Every business has a name, that’s quite obvious and we can all agree that you can’t have a nameless business. Where opinions divide usually is the importance that is given to a name. Over the last couple of years we have conducted numerous interviews with entrepreneurs sharing their brand name stories. We also launched a project dedicated to analyzing the top brands across the globe by different criteria and comparing what names and domains they chose for their brands. But ultimately naming a business and building a brand is a very personal journey and not many entrepreneurs share it (which is a shame really as it can really be great for PR!). This is why we find it valuable to share those thoughts and experiences whenever we come across them. A very open and honest article from James Currier, General Partner at NFX, caught my attention. If you are an entrepreneur at whatever stage of your business journey, I strongly recommend reading the full article – it is really worth your time. Here are some key takeaways.
A great company name can lift you up
I woke up to the power of company names when we screwed up my startup’s name in 1999. We called it Emode which in hindsight was hard to spell, impossible to remember, and a dated name within 24 months. With coaching, we changed it to Tickle. Traffic shot up 30%, journalists started writing about us, our ad spend became 20% more effective, and no one forgot our name.
When we were spending $2 Million a month on ads including radio and tv people would be like « what, what are they saying? », so they could never come to our website, there was no pull-through.James Currier, General Partner at NFX
What’s more, before the name change, we had an acquisition offer for $45M. Just four months after the name change, we received an offer for $110M. A name change started a series of changes in how the customers perceived and reacted to us, how investors and acquirers thought of us, and ultimately, how we thought about ourselves. The power of language increased our valuation by 2.5X.
With a newfound enlightenment, I saw a similar thing play out in the battle of the early search engines. I was an Associate at Battery Ventures when the firm invested in InfoSeek, the first U.S. search engine. InfoSeek rarely won attention from press or consumers even though they had the superior product. Simply put, Yahoo was orders of magnitude more interesting to talk about. And the numbers showed it. InfoSeek eventually sold for $72M and Yahoo reached a peak of $120B. It was then that I started writing a playbook for naming companies — in many cases, what we call things is equal to or more important than how we build them.
My Partner Pete Flint was the founder and CEO of Trulia. His largest competitor was Zillow. He has said that the Zillow name was better than Trulia’s, so his battle was always uphill. While Trulia merged with Zillow in a $3.5 billion transaction, Pete believes his odds of overtaking Zillow would have been even better had he chosen a stronger name.
The wrong company name can tear you down
You can destroy yourself with a bad name. In the case of Bodega last week, it appears the combination of their name, who the founders were, and the way they designed and positioned the product were all factors. It may or may not sink the company, but it sure has made it a lot harder for them.
Changing your company name is a huge lever and should be used more often than it is
50% of the early stage companies we work with at NFX choose to change their names after we invest. Why? First, because they’re shown the power of naming and how to rename. Second, as they change their businesses or target customers, it makes sense. Third, they want to give their teams a fresh start with a clarified mission, and a name change helps cement that shift with their teams.
You can choose a company name that elevates you, cripples you, or has no impact at all. So why not arm yourself with an advantage from the start?James Currier, General Partner at NFX