December 11, 2014 in ATDC News, Blog

Picking right business name is important factor in startup strategy

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Rich Nailling, an Entrepreneur In Residence at ATDC.
Rich Nailling, an Entrepreneur In Residence at ATDC.

By Péralte C. Paul

When starting a company, an entrepreneur understandably spends a lot of time trying to build it around what she hopes is a great idea that the market will crave.

But what’s just as important as the idea the business is built on?

The name.

It’s not always at the top of a beginning entrepreneur’s list of priorities, but Rich Nailling, an Entrepreneur In Residence (EIR) at the Advanced Technology Development Center (ATDC), says it should be.

As an EIR, Nailling serves as advisor and guide to a select number of companies at ATDC, one of the nation’s leading technology startup incubators.

“Sometimes the entrepreneur has a cute or catchy name already in mind…or worse, something that’s based on their actual name or initials. Then there are those who think, ‘my idea is good and we’ll come up with a name at some other time,’” Nailling says. But these approaches are wrong, especially in the Internet age where an online presence and brand for any new business is a given. “The reason why it’s so important is immediately, when you launch a company, you’re a worldwide brand now.”

The tricky part for entrepreneurs, particularly ones in technology, is coming up with a name that tells target customers what their companies offer. But it can’t be so restrictive or specific to a company’s initial product offering that the name can’t grow along with the business.

“It’s a hard thing to do, because it’s not an exact science,” Nailling says. “This is the one thing that involves a combination of your vision, creative magic, and a little bit of luck, and it all comes together in a very unscientific way.”

In this edition of Tech Square Talk, Nailling discusses what entrepreneurs should consider in naming their companies and pitfalls to avoid.

Q: What are the questions entrepreneurs should ask themselves in coming up with the right name for their companies?

A: Do I feel good when I say it or hear it? Do I get a rush when I say it? Do I have to explain it to people? How is it going to translate to other media because it has to translate visually? Will the name scale as we grow? Is it too product-oriented or is it too trendy, or too small-sounding to grow? Will my employees be proud? Will my partners be comfortable with this name?

Q: What are the downsides to improper name selection?

A: If you have to constantly explain your name or the pronunciation of your name, it’s a hurdle and you want to avoid that. If you come up with a funny spelling or something that’s catchy, but doesn’t explain what you do, you end up having to spend time to explain what you do. You risk getting underestimated or misunderstood by potential partners or employees. You want to be building the brand simultaneously as you build the company.

Q: So then is there a difference between a company’s name and its brand?

A: They should be as integrated as possible.

Q: From a branding/marketing standpoint, is it more important to have a name that stands out or one that lets the target customer intuitively know what the startup offers to market? Are they mutually exclusive?

A: If you have a choice, you should have a descriptive name if possible — and it doesn’t have to be boring. The goal is to have a descriptive name that is also just a great name and flows off the tongue. It’s catchy but also describes what a company does. “Facebook” is a great example of a name that shows how it all comes together.

Q: When picking a name, what should companies do to go about it properly?

A: I do believe you should get your initial stakeholders together for initial brainstorming. You include your team, your employees, and partners because they are all important stakeholders and that’s where the initial magic can come in. Come up with a list of potential names, keeping the focus on making sure those names really help identify what the company is all about. Ultimately, the name you come up with really has to have enough headroom to accommodate all of the expectations of the company. That name really has to be expandable and grow with you.

Q: You mentioned potential business partners as one of the stakeholders. Why should they be part of the naming discussion?

A: Because you want to make sure the name you create is something they will be comfortable with. I had a company where I had potential distribution partners tell me I had to change the name to do business with them. I resisted and didn’t change it, but they were right. We should have changed it because the imagery of our name ran counter to their mission.

Q: Beyond the name of the company itself, how much attention should entrepreneurs give to the names of their specific products? Does it make sense for some sectors more than others?

A: That depends on the type of company it is. If it’s a product company selling lots of SKUs, they may need to do something like that, but the same principles apply. What does this name mean? What is it communicating to my stakeholders and my target customers? At last year’s SWSW Interactive, Gary Backaus [chief creative officer of Memphis-based archer>malmo] said it best when it comes to the thinking behind naming your company: “You don’t need a big idea for your name, you need a name for your big idea.”

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