Some people dread it. Some obsess about it. Some simply want to be through with it. If you’ve ever done it yourself, you’d probably agree that the process of choosing a name for your company or brand tends to stir extreme emotions. But is a name really that important? After all, your clients and investors will surely appreciate your business for its products and services rather than its name. Right?
It is true that a cool moniker won’t help your business if what you have to offer doesn’t meet expectations. However, underestimating the importance of choosing a name for your company can sabotage the chances of its success. Let’s consider two examples of how choosing a name can influence the future of your company:
- A Good Name Can Captivate Investors – First, researchers have shown that a company’s name can positively or negatively affect the amount of funding it gets. In two studies - one which analyzed 131 crowd-funded projects and the other that looked into data from 1681 IPOs - companies with names that were easier to pronounce gathered more money from investors at both the early and the late stage of funding. In addition, unique names were shown to be more attractive to early-stage investors because they “create a perception of high novelty.” So, in the entrepreneurial context of startups and new businesses, the answer to the centuries-old question “What’s in a name?” seems pretty clear: money and funding.
- A Bad Name Can Alienate Your Customers – Now, even if a name proves popular with the investors at the early stages of a company’s growth, it can still get you in trouble with your target customer base later on. How so? Let’s use an example from the recent months. Monday.com is a company offering simple, visual project management tools and workplace collaboration services. This Israel-based business was named one of the most promising startups of 2017 and has recently raised $50 million in equity funding due to strong and consistent growth. Chances are, however, that the name monday.com doesn’t sound familiar to you yet because the company changed its name just a couple of months ago. Since its conception in 2014 until November 2017, the startup was known as dapulse. So why did the company’s management decide to go through the trouble of rebranding the startup? Surprisingly, one of the main reasons was that people would constantly make fun of the company’s name on Twitter! The lesson other entrepreneurs can learn from the dapulse naming mishap is that even if you’re offering a valuable product or service, you may end up losing clients if they can’t identify with your company’s name – a chilling lesson indeed.
From the two examples described above we can draw another important conclusion - while it is important that you like the name you choose for your company, whether a name is “good” or “bad” isn’t merely a matter of taste or personal preference. Clearly, some names are better than others. But what exactly makes a good name? Below, we offer 6 ideas that may help you come up with a great name for your fledgling business.
Find Your Identity First
Everyone knows the experience of going shopping without really knowing what you want to buy. Most of the time, you spend twice as much money as your budget allows on stuff that you probably don’t need. Choosing a name for your company can be similar. If you start the process without really knowing what it is exactly that you want the name to convey, chances are you’ll spend more time on it and won’t be satisfied with the ideas you’ll come up with. Of course, the name you end up choosing doesn’t have to encapsulate all that you want your company to stand for. However, if you start by identifying the core values, mission, and personality of your business, it will be easier both to brainstorm ideas and choose the right one in the end.
Settle for Simplicity
Try to think about some of the most successful companies and brands of the last decade. Which came to your mind most readily? You might have thought of Tesla, Uber, Airbnb, or Amazon. What do all of these companies’ names have in common? Even at first glance, they look short, easy to spell, and easy to remember. Of course, a huge part of the reason why these particular companies come to mind so easily is the success they achieved and the publicity they gained for it. But in the world of tweets, keywords, and Google searches, short names that are easy to say, hear, and spell can give your company a huge marketing advantage. And if you feel that simple means ordinary or boring, remember about the saying: “Simplicity is the ultimate sophistication.”
Unleash Your Creativity
Even though you want the name to be simple, you should avoid going to the other extreme and choosing one that sounds too generic. The advantages of selecting a unique name are many. First, unique names stand out. To customers, a brand that sounds original sends a strong message – you simply aren’t just like every other company out there. In addition, a new and unusual name won’t get buried in Google searches among all the generic keywords used by your competitors. And last but not least – registering an Internet domain for your website will be much easier if your company’s name is unique. On the other hand, if you choose a generic name, you’ll likely find that most (if not all) of the possible website addresses you can come up with have been taken since Myspace was the thing.
Inspire Positive Emotions
Think of the difference between the expressions “strong-willed” and “stubborn.” Their meanings are similar but the emotions they evoke couldn’t be more different. “Strong-willed” seems positive and commendable; “stubborn,” on the other hand, feels immature and unreasonable. This example shows that words convey much more than just their dictionary meaning. Rather, by the virtue of connotations and associations, they can cause certain emotional responses. If the name you choose for you company evokes positive emotions, it will be easier for your customers to identify with your brand. On the other hand, if the name can be associated with negative feelings or controversial attitudes, you may end up alienating people and losing clients. Of course, how you feel about any given name may be much different from how others will view it. Therefore, the question you should be asking really is: “How will others perceive this name?”
Don’t Overthink It
The process of finding a name will be different for every business. It may be your tendency to say, that was too easy! if you find your name quickly. Don’t overthink, second guess, or have expectations on how long the process should take. It will vary for each unique situation. Further, if you have an idea, ask some people. Choose a trusted group of friends and family to run your name ideas past. Remember, it will be subjective; everyone has a different opinion. But in general, you should be able to get a sense of what people like (or don’t like!).
Don’t Forget About the Legal Aspect
Words such as “Limited,” “Incorporated,” “Corporation,” or their contractions Ltd., Inc. or Corp, may be an important part of your company’s name, conveying to your customers and investors crucial information about the structure of your business. That’s why you can’t pick one of them based simply on your preference. Rather, the use of such words must truthfully reflect the legal identity of your company. For example, the titles Ltd., Inc. or Corp are reserved only for corporations. So if your business is registered as a sole proprietorship or partnership, you won’t be able to use any of these titles in the official name of your company.
After reading this, you may start to think that choosing a name for your company will require even more effort than you’d previously thought! However, remember challenging or not, selecting a good name will ultimately prove to be very rewarding – both for you personally and for your business. A good name can make it easier for you to get funding, attract customers, and market your brand. A bad name, on the other hand, can just as easily jeopardize the success of your company. So, take your time (if you need to), think about your company’s identity, and start brainstorming the ideas. In the end, whatever time and effort it may take, it will all be worth it once you come up with the name you truly love and can stand for.