Lee Semel

There’s a huge business scandal going on at domain registrar Registerfly, with stories of embezzlement, misappropriation of funds, and shareholders filing lawsuits against each other. One of the founders has allegedly used company funds for liposuction, high-priced escorts, a luxury condo in Miami, and a $6000 gecko.

In the meantime, their customers are caught in the middle, with no way to renew their expiring domains. Registerfly’s payment system simply takes the money and lets the domains get deleted. People are losing their livelihoods and businesses. Bob Parsons, CEO of GoDaddy, provides more details on his blog, as does the gripe site Registerflies.com, which logs the complaints of thousands of irate customers.

In January, I tried to renew a domain that was about to expire, and each time I submitted the renewal, I got a message back saying it failed, yet my credit card was charged. I have about 10 fraudulent charges on my card for a one year domain renewal. According to customer accounts, if you complain to Registerfly about this, they’ll seize your domains and lock you out of your account. It has since been revealed that risk/fraud department was being paid on a commission basis.

Now that my last domain that I care about is safely out of their system, I can provide some details on how I managed to rescue all my domains over the past week.

Registerfly was until recently a reseller of eNom, for .com, .net, and .org domains, and Tucows, for other extensions such as .tv. If you have domains at Registerfly, they are registered through either eNom, Tucows, or, if you registered or renewed in the past month or two, directly via Registefly. You can do a WHOIS lookup using DNSStuff.com to find out. If your domains are registered at eNom or Tucows, you will not be able to make any changes via the Registerfly interface, nor will you be able to get an authorization code allowing the transfer. You’ll need to contact eNom or Tucows directly.

• Registrations resold via Enom - If your domains are registered via eNom, their customer service department can take care of you. When I called up, after a 30-minute wait on hold, I was able to reach Josh in business development at eNom (email customersupport [at] enom.com, 425.274.4500) and by faxing him my identification to prove I owned the domains, he was able to push them out of Registerfly into Enom with in 24 hours. Once they are at eNom, you can change your contact information, unlock the domains, and transfer them to your preferred registrar. I found eNom to be very helpful and responsive, once I actually got to talk to someone.
• Registrations resold via Tucows - I also had some .tv domains registered via the OpenSRS system, which is run by Tucows. I was able to contact Paul Karkas, the compliance officer at Tucows (compliance [at] opensrs.org) who was able to unlock the domains and send me the authorization codes allowing me to transfer them away. I initiated a transfer with GoDaddy, but GoDaddy was failing to parse the email contacts for the .tv domains, but after calling up the customer service department and making contact with one of their Domain Transfer Concierges, they were able to do a manual lookup to verify the email address that was showing up in WHOIS.
• Domains registered directly through Registerfly - For the remaining domains registered at Registerfly, you need to use their interface to correct your contact information and unlock the domains. Registerfly’s interface apparently was non-working for several weeks, but in the past few days has started to work, but only for domains not registered through a reseller. If the domains are registered via eNom or Tucows, it will display a ‘Bad password’ error. For my domains, I first corrected all the contact information. For many of my domains, the administrative contact had mysteriously been changed to ‘glenn@registerfly.com’ Contact information changes should show up immediately in the DNS, or at least they were for me. If the changes do not appear, there’s a link on the DNSStuff WHOIS query result page that allows you to get a fresh copy of the WHOIS information. I was also able to unlock domains through the interface. If your domains show up as unlocked in the interface but locked in the DNS (as evidenced by the status ‘clientUpdateProhibited’ or ‘clientTransferProhibited’) try to first lock them in Registerfly, then unlock them again. Registerfly’s interface is completely out of sync with DNS, and this procedure causes it to resend the unlock command. The auth codes are also appearing, at the bottom of the contact info edit page for each domain. Keep in mind that the Registerfly interface was not working at all until a few days ago, and it could go down again at any time, so if you need to do this, do it right away.

I had to initiate and re-initiate the transfers through GoDaddy several times before they worked. Often GoDaddy can be stuck in ‘Pending Unlock or Hold Release’ state, simply because it doesn’t check DNS often enough to see that the domain is in fact unlocked. If your domain shows up as unlocked in WHOIS (’Domain status: ok’) you can simply re-initiate the transfer in GoDaddy, and the system will pick up the change.

Hopefully this info will help if you’ve got domains being held hostage by this dying company.

TechPresident is a blog that keeps track of the presidential candidates’ online campaign efforts. It discusses who’s effectively using the web, and automatically ranks them based on the number of MySpace friends. It’s interesting to see that candidates have started to purchase Google keywords, mostly their own names. But if they’re smart, they should start buying ads on ‘miserable failure’!

TechCrunch covers another online question & answer startup, Tinbag, which follows in the footsteps of many others that have failed to tackle this market, including Google.

In my experience, the best community for getting anything answered online is Ask Metafilter. Since it started around 1999, it has grown organically but not explosively, and now has several hundred new questions a day. It’s loaded with interesting questions and intelligent, thoughtful responses. The membership skews toward, smart, hip, tech-savvy people. This is the place where Adam Savage of Mythbusters asks fans for show ideas. But the questions cover all areas. Unlike recent Q&A startups, AskMeFi doesn’t charge you per post, and you can’t make any money by answering questions. Membership is $5, and like buying a gun, requires a one-week waiting period. The fee alone prevents a lot of spam and abuse, but it’s also due to the high degree of trust as well as community input through the MetaTalk forum.

AskMeFi is a great example of the value of governance that Fred Wilson talks about as being next on the value stack for technology businesses. Any startup could take this site and clone it, but it wouldn’t be the same. It’s the community and the governance, not the technology, that account for its success.

Should you outsource your development offshore? This is a question I get asked often both by entrepreneurs and consulting clients. Serial entrepreneur Darren Herman has an excellent post today on when to use internal and offshore development teams, and I’d like to add my own perspective. I’ve had great success outsourcing for projects large and small, but the success really depends on the specifics of the project, your ability to oversee it, and the quality of the offshore outsourcing firm. Ask yourself these questions before outsourcing a project:

Can this project be completely specified in a detailed design document? You need to prepare detailed use cases, wireframes, designs, and software specifications that the offshore firm can follow. Don’t outsource projects unless you know precisely what you want, upfront, down to the last detail. If your project is not the type that can be completely specified in writing, it’s not a good candidate for offshore outsourcing.

Do you have the knowledge to oversee software development? I’ve seen too many non-technical people try to outsource a project on their own, only to get useless, buggy garbage back because they don’t know how to evaluate the work provided. Make sure you have the expertise to review and test the work, or have a local CTO or technically-savvy project manager who can oversee the project on your behalf. If you’re a business guy and you can’t tell which offshore programmers are good, find a technical person to help you.

Is technology the key value driver of this project? Or just an enabler? If the technology or user experience is part of the core value that your project delivers, develop it locally. If the technology is just an enabler for some other business opportunity, it’s a good candidate for outsourcing.

If you’re in the software business itself, including all types of web-based software, technology is absolutely key to your product. You won’t see a 37signals or Fog Creek throwing a spec over to an offshore firm. Great software requires more than just implementation, it requires passion and craftsmanship. These can only come from a star programmer who’s fired up about your project.

You won’t get that when you outsource, because you’re basically hiring a body shop. You never really know who’ll be put on your project. Joel Spolsky makes many good points in his article Hitting the High Notes. Basically, he explains that the added quality a great programmer adds to your product greatly outweighs the added costs, because software (including web based software) can be distributed at next to zero marginal cost. It’s the same as hiring a star for a movie. Brad Pitt may cost millions of dollars, but he increases the movie’s appeal, and his cost is distributed over the millions of people who see the movie.

How often will the project change? If you’ll need to provide constant updates, whether to keep up with the competition in a startup environment, or to handle customer requests, develop locally. If your project doesn’t require constant iteration, and you can deal with longer development cycles, outsource it.

Are you innovating or merely implementing? To innovate quickly you need to iterate, experiment, and learn from your mistakes. Ideally you want the most talented software engineers, sitting in the same room with you, using an agile, iterative development process. You’ll also want them in touch with users, to get direct feedback that can influence product development. In these situations, local developers are a must.

What is the size and capabilities of the offshore firm? You can outsource to individual freelancers, small firms, or large consultancies. Will they provide comprehensive project management, or will you have to micromanage them? Do they have proven capabilities in the technologies and platforms you’re using, or are they just saying ‘yes’ to win your business? Does their pricing seem realistic, or is it unrealistically low?

Are there conflicting interests? Compared with passionate developers, a third party offshore consulting company will never be as committed or motivated to see your project succeed. They may have many other clients to satisfy, and billable hour quotas to fill. Any consulting firm makes money one of three ways: 1) by billing hourly, 2) by setting a fixed project price and executing the project for less than that price or 3) on change orders. If you’re on fixed price, there’s an incentive for them to do as little as possible to make the greatest profit, or to underbid and issue change order after change order once they have your business.

Make sure your interests are aligned by choosing the proper payment model. If your project is more open-ended, choose to pay hourly. If your project is extremely well defined, with a clear functional spec, user flows, wireframes and designs, choose fixed price. Don’t choose the lowest price. You won’t be doing yourself any favors by getting an unrealistically low bid. Go over your project with them to make sure they understand its true scope.

Once you answer these questions for yourself, the best way to find an offshore firm is to look on eLance, RentACoder.com, GetAFreelancer.com, or similar sites. Offer a small test project, such as coding a basic script, to a number of companies, and compare the quality of the results you get back, as well as the experience working with them. And if you decide not to go the offshore route, there are a number of niche job boards, such as 37signals, TechCrunch, or NextNY to help find the star that will help make your project rock.

A friend of mine, who shall remain nameless, was banned from advertising on Google. His egregious infraction consisted of accidentally linking his ad to a redirect, because he’d moved his site from one domain to another. In the meantime, Google’s been supporting websites that sell pirated movies, going so far as to assign them an account representative to suggest better keywords. These fraudsters spent more than $800,000 on Google ads. That’s a real double standard: banning the small guy for an honest mistake while actively supporting the big spender in their illicit activity. I expect better from Google.