to maintain this piece of the Internet fabric. And if you go through that process, then, uh, then you can run the TLD. You could become the registry operator for that.
Ryan B.: Yeah, I think like the common perception is that massive corporations control all of that. So it just seems like they’re faceless or whatever, but maybe it’s Google and Apple and Facebook, but just simplifying the fact that a little guy in Portland, Oregon, somehow like applies and all of a sudden controls these important TLDs and then can sell them to millions of people and companies. That is so crazy — how democratizing that is at this global level. It’s kind of cool. It’s kind of like a Tony Stark, but for the common man, but, but it’s also really expensive. You have to get investors or, or maybe if you have enough money, like it’s not a cheap thing to get into.
Ray King: That’s true. There are some large companies in this space, so Google has a bunch of extensions. Amazon has a bunch. The largest player in the space is a company called donuts up in Seattle.
Ryan B.: Donuts and pork bun. Okay.
Ray King: Yes, sweet and savory. The way it works is that anyone can apply. Literally anyone can apply as long as you are able to get the application process. The cost of applying was $185,000. You send that check in with your application basically, and that pays for ICANN to go through vetting your application, and all the work that goes around figuring out if you should have it or if also in more than one person applies, then what to do in that case.
Ryan B.: So it’s like paying for college basically. I’m going to apply to college and it’s only 185 grand.
Ray King: Yeah. So actually originally we were only gonna apply for one TLD, and because the process was daunting and, we were somewhat late to the process as well and we wanted .wiki because AboutUs was all about wikis and I love wikis and you know, probably that’s a separate conversation, but I think wikis are great tools for, for online collaboration and for people to join together around areas of interest. So we went through that whole process and then afterwards, I thought it wouldn’t be that hard to apply for another because many of the questions are the same. So we ended up applying for 10 — we applied for .wiki, .art, .design, .style, .photography, .group, .gay, .llc, .blog. OK, we’ll get the other one later. I’m missing one. Anyway, so we applied for 10 in total and we ended up getting .design, .wiki, .ink and most recently. Dot. Gay.
Ryan B.: That’s super cool. We’re going to pause because I want to get into the human story of Ray and then we’re going to come back to the strategy behind launching a kind of consumer brand called PorkBun. That seems like a restaurant, but it’s totally not. We’re gonna pause on that and go to our normally programmed schedule of, um, like how you, you grew up in New York City and what was that like? you, so you’re kind of a city boy and what, what are your folks like? Do you have siblings? Like, what was it like when you’re, you know, six, eight, 10 years old growing up in the Bronx or New York City?
Ray King: I grew up in New York, in Manhattan. And, to me a lot of people ask the question, “is it weird to grow up in Manhattan, a big city?” something like that. And it wasn’t weird for me because it’s all I knew and I think I had a pretty normal upbringing.
Ryan B.: What neighborhood in Manhattan?
Ray King: Right on the upper east side. Okay. So I think we were on 91st and Madison. And then a little bit later we moved to around 72nd and 3rd Ave, which is still upper east side, just a little bit further down. And, I went to public school PS6 to be specific. And public junior high school and same for high school.
Ryan B.: But I saw on Linkedin or Facebook that you went to like Bronx. Was it a charter school that was science focused?
Ray King: Yeah, there was, um, at the time 4 specialized schools in the New York area, there was Brooklyn Tech, Bronx Science, Stuyvesant and Hunter. And those were all high schools you had to test into. My sister had gone to Bronx Science and so I kind of followed her. She was a couple of years ahead of me and then I went there. It’s a great school. A little bit of a trek for me — I had to take the train all the way up into the Bronx, but a great school nonetheless.
Ryan B.: So have you always, since a little kid, have you always been into coding and tech and science stuff? Or did you think “I look up to my sister, I just, I’m just going to do what she did.” How did that come about?
Ray King: I was kind of science and techie, so I was definitely more into math and science than the humanities and liberal arts side of the equation. And so Bronx Science was kind of natural for me. I really liked math at the time. And like puzzles and things like that. So I was on the math team and you know, had a bunch of really nerdy friends.
Ryan B.: I was going to ask you about that. Did you guys compare pocket protectors and you know, like get the whiteboard out and try and be like the Matt Damon character in Goodwill Hunting?
Ray King: I wasn’t quite at his level, but we were definitely the nerdy bunch and they were hard to keep up with. Back in the day, I was that stereotype of the Asian kid that parents are probably like, you have to get all A’s. That was very much the case. And I think that they probably had more hardcore parents than I did.
Ryan B.: So like the tiger mom stereotype?
Ray King: Yes. Yeah, I think that was definitely the case because these guys were all getting 99 or a hundred on every single test, every single thing, Valedictorian, salutatorian, all that stuff. And you know, I had to struggle to try and keep up.
Ryan B.: I’m saying this as a white guy and it’s probably not my place to go into stereotypes, but was it also expected to play a musical instrument? Was that also part of it?
Ray King: Yeah, definitely. After school then it was Chinese class on Saturdays. You just packed in whatever you could.
Ryan B.: And your folks, did they also grow up in New York or I know you have family in Beijing or Shanghai.
Ray King: They are both from Shanghai and they came over — well, my mom actually came directly to the states. And then my dad went to high school in Hong Kong and then some university studies in London then came to to New York. All around the time that there was cultural revolution and all that going on in China. And so they’d been here for a long time.
Ryan B.: And I remember years ago when we had breakfast. You said the entrepreneurial community in Shanghai is off the charts. Is that a newer thing or did your, are your parents pretty entrepreneurial as well?
Ray King: My dad’s an architect and my mom was a ceramicist and also helped my grandfather a lot with his artwork and his collection as well as his personal art work that he did himself. So they weren’t like on the tech scene or anything like that. Um, I think that Shanghai and China in general is absolutely booming with creative energy and entrepreneurial-ism for both tech and business, et cetera. But that wasn’t really my parents scene.
Ryan B.: Yeah, both my parents are entrepreneurs and so I wonder if they would have been more entrepreneurial if there was a platform for it.
Ray King: I don’t know. Interesting question. Yeah.
Ryan B.: Okay, so you said you were around a bunch of nerdy friends and it clearly rubbed off on you because you got into MIT and I was just, you know, having a daughter who’s applying to colleges literally this summer, heading into her senior year. Why MIT versus other colleges, you know, Stanford or wherever. What drew you there? Was it just like, you realize you maybe had to work harder at it, but you really did love the tech thing and you wanted to be immersed in tech all the time at MIT. Why MIT?
Ray King: I don’t remember knowing that many other schools, but it was a dream of my dad’s from really young. It’s like, “that’s the best school and if there’s any way you can go there, you should go there.” So I didn’t have any other school in my mind, I only applied to MIT. So yeah.
Ryan B.: Did you visit there before you applied there?
Ray King: I don’t think I visited, no, I just, I just really had that first in tunnel vision in my mind.
Ryan B.: I always ask this question and it’s usually 50 /50 on, everybody has this fascinating story. For me, my family is all about like visiting tons of schools, kind of visualizing it, all of that stuff. As I was preparing for this interview, I was thinking that you had the science and tech pedigree to just flow right into MIT and that you would have scoped it out and you know, all that stuff.
Ray King: I think I did pretty well with grades and SATs and all that stuff, but I probably wasn’t a shoe-in and it was mainly the math team stuff that probably enabled me to get in there. But when I got there, it was hard. I remember that in high school, you can take different levels of math. So I had done the first two calculus classes or something. And when I got there, I was like, wow, I’m going to be ahead. I have this one credit, you know, and my roommate, came in and he had five credits, so he was like four years ahead of me in math. And I remember he went to this little school in Arkansas and he was so far ahead that he got pulled out and specially tutored and there were a lot of kids like that.
Ryan B.: Geniuses everywhere. That is not my experience.
Ray King: Yeah. I’m not sure. I mean, I want to give full credit, but I think a lot of these kids just worked hard also. And they were very studious. A lot of them were Valedictorians at their school and it was tough. And then also I had this crazy idea that I wanted to graduate early, which is the dumbest thing ever. I don’t know why anyone would want to do this, but I’d tried to be on a schedule to get out in three years instead of four. So I was totally loaded up on classes in the first year and, and they were really hard. So I struggled.
Ryan B.: Yeah. I find that years when you were 16 years old to 22 or 24 is such a formative time that it really sets you up for, you either have something that really pushes you to your core and it’s like something really traumatic happens or there’s like some life moment of independence that happens. What would be that life moment in that timeframe where it was like this big thing that you had to overcome or like this kind of breakout independence that you had?
Ray King: So I didn’t graduate, and my father had some health issues and we did not have a good financial situation. So it was actually very difficult to continue. And, uh, I had this somewhat of a, always the ability to kind of make money on the side doing things. So I decided to come back to New York and, and work for a year or two in order to put myself on better financial footing to be able to go back. And I did go back for one semester and it was too hard to manage this business that I’d started at the same time.
Ryan B.: So that’s when you co-founded Semaphore?
Ray King: Actually that was the computer school.
Ryan B.: Okay. I missed that one. I didn’t know about that one.
Ray King: It wasn’t really a business, but the computer school was, we were helping people understand how to use at first Apple 2s and then IBM PCs. So I should probably back just a little bit. My sister had a babysitting business and I thought that was really cool cause she was earning money. So I kind of pushed into that in high school. And, because I was the first kid to have a Texas Instrument 59, the first kid to have an Apple 2 computer, the parents of the kids I was babysitting for always wanted me to show their kids how to use the newer technology. So it kind of went from we need you to babysit cause we’re going out to, we’d like you to come here to tutor our kids. You’re great at math, you know, so could you help them with their math homework at the same time?
Ray King: I’ll work on a computer, whatever you have, we’re going to buy the same thing and can you show our kids how to use it. I was doing that and then I was having kids come over to my house. I cleared my bedroom out, I moved into the living room, I put four computers in the bedroom and I was just like, if I can train four kids at a time, than I can make more money. So instead of making from babysitting from $5 an hour babysitting to $60 an hour tutoring to getting four kids in the room was kind of where I was and in high school. And that’s why I knew I could make money and when I couldn’t continue with school, I came back and, and did that for, for about a year.
Ryan B.: Did your dad’s health improve?
Ray King: Yeah. He’s really a survivor, so he did, he did well afterwards health wise. I did have a tough experience, which you’re just like jogging my memory on this. I ended up partnering with two guys from Price Waterhouse (PWC) and spent a year building this training business and when it was time to go back to school — I’m going to try and be as fair as possible, but I think they just figured maybe I’m going back to school. They didn’t really need me. So, we had a partnership struggle where I basically said, this is the deal we made was that I was going to stay here for a year, get this started, I was still going to be a partner. I was going back to school. So we ended up in a lawsuit, believe it or not. And that was actually a little bit defining moment too, cause my, I just wanted to move on. But my dad was like, “no, you’ve been wronged and we’re going to fight this” and it’s, “I don’t care what it cost, we’re going to get a lawyer.” So we literally down the hall — there was a lawyer, and we fought this thing. It was low stakes at the time, but we ended up winning. And it was just a, it was great to know that my dad was like, so in my corner.
Ryan B.: Social justice and family justice all together.
Ray King: Yeah. Cool. Yeah. Yeah. But then after that I couldn’t really continue with the training business and I was kind of tired of it and that’s when I started Semaphore and tried to go back to school at the same time, which was just not a good formula for success.
Ryan B.: Awesome. That’s cool of you to share that. So just to fast forward a little bit, because I want to get a sense of Ray, the person , in there of how you grew up and all of that. I wanted to come back. Talk a little bit of the origin story of Semaphore and it was kinda software in the architecture and engineering space.
Ray King: My Dad was in the architecture business and had about 10 employees and needed a way to track their time and create invoices in a more streamlined way. He said, “well, you’ve got a computer, maybe we can find a way to make a more automated system to create these time billing invoices.” So I wrote something to do that, and after doing that, invoices would pile up. They needed to be collected. So, I wrote a little system to track cash receipts and creating a little small accounts receivable system around that. Um, and then there were expenses that needed to show up in invoices. So we hooked on a cash disbursement system, and a payable system. And before we know what you had all the pieces for an accounting system.
Ryan B.: Didn’t it then expand later to like any service-based business could use Deltek software or is it different?
Ray King: Nope. Always that architecture and engineer vertical. Right. So from 1985 all the way to 2000, it was software financial management software, which was all those accounting pieces. And then we built more related pieces around that. So we had like 13 modules of software is how we, how we sold it back then. Uh, and we only focused on architects, engineers, and designers that entire time. Huh? Yeah, we should have broke out, but we didn’t.
Ryan B.: So was it cool to be able to talk the same language around architecture with your dad? Was there a lot of kind of bonding and mentoring happening both ways? Like you could share with them how the technology work. He could share with you how architecture works.
Ray King: I would say my dad taught me more about just business in things like here’s how you rent a space. He helped us renovate, you know, as we grew because we grew from myself up to over a hundred people. And in that process we’ve rented two or three different offices, which he helped with. I wasn’t that much on the architecture side and the technology was. He’s like, you handle technology obviously. It was nice to be able to work together for a period of time. But you know, over time it just became an independent entity.
Ryan B.: So I’m going to fast forward to what we were talking about before with this whole TLD and Porkbun. Talk to me about Porkbun. I think in order to do that, you might have to explain how the financial model of having a domain name, like .ink or .design or .gay — how you make money off of those domains and then Porkbun is kind of a competitor to Godaddy, right?
Ray King: Yeah, I would say that the understanding our industry requires you to understand that there are registrars and registries, which I know sound very similar, but this is how it works. Registries are in charge of a given top level domain or a given extension. So there is a registry called Verisign that’s in charge of.com. It’s a registry called PIR that’s in charge of .org and we are the registry. Our company name is actually top level design, which is a little bit of a play on words for top level domain. We are the registry for again .wiki, .gay, .ink, .design. So think of the registry as the wholesale provider. So if you wanted to get a name that ended in one of those extensions, you would go to any registrar. So for example, Godaddy or Tucows or Network Solutions or name.com and you would see if the name is available. And if it was, then you would pay whatever they asked for, which would include our wholesale fee. So we would get the wholesale fee. So for .design, it’s $33, and the registrar who is the company that interfaces with end users, they would put a retail markup on top of that. So Godaddy is the largest registrar in the world. Registries can only sell to the registrars so they’re not publicly-facing and registrars source names from, from registries. Does that make sense?
Ray King: Let’s just stick with the analogy of wholesale and retail — way easier way to think about it. I should’ve just said that to start with. So our four TLDs are on the wholesale side and Porkbun is retail.
Ryan B.: Porkbun is retail for all the TLDs out there — anything you want.
Ray King: Correct. Actually, Porkbun started as just a way to support selling .design. Okay. So it started only selling our own TLDs and then over time we added more TLDs because if a person has a .design name with us, they might also have some.com names and it’s easier to have them housed in one place. So we began to add more extensions and now we have over 400 or something like that. Um, we also added email and hosting, which are kind of necessary components for people to really use your names. And over the course of a couple of years, it went from a specialty registrar to a more general purpose registrar. And what we’ve tried to do is give people great value. So we mark up names at most only a dollar. So if the wholesale price for a name is 20 bucks, we sell it for $21 plus the credit card fee and
Ryan B.: Competitors more double it, like 40 bucks.
Ray King: Yeah, I would say that across most registrars doubling is probably at the high end. A lot of registrars might add 30% 50%, something like that. But we’re pretty much at the low, low end in terms of, in terms of value.
Ryan B.: So getting to the emotional side of running a company that didn’t take VC money in this round, I feel like you’re more relaxed. Is that because you know, you’re a little older, you’ve been through all this and the roller coaster, isn’t as steep or is it just that the company’s doing well and it’s, and it’s throwing off cash?
Ray King: I’m glad you think I look relaxed.
Ryan B.: Yeah, you do.
Ray King: Yeah, I actually do have some partners who put money in to to bid for .design in particular because that was heavily contested. We have done well since then. .Design has over 100,000 registrations. And with the other two TLDs, we are up over 150,000 registrations. Yeah.
Ryan B.: How did you, how’d you market Porkbun? I know some of it’s wholesale and some of it’s through Porkbun
Ray King: Let me separate the two. So on the registry side .design is just intrinsically a good extension. There are lots of different types of designers. So you have graphic designers, interior designers, um, furniture designers, jewelry designers, lighting designers, um, acoustic designers.
Ray King: There’s many, many different types of designers, all for whom .design makes sense. .design also works well at the end. So you would naturally say “Smith and Jones design it.” So it makes sense to say SmithJones.design, um, which is why it was heavily contested because many people understood this, but it’s the one that we really held out for and decided we wanted to purchase. In addition to that, we have gone to a ton of trade shows. So we’ll go to AIG, a, the American Institute of Graphic Artists or IDSA, the Industrial Design Society of America. They all have trade shows. We’ve sent a ton of mailers out to different types of designers. We’ve done videos, we’ve done podcasts. We’ve really tried to get the word out there as best as possible. We’ve also been lucky in that a lot of larger name companies use .design.
Ray King: So you can go, for example, to facebook.design or uber.design, amazon.design, airbnb.design and quite a few more. And you will see sites that are aimed at recruiting. You’ll see sites that house design assets. Uh, you’ll see sites that connect with design communities and also sites that are adjacent to it — like Facebook has another site, origami.design that helps them work with their app designers. So we’ve had a lot of exposure at that level as well. I think that’s why the registry side of the business is doing well. .Gay — we haven’t launched it yet but we’re going to launch in the beginning of next year. So that was a little bit involved in order to get it. So we think that that’ll be good. So that’s the registry side of the business. Yeah. Okay. And then on the, the retail side, which is the registrar, Porkbun, as I mentioned, we have a low cost strategy, which is great cause it gets people in the door. We also have a design strategy. We’ve put a lot of effort into the UX and our goal is to leave people with a great experience when they come to our site. I think we’ve achieved that because we’re later to the game. We’ve had the advantage of not having a bunch of legacy processes and code to have to worry about. So we’ve got just a really smooth user interface.
Ryan B.: And the name — do you have a restauranteur on your team?
Ray King: No, when you’re in this industry long enough you accumulate names and when you start a new business, you always go to your basket of names and say, “well, what name would you know would work?” And it was a toss up between Flyware and Porkbun. Um, and we just love porkbun. It’s cute and fun and the better name.
Ryan B.: I like it. Yeah. So, as we’re wrapping up here, is there any life moment that you haven’t shared with us or maybe expanding on one that you shared before where it’s not a surprise that you are where you are. Maybe something that happened to you along the way in your life? I always give this example, like when I was 18, I drove solo across country and worked at glacier national park. It was just this like massive independence thing that I realized I could do anything after that. And I just wonder, was there, is there a life moment for you that was like, okay, like this was pretty defining and it makes sense that I’m here in Portland, Oregon and that I’m an entrepreneur doing this.
Ray King: Yeah, that’s an interesting question. I think that growing up in Manhattan and being kind of a street kid. I would say the defining moment, if I could add an s to that where like getting out on the street and interfacing with the public. So even when I was five, I played my flute on the street and had a hat and collected coins and then we sold ice tea on the street. And then when I started the computer business, we put a stand and we had a computer and we’d just a stand in front of Grand Central Station and used electricity from the newspaper stand that was next to us, which made his light go off. But he loved the fact that we had a card table, and put an IBM PC on it and same idea, just talk to people on the street — “come, come look at this.”
Ray King: We had at first, VisiCalc, but then, eventually Multiplan and Lotus. But we showed people how to use spreadsheets. And at the time in ’83, ’84, ’85, no one had seen those. So you would just pop a spreadsheet open and you’d say, “Hey, I’m going to just put like the numbers one, two, and three on the screen, and then I’m gonna sum them. And so now it equals six.” And people are like, “wow, that’s really cool.” They’re like, oh, so it’s like an adding machine. I’m like, “wait, wait, wait. Now I’m going to change one of those numbers. And when you change a number and the total changes automatically on the screen”, people were just dying. Falling down dead.
Ryan B.: You’re like a magician.
Ray King: Exactly. It was so cool. It was new and people could just see the possibility. And there were tons of accountants and lawyers all the time coming through grand central station. So I would say the defining moment was just getting out there and being able to talk to total strangers and get them to share a little bit of what excites you.
Ryan B.: That’s awesome. I love these little insights into our past lives that help define who we are today. So thanks so much for being on the show, Ray. That’s awesome!
The author, Ryan Buchanan, is a social and for-profit entrepreneur who co-founded a pathway to leadership program for professionals of color called Emerging Leaders as well as founder + CEO of a data-driven, digital marketing agency, eROI.