I’m often asked to opine on potential names for companies, both at the formation stage and when they are considering a change of name, usually following a shift in focus. Having this morning read what Techcrunch described as the seminal post on the subject of choosing a company name which was written by VC Rich Barton in 2009 I thought I would share some thoughts.
Firstly a comment on how to go about choosing a name: Do it quickly!!
My experience across the naming of choosing the names for Reuters Venture Capital when we span out from Reuters and DFJ Esprit when we span out from Cazenove has cemented that advice in my mind. When it takes a long time to choose a name people form strong opinions and some of those people inevitably end up feeling disappointed and like their view hasn’t been taken account of. This is a particularly acute problem when potential names are shared with friends and family and it then becomes embarrassing to go back home and say ‘we chose that name that you thought was stupid, and we didn’t choose the one that you and I thought was great’. Additionally, thinking about choosing a name is a distraction from real business.
Further, whilst some names are better than others ultimately it is the product and execution which counts so prolonged deliberation in the hope of coming up with a perfect name is unlikely to be time well spent when the focus could be on other areas that create value more directly.
That said, there are some company names that are just obviously bad, and it is worth taking enough time to make sure you don’t end up with one of those. Bad names are the ones which make people wince or laugh when you test them out – watch out though – if you test with enough people you will get bad reactions eventually, often of a ‘it rhymes with something rude/inappropriate’ nature. Don’t be put off by one pseudo-funny put down.
Turning to the positive, I favour names which give a clue as to what the company does, but are not too literal. I think these sorts of names are the most memorable and getting people to remember the name of a company is one of the biggest challenges for cash strapped startups. From our portfolio healthy snacks service Graze.com and movie rental service lovefilm.com have both benefited from semi-literal names. Names that are too literal are somehow harder to remember (and I say that as someone who has to remember a lot of company names).
The counter argument as espoused by Rich Barton is that most of the best consumer brands have invented their own word. He argues that whilst building recognition for a new word company name takes a long time (Expedia took eight years to achieve unaided awareness over 50% in their target market) the early pain, and financial risk, is worth it if you really want to create a game changing brand as new words have a unique ability to define new categories – just look at Kleenex, Ebay, Nike, etc.
It may be right that inventing a word maximises the potential impact, but in my opinion it makes life more difficult in the early stages of a company’s life, and that is the time when success or failure really occurs, and it is worth sacrificing potential impact on the upside for an easier life early on.
Beyond that I would say keep the name short, avoid names that are difficult for people to spell, avoid names that give a misleading idea of the company’s product, and finally (obviously) have decent URLs and social media handles available.
UPDATE: As Neeta Patel pointed out in the comments it is also wise to make sure the name works in multiple languages.
SECOND UPDATE: taking from all the comments:
- People should be able to pronounce the name without fear of getting it wrong – thanks Harry
- Keep it short – 6-8 letters – Jason Calcanis advice, via Will Reeve
And check out the post from Calcanis (sort of) for a host of practical tips on choosing a name and getting a URL