How To Choose a Company Name, and Does Your Company Name Really Matter?

A friend of mine was launching a new product and thought he had the perfect name possible. It was short, memorable, had a funky spelling, and seemed to imply exactly what his company does. Seemed like a perfect name to him, so much so that he fell in love with it. When he tried to register the Domain Name, it was taken, and the owner said he would only sell it for $80,000. Now, this domain name had some branding value outside of my friends startup and if he wasn’t bootstrapping, I would recommend spending up to $2k for the name… But, $80k seemed outrageous. He asked for my advice, which to me was very obvious. Choose Another Name. He was too in love with his own creativity coming up with the name that he refused, and went on to trademark the name, and under the advice of his attorney was told he can take the domain away from the owner with WIPO arbitration for trademark violation. While I am not a trademark attorney, i have been around the domainer block for quite a while and am pretty positive that since the domain has some generic connotations, and since it wasn’t registered in bad faith as it was registered before the trademark was ever filed, but regardless of the outcome, the attorney would make his money on the lawsuit. I identified for my friend about a dozen other brandable names for his company, but he has his heart set on that name, and for better or worse will go down that route. While I think this particular entrepreneur is very likely to succeed because he is extremely persistent, never afraid to ask, and doesn’t get intimidated by heavy hitters, I wonder if his ego will get in his way. After all, here is an early indication it will cost him tens of thousands of dollars in wasteful spending when  he is a bootstrapped startup.

Another friend of mine is launching a Real Estate rental business and asked me for my advice about several names he chose. I told him not to waste too much time on the name. I said how people perceive you, and recognize could be as simple as using your name as the brand name… Just look at Corcoran Realty, or Keller Williams… Or lawfirms, accounting firms, etc…

So, how important is your company name, and how should you chose the best name possible..First, I want to say that your name is important, and there are elements you should think about when choosing your name… But you must realize that this is one small part of your business, and if you spend too much time on your brand name, you are wasting valuable time. The ideal brand name should not be generic. For example, I used to work for Outreach Center, which was a car donation charity. Whenever anyone asked me who I worked for I said Outreach Center, and they are like what do they do, and I said they are a Car Donation Charity, and they said, “Oh,  You Work For Kars4Kids?” The guys with the insufferable radio jingle?!” This drove me crazy because they were a competitor.

When thinking about a Brand Name, you have to think about the purpose of a name. The purpose is for your customers to identify who you are, tell their friends about you, and give them something to “hang Their Hat On” when thinking about and discussing your company. Using a generic name cannot work because the words mean something else already. The human mind is like wet cement, and once someone associates a word with something, it is firm in place and very confusing for the person to associate that name with something else. So, the first thing about a name is that it should be something Unique that Doesn’t mean anything to that person within your category. A brand like Apple can work because it is not a fruit brand, but a computer brand. So, within that category it is unique. A brand like Outreach Center, in the charity category is generic. Most charities do outreach, and there are so many types of outreach out there that when people hear the name, it cannot be associated with a company easily.

The next important factor in a brand name is that it is easy to pronounce and spell. Assume that most customers will hear about you verbally from satisfied customers, or media, etc… Most companies are discovered from HEARING about it… So if it’s hard to pronounce, people wont discuss it. If it’s hard to understand when heard, people wont know it, and if it’s hard to spell, when they hear about it, they won’t know how to find you.

So, while a brand name like Groupon is amazing because it is a combination of two words, and it’s unique, and its easy to spell and pronounce, it is hardly necessary to succeed. Gilt group would probably be bigger if you could spell gilt properly. Living Social would probably be bigger if it wasn’t generic. But, Groupon, that has all the pieces in place to succeed.

Since you probably won’t come up with a name like groupon, and you need name that works, my advice would be to spend a few minutes thinking of ideas, but realize creativity and such are not going to build a name like Disney. Walt Disney just used his last name… So why don’t you?!

I will write more about choosing a brand name, and if you want a clever one, how to approach it, but realize that you have the perfect name  right under your nose at all times, so why not use that instead of spending $80,000 on a domain name?!