How To Recover from a Huge Loss w/ Andrew Rosener

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1:29up and, you know, to introduce myself to Raj and, you know, shake his hand and say, hey, it's Andrew Rosner. He immediately remembered my name, gives me a big bear hug. And then he pushes me off and he shakes his finger at me. He goes, you should have taken the tokens. And so him and I go and sit down on the sofa and calculate how much money did I leave on the table? And it was$1.9 billion. $1.9 billion. Hi, everyone. Welcome to another edition of My Life in Four Trades. Joining me today is Andrew Rosner, founder and CEO of Media Options. Enjoy the conversation.

2:13Hi, Andrew. Welcome to My Life in Four Trades. Thank you very much, Maggie. I'm very glad to be here. Yeah, we're so glad to have you. So it's our tradition in this series, just sort of before we jump into the four trades, two of your best, two of your worst, to just get a little bit of an introduction, a little background. So where'd you grow up? What were your early years like? I've had an entrepreneurial spirit from day one, really. I was the guy out on the, we had a corner lot where I grew up and I was on the corner selling anything I could sell. My mom was a florist and so she would bring home plants and I'd sell plants on the weekends.

2:51I had lemonade stands and then I started lawn care business, you know, shoveling snow in the winter. And then as I got older and started getting real jobs, I mean, I've been a meter reader. I was a fishmonger. I was a, I was just telling my kids a list of the things that I've done. I was a butcher. I graduated early from high school. I was a very good student. I didn't, not to say that I'm particularly, you know, intelligent, but I didn't study much. I wasn't like a great student in terms of my discipline, But I did well in school. I went on to college, studied information systems. So it's sort of a hybrid between business.

3:36It was part of the business school, but it was a lot of computer science. And I started a software business in college in my senior year with a good friend of mine. we were building, you know, like database software for blue collar businesses. So he lived in East Hampton, Long Island, and we were, we built, you know, like a inventory management system. And, and I don't even remember all the things that we were tracking, uh, for like the largest landscaping business in, in Long Island and the largest pool company in, uh, Long Island. And, um, uh, what I realized was that was absolutely unequivocally what I didn't want to do with my life.

4:15And so, So I got a degree in something I knew that I didn't want to do with my life. And that was actually my segue into becoming a fishmonger. I started trading seafood commodities. So I wasn't shoveling fish, but I was sitting at a desk on a phone talking to people in Peru, China, Chile. How did you even know that was a business? How did you even know that existed? I had no idea. No, but this is kind of the common thread through my life is that I stumble into weird things. And then, um, you know, I get excited about them. And what I will say is that actually the seafood business taught me more than any other business I've ever been in.

4:52Um, including any of the businesses I have now that I've been running for 15 years. And, um, uh, it's just a very salt of the earth business. And, um, you, anything that can be done is done in that business from ways to get screwed to, you know, just very essential core business lessons that kind of get overlooked. And I think in the technology world and in sort of the fast paced world of, you know, other industries, and it's just also such an old industry. So anyways, it was an amazing experience. And then it was really directly from that business that I leapfrogged into, you know, my current businesses.

5:38So this is going to take us to your first trade. And I think this is kind of the pathway or the entree to where you are now, the domain business. And that was buying a domain name in 2002. Is it jamoniberico.com? Jamon Iberico. Jamon Iberico would be the Spanish pronunciation. You did it justice. As a true American would. I butchered it, but just enough for you to understand me. So set the scene for us for how you came to this domain name and what's happening in your life at the time. Like, where are you living? What are you working at the time? Again, I was in college, you know, studying at the emergence of the consumer Internet in the mid and late 90s.

6:24And so, you know, I remember this aha moment when, you know, a professor told us like, OK, you can put up this website and anybody in the world can then see what you put on the Internet. Somebody in China can see your website. And I just, it was like, wow, that's amazing. You know, that's powerful. And now, again, the utility of that was quite limited at the time. But I, you know, I'm hyperactive. And every time I have an idea, I would say, you know, as we said, I'm quite entrepreneurial. And so I'm going to start a business around that. And I would start registering domain names with the idea of I'm going to build this business.

7:00At that time, most things were take this real world thing and put it on the Internet in some form. Right. There wasn't a lot of like, oh, how can we do things differently because of this technology? Certainly, that's not the way I was thinking. There were some people thinking that way and they're now billionaires. But in no way, shape or form did I think about these as like speculative investments. I didn't think they had value. I didn't think of them as, you know, Internet real estate in the way that I do now. It was just the name that would be useful to put something on the internet, right? So you didn't really understand what you were.

7:40If you didn't think of them as real estate, you just somehow sensed that there would be something to this. I just knew it was step one. It was like, okay, if you want to be on the internet, step one was you needed a domain name in the same way that in the traditional economy, if you wanted to have a business, you needed a place of business. You needed either, you know, an office or a storefront, some kind of retail. And so it was just, this was step one. If you were going to have something on the internet, well, it started with a domain name. And, you know, to this day, one of our slogans is all roads lead to domain names.

8:12Because it doesn't matter what business you're in. If you're the pizza shop on the corner or you're Google, everything in between needs a domain name. And so it was just, okay, I have this idea. I might as well get that domain name. There was a sense of urgency of like, this is new and they're going to start getting taken in the same way that like Twitter launched. And it was like, OK, even if I'm not using Twitter, I should probably go get my name as a handle just in case for later. Right. And so but it wasn't it wasn't that I thought, oh, these are going to be really valuable. That concept didn't cross my mind until this domain name, the harmonibedico.com.

8:54And so this is, I think, 2001, maybe 2000, just after the dot-com bubble bursting. I'm in Mallorca, Spain with my now wife. And we, she introduced me to Jamón Ibérico, this pata negra ham, this black-footed pig, you know, that it grows in the northwest of Spain and in the north of Portugal. Very coveted. Very coveted. Very coveted. At that time, it was the most expensive meat in the world. And it was illegal, actually, when I subsequently found out, it was illegal to import it into the United States. So it wasn't sold in the United States until about 15 years ago. So anyways, I – or 17, 18 years ago.

9:40And so anyways, I tried this ham. I'm in the seafood business at that time. And I had just transitioned. I was very fresh in the seafood business. And I'm thinking to myself, wow, I can import seafood from Peru, China, Philippines, all over the world. I'm going to import this ham because nobody knows about this. And it's the best thing I've ever tasted. So subsequently find out that's not possible. And because of the FDA, it says it's unfit for human consumption like French cheese. And I, you know, just tucked it away like all the other domain names. A few years later, I'm driving to my office.

10:17I'm crossing the Newport Bridge. and I'm listening to NPR radio and George Bush Jr. is about to get the first Patanegra ham or jamone bedico ever imported into the United States. And I'm thinking, Oh man, you know, who managed to pull this off? So I got to my office and I start looking it up and I find the importer in Virginia and I called him up and I said, Hey, you know, congrats. You know, I tried to do this a few years ago. How'd you do it? And we kind of hit it off. I was in the food import business too. And so we were, you know, talking shop and, um, he tells me, you know, basically, he's, you know, I told him, I want to buy one of your hands.

10:56And he's like laughing at me. He's like, look, kid, you know, I'm sold out the next, you know, year for over a year. And, um, you know, there's 10 containers are sold out. And, uh, and, you know, I remember these are like 7 ,000 to$11 ,000 a leg for, for these hams. so uh anyway so you know basically the conversation over and somehow i don't remember exactly comes up that i own these domain names you know because i told them you know i tried to do it and these you know i could hear his proverbial jaw drop and i thought okay uh you know this is how much you want and i didn't have a clue right i didn't the concept of selling these things i think i'd heard that you know business.com had sold for seven million dollars or something i know other than that, I'd never heard about domain sales.

11:40And so I thought, what I want is one of those hams. And he goes, done. And I said, what I want it from the first container, George Bush's container. He goes, done. That was too easy. I said,$5 ,000. Done. And you're like, shit, I underpriced it. Yeah. Yeah. But I had no idea. I also had no idea how to transfer this thing, how a transaction should happen. How do I protect myself from fraud? And so I just said, I took him at his word. I said, all right, I transferred the domains on the phone. A couple of weeks later, I get a coffin in the mail, uh, you know, with this pig leg. And, uh, uh, again, you know, he sent me a case of wine, really good Rioja.

12:20He sent me, you know, a special carving knife, the big holder that you put the leg in. And so I spent the next month with my wife, you know, eating this, this, this, this, uh, literally pigging out. Yeah. And, uh, uh, it, That was my tipping point. And I thought, wow, if this guy in this tiny little esoteric niche market wanted these domains that bad, and he's willing to pay me with the equivalent of, let's say,$15 ,000 for it. Well, everybody in every business in the world is going to want these domains, and many of them are going to be worth a lot more. And I clearly undersold it. And so that's when I really went down the rabbit hole, so to speak.

12:59And I just started buying, it was like backing up the truck. But at that time, most of the good names were already gone. So I had a little basket of good domains, but not great. And so then I got introduced to the domain aftermarket, and it was a cluster. Like, you know, there was no, I mean, there's no liquidity. You have these, you know, really messed up auction systems, you know, with very thin liquidity, very thin markets. People putting crazy reserves. People are pricing these things by basically judging the wind. And nobody knows what they're worth. Hey, everyone. We're going to take a quick break right now to hear a word from our partners.

13:39We'll be right back.

13:45and so this is after the dot-com crash this is not that long after the bubble burst so there's also you know people who may have been participating or intermediaries are scared off because so many people got burned i mean it's a really painful time did people feel like you were crazy or did they say like why are you going in this when we just found out like the emperor has no clothes Totally. Totally. So like I had made a bunch of money, you know, not a bunch, but, you know, relatively for my age, making some money. I was early, you know, I was in the JetBlue IPO and I made a bunch of money while writing that one up.

14:19And, you know, my mom thought I was a protege and she's, you know, crying that I, you know, was basically I'd given up. No, I was like 23, 24 years old in the seafood business, basically running this company, took it from an$8 million company to$35 million. I was making, you know,$400 ,000 a year, you know, more than any of my peers. And, you know, I threw that to the wind, moved to Panama, and I'm running this domain business. My parents think I'm crazy. You know, like, anyways, the whole thing. And you're married now, right? Yeah. So is your wife like a risk taker too? I'm all in. That's great.

14:56Or she like, oh my God, there goes the house, the college education. It's all over. No, the absolute polar opposite. We are, we've been married for a very long time. And it works really well because we're actually quite opposite. We obviously share many things, but we're very opposite in many worlds. And so she keeps me grounded and I, you know, keep her dreaming. And I love that. I think that's a fair assessment. And, you know, at this point, you know, after a few years of successful, you know, domain trading, she sort of took the brakes off and was like, all right, you clearly know what you're doing.

15:38Just, you know, run with this thing. But we actually founded the business together. And but she definitely, you know, is far more constrained. And but luckily for me, more than her adversity to risk, she had an adversity living in America. And so this was one of the very few jobs, you know, that allowed me to, you know, just leave, you know, up and leave from the U.S. and move wherever we wanted to live, which was really high on her priority list. So what do you think you learned from that experience? is? Well, so I learned a lot of things that have carried over into every aspect of my life. So, you know, ultimately, I took that single domain sale and realized that there was this whole market, nascent market, that was basically fundamental and foundational to the entire digital economy that everybody could see or anybody that was paying attention could see was going to, you know, grow at an exponential pace.

16:43And so I would argue, and I do often, that buying great dot-com domain names in the 90s or early 2000s was essentially the best investment you could make to directionally bet on the growth of the internet. And, you know, basically, like, I was really early in Bitcoin. I was really early in NFTs. I was really early in, And, you know, I was an early Amazon investor, Apple investor. None of these things even come close to the returns from owning the, you know, foundational, the ground, really, the foundation of that digital economy, that digital real estate. It just, it went from, you know, basically free to being worth millions of dollars and in some cases, tens of millions of dollars.

17:36So, you know, basically, I learned a lot about being early. I learned that it is very lucrative to put yourself in the middle of an illiquid market. If you can find a market where people don't understand how to value the assets, there is a lot of delta to be made. There's a lot of margin in that, right? Right. Real estate. If you're a real estate broker, you can be an extremely successful real estate broker. And there are lots of them. It's very easy to be a media, you know, let's say moderately successful real estate broker just because the market's so large. But it's not a lot of, you know, variability in the margin.

18:23Right. It's like the house next door sells for X amount per square foot. The house next door is within, let's say, plus or minus 20 percent of that price. Right. Based on finishes. In the domain world, like literally, even to this day, there's only a handful of people that I would tell you actually understand fundamentally how to objectively value a domain name. And so this got me obsessed with illiquid markets and markets that people don't know how to value, which subsequently later led to my interest in Bitcoin. And also subsequently NFTs. Yeah, which we're going to get to. Yeah. So it basically stoked enthusiasm and a deep, let's say, academic interest in understanding how to value things, particularly things which are not liquid.

19:20Frontier, I'd say. Or frontier. Yeah, frontier markets. Absolutely. Absolutely. That's probably my biggest takeaway. Yeah.

19:32Yeah, that's so interesting. I think that's going to be so interesting to talk about it with your future trades. But let's jump to two. And that is, I'm going to combine, we're going to do Bitcoin. And I'm kind of combining two because it was your best trade, but worst trade as well. So it was your best trade in 2011 when you bought it, but became your worst trade in 2016 when you sold it. But I think that they're kind of one in the same. So let's start with your decision to go into it at all. How did this get on your radar? Was it because it was someone you knew or did you hear about the technology?

20:09How did you get introduced to it? Yeah, so pretty good story. I was at that time in Panama and a couple of things happened. So one, I'm running our domain brokerage. And today we're the largest domain brokerage firm in the world. And so we have a very wide range of clients. And most of our clients are really the best of the best. You know, most of the domains that we're selling are six and seven or eight figures. And so we're dealing with the best of the best in each of these businesses. And one of my clients at that time was one of the early developers of Bitcoin, not one of the creators, but one of the early developers.

20:50And I sold a domain for him for about 250 grand. and he called me up a couple weeks after. This was, I believe, October 2011. And he said, look, I am so grateful you sold this domain for me. I'm taking everything and I'm putting it into this thing called Bitcoin. And I'm buying some Bitcoin mining equipment and I'm just buying Bitcoin. And he said, this is going to be the future of money. This is a very important technological breakthrough. And I couldn't have done this without you. And so I really want you to get involved. And I said, oh, great. I have an extremely high propensity for risk table.

21:37I would say I take calculated risk, but I'm very open-minded. And you tell me, look, this is the future of money. Sure, let's get some. So anyways, then he says, well, the only way to get it is you've got to have this open source, download this open source wallet. And here we go. And so I'm like the least technological technologist that you'll ever meet. Right. So I'm like, OK, sorry, you lost me an open source wallet. And but, you know, I was intrigued and I started reading a little bit about it. And then at that time, you had a lot of the early Bitcoin guys coming down to Panama because Panama basically was saying, look, we don't know what Bitcoin is, but if you guys want to start up exchanges here, go for it.

22:23And so anyways, there was a lot actually happening. There was a lot of interesting people coming to Panama at that time for a variety of reasons. It was a really cool, interesting place to be. It was exciting. It was a lot of fun. So anyways, coincidentally, completely randomly, and that neighborhood where I lived, which is very small, three avenues by about 10 streets, was kind of the hub for all of these expats. So anyway, so I would go to these meetups and parties and I'd meet these guys. And, you know, I ended up becoming really good friends with one of the guys that used to work for Charlie Shrem.

22:59And he really is the one that took me down the rabbit hole, you know, more deeply and got me deeply intrigued and, you know, informed about what Bitcoin was and how it really worked. And he helped me to ultimately buy it in late 2011, early 2012. Well, and, you know, I think I bought, I don't know, about$5 ,000 worth and maybe a little more. And, you know, I had thousands of Bitcoin and, you know, basically forgot about it, right? It wasn't on the news. It was, you know, I was, you know, maintained some curiosity because of that environment. Ultimately, after about two or three years, those guys all left because Panama pulled the plug.

23:46Um, and so, you know, it wasn't in my face. And then like 2000, late 2014, early 15, Panama, uh, uh, uh, uh, you know, my friend calls me up and he says, Hey, do you still have that Bitcoin? And I said, I think so. I said, you know, but the only way I have it is if you know how to get it. I don't know. That's a good friend. I've got a client. He's got all these gold bars and he wants to trade the gold bars for Bitcoin. I said, gold bars for magical internet money. That sounds great. He's like, well, if you want, he'll buy all your Bitcoin and give you the gold. I said, all right. He came to my office and we figured out that he found that Bitcoin which was in my wife's account.

24:36He you know, ultimately traded all of the Bitcoin for a backpack of gold bars. And I just remember, like, literally looking at this gold and just thinking, like, I literally, I think I stared at it for about an hour. And, you know, I had held a gold coin before. And, you know, but this was just like a lot of gold. And I'm just like, what just happened? There was this magic internet money. I never even, you know, wasn't even really on my radar. I wasn't paying attention. It hit$700. And, you know, that was an amazing, seemingly an amazing trade. And then a couple weeks later, you know, I was happy as a pig in its own excrement.

25:23And a few weeks later, you know, Bitcoin hits$1 ,000. And the moment it hits$1 ,000, it's all over mainstream media. Everybody's talking about Bitcoin. And so I called my friend up and I said, hey, you told me to sell that Bitcoin. And all he says is buy more Bitcoin. And I'm like, oh. So I ended up getting back in at about$1 ,200,$1 ,300. And I bought a little bit. And then I bought some more at$1 ,500 and$1 ,800. And then I kept buying all the way up. But I never got back anywhere close to the number of coins that I had. that I traded for gold. Yeah. And I can tell you, as Michael Saylor says, Bitcoin was a better investment than the gold.

26:14That's the thing. It's not even that you sold the Bitcoin. It's like you got physical delivery of gold. Which is sort of, where is it? You still got that gold? Still got it. Sitting in a safe. Oh my goodness. So it's so hard. At the time though, it seemed like a really sage decision, right? to sell the Bitcoin. You know, it's actually a really interesting point. I think it's a really important point because most people, you know, I have the, I don't know, blessing, if you will, that I've been trading in digital assets for over 20 years, 25 years at this point, 26. And, you know, I've gotten used to it, but it used to keep me up at night that I had a lot of my wealth tied up in domain names.