Domainer-developer’s business doesn’t pan out but it has a happy ending.

On DNW Podcast #163 in December, I chatted with Peter Askew about the businesses he had built on great domain names.

At the time, he was building a SaaS call tracking service on CallTracking.com, a domain he bought for $21,000.

The business didn’t work out as he planned, but this story has a happy ending: call tracking company CallRail bought his CallTracking.com domain name for $120,000.

While Peter has built a nice ecommerce business on VidaliaOnions.com and a directory business on DudeRanch.com, CallTracking.com was his first foray into a software as a service business.

There’s lots of competition in the space but Peter thought he could build a cheaper, simpler competitor. He ran into a few issues that he told DNW about over email.

“I determined that price wasn’t as much of a pain point as I had assumed,” he wrote. “It makes sense. Looking at myself, if I’m happy with a current provider for $30/mo, why would I risk that stability and relationship to save $10 or $15 a month? For a business, that price difference is irrelevant. Stability and relationship trump a small price savings.”

Peter also said the cost of customer acquisition was too high. He knew going in that Google CPCs for call tracking terms were about $130. But once he got started, he realized why competitors were taking outside money to grow their businesses.

And while Peter wanted to go it along both money-wise and employee-wise, he determined the business would require 5-10 employees to operate correctly.

Peter has some good takeaways from shutting down the business:

“If I build this type of product/service again, I need to pre-sell to 30-50 customers up-front, so that there’s revenue there once I launch. And I need to have a firm grasp on headcount needed to operate the service down the road. I was aware of Google CPC beforehand, but falsely assumed I’d be able to get some traction based on my stripped down version of call tracking SAAS.”

Fortunately, Peter had invested very little cash in the business. The $120,000 sale for the domain name (not the business/software), plus the business lessons he learned, are a very healthy return on investment.