Appraisals offer good qualitative analysis, but you’ll get a different answer every time.
Several people have mentioned a new automated domain appraisal tool to me this week.
Domain investor Howard Fellman created the appraisal tool at OceanfrontDomains using OpenAI.
Let me start by saying I like what Howard has put together. The prompts he created generate excellent qualitative analysis, including commentary on what makes a domain valuable, possible uses, and discussions about scarcity.
I also understand why people like it so much: it tells them what they want to hear when it comes to value.
Domain sellers gripe about automated appraisals that they believe undervalue their domains. Create an automated appraisal tool that tells people their domains are worth a lot, and they’ll say they love it.
The final value range the tool spits out usually includes a modifier, such as saying the domain could fetch a certain amount to a motivated end user or a funded startup. The final value for each domain I ran through the tool was indeed significantly higher than other appraisal tools. Unregistered domains received appraisals exceeding $5,000.
However, some issues may prevent the tool from being used directly to convince buyers of the domain’s value.
First, anyone who has used AI is aware that you receive a different response each time you interact with it. That’s certainly the case with the results you get from this tool.
If you tell a buyer to use the tool, it will pull up different sales comps, and the final number it spits out will likely be different from when you plugged the same domain in. (There’s no way to send a duplicate appraisal to someone.)
Other appraisal tools use formulas for valuations. While formulas can’t account for everything, they consistently yield the same result each time.
Second, I’m having a hard time verifying most of the sales comps. Few of them are in NameBio. When I asked ChatGPT to find a source for the domains not in NameBio, it can’t find any mention of them. When I can verify a comp, the date is often different from what the appraisal says.
It seems likely that OpenAI is hallucinating some of the sales comps. That’s a common problem with AI.
Howard is well aware of these limitations. The tool states:
This evaluation has been generated entirely by AI and is designed to demonstrate educational concepts comparing digital real estate to traditional property. It is not intended as an official appraisal nor as legal, financial, or investment advice. AI can make errors. It’s strongly advised to independently verify information, consult with qualified human experts, and conduct thorough research before making any decision or taking any actions based on this report.
Indeed. AI is very powerful but has its limitations.
My bottom line: this is a great new appraisal tool domain investors should check out, but they need to understand its limitations.
Can you interview Howard Fellman? Besides, his new appraisal service, he wrote a powerful rebuke of non-dotcoms years ago that has aged very well.
I will ask him. He does have an interesting background.
Much appreciated
A heartfelt and profuse thanks to you both for the very kind thought, JD and Andrew, but I’d prefer to not participate in podcasts or interviews at this time. Thanks for thinking of me, though. Truly honored. I will, however, continue to participate as a reader, listener and huge DNW cheerleader. In talks with a large player to resolve some of the very good points that Andrew mentioned regarding https://OceanfrontDomains.Com as its overall potential and benefit to the community has become clear.
Thanks to you both,
Howard Fellman
PS: Reminder to your readers, Andrew: please consider connecting with me on LinkedIn as I serve as a human bridge to connect domainers from throughout the globe, https://LinkedIn.com/in/PCProfessor
And one more thing for you too, Howard (see my other comments here):
There are so many selfish greedy conniving but also super intelligent, clever (and rich) bastards in the industry that they will more or less absolutely try to charm, fool and wine and dine you into ruining the service in their favor and for their agenda. So beware of that too.
The human condition is found in Jeremiah 17:9 in the Bible, among other parts. That is our lifelong issue and struggle, all of us. We have to address and deal with that in ourselves as much as and sometimes even more than with others. Words of wisdom to live by. Was very impressed with first try of your service, and not easily impressed, most especially by anything like that, which I would normally even hate or at least condemn.
Duly noted
Howard, in the age of social media, the audio/podcast is a great medium for sharing your perspective.
We need a greater variety of voices to be heard. DNW is a great archive of Domain community perspectives.
I hope you change your mind because your take on non-dotcom was notable and widely read.
I wrote a comment about this service in the thread over at TheDomains a little while ago and a reply to Michael Castello’s comment there about comment moderation, but my two main comments are stuck in moderation.
One more thing, Andrew:
“I also understand why people like it so much: it tells them what they want to hear when it comes to value.”
No, not even close, far too facile and simplistically cynical a take.
PS:
@Howard Fellman – don’t let statements like that cause you to ruin the app by inducing you to dishonestly compensate (whether you consciously realize it or not) in the other direction. Hope you see my comment at TheDomains if/when it appears.
Late Friday night – my comment about this service under the thread at TheDomains still not allowed to appear.
I’m shocked, shocked.
I well and truly agree with both of these paragraphs:
“Let me start by saying I like what Howard has put together. The prompts he created generate excellent qualitative analysis, including commentary on what makes a domain valuable, possible uses, and discussions about scarcity.
I also understand why people like it so much: it tells them what they want to hear when it comes to value.”