A Quick Market-Driven Guide to Choosing a ‘Profitable’ Start-Up Name

Originally published on http://www.appsterhq.com

And what ‘profit’ has to do with naming your startup

Facebook”, “Apple”, “Google”, “Uber” — what distinguishes the names of these ultra successful start-ups from the millions of other names nobody has ever heard of?

It turns out that there are some interesting market data behind the selection of an effective start-up name, data that can ultimately make the difference between a memorable and profitable name and one that is easily forgotten and valueless.

Before delving into the dos/don’ts involved in choosing an effective start-up name, let‘s take a look at why you should care about what you call your new company.

Why Care About the Name of Your Start-Up?

Here’s what it comes down to: the name you select will have a financial impact on your start-up.

If you knew that a decision you have to make would almost certainly have financial effects associated with it then you’d surely take that decision seriously, right?

Well, this is exactly what’s at stake when it comes to choosing a name for your start-up.

Is the name of your company the most financially important element of the entire start-up endeavour? Of course not.

Even the most memorable name will do little to bring you new clients and generate earnings if your company lacks a market-tested product that effectively responds to a monetizable customer pain.

Plus, it’s entirely possible that your start-up could be equally successful were you to use any one of a number of different (good!) names.

Having said that, your start-up’s name does have the potential to affect your profits to such an extent that it’s absolutely worth spending some time thinking about, and working hard, on it.

Adam Alter, Assistant Professor of Marketing and Psychology at New York University, Stern School of Business, insists that market reactions to business names are indeed real and significant.

Writing in The New Yorker magazine, Alter reports that research he co-conducted in 2006 reveals that companies with simple, easy-to-pronounce names typically experience a larger post-IPO (initial public offering) bump than start-ups with more complex and obscure names.

“The effect was strongest during the first few days of trading, when investors had little information about the stock’s fundamentals and were more likely to be swayed by extraneous factors”, he writes.

This supports the notion that before investors, clients, and others acquire a sound idea of the need for and strength of your actual product, other dynamics — such as the name of your start-up — will influence the impressions that people develop of your company.

And these initial impressions can indeed affect the confidence that investors, and the market more generally, will have in you.

Here are four practical ways to make sure you choose the right name for your startup.

Let’s start with the most obvious:

1. Keep It Simple

Whilst there are no set rules or fail-proof formula to choosing a name, there are some important guidelines that you should follow — guidelines based on the experiences of numerous successful entrepreneurs.

The first is the need to recognize that start-up names should be simple. And surprisingly, this is where some of our clients at Appster keep overcomplicating things.

Coming up with an impactful and valuable name for your start-up involves a delicate balance between putting enough time and energy into thinking seriously about the issue but not obsessing over the decision to the point where you end up choosing a needlessly complicated or obscure name.

Jonathan Nelson, founder of the start-up incubator Hackers/Founders, claims that new companies can sometimes create great names within as little as half an hour’s time.

More importantly, Nelson points out that many successful start-ups — including the majority of those from Y Combinator — use simple, one or two syllable words for their company names.

“These companies really try to have short memorable names. Even if you have to turn that name into something else and build a brand around it it’s usually worth it”.

One or two syllable words are crucial to coming up with a name that will stick in investors’ heads. “Nest”, a venture capital firm, is a good example of a catchy name that’s easy to say and pleasing to hear and, thus, also memorable.

A refined and simple but simultaneously striking and impressive name also says something about you as a founder. It shows that you have put a certain degree of professionalism, diligence, and honest thought into the image that you want to present of your company.

Why is this valuable? Because potential investors are likely to have a positive subconscious reaction to what they interpret to be an effective name, thus making them more inclined to associate traits of ingenuity, competence, and dedication with you, the creator.

The takeaway point: keep your business name as short as possible without being overly minimalistic or vague. The easier your name is to remember, the easier you will be too.

2. Keep It Practical

In addition to being simple, the name of your start-up needs to be practical.

In other words, there should be some kind of connection between what you call your company and what your company does.

This doesn’t mean that your name must explicitly reveal exactly what your start-up is all about but the name should be related in one way or another to your industry.

In general, the more crowded the field is in which you operate, the less risk you should take in terms of devising an overly complicated or oddball name that comes out of “left-field”.

Feedly” is a good example of a simple [✔], two-syllable [✔], and practical [✔] name.

It doesn’t directly explain what the business does but because the word “feed” is in the title it’s possible for investors and potential clients to determine the company’s essential activity (i.e., news aggregation for web browsers and mobile devices).

Careful though, placing too much emphasis on practicality can backfire on you.

For instance, Pocket started with “Read It Later” name. While this original name explicitly stated what the business does, i.e., allow users to store online articles to be read at a later time, the change to “Pocket” was arguably a better decision: it made the name less complicated and more applicable to a broader domain whilst still pointing toward what the company does.

3. Get the SEO Right

Getting your name right involves more than just speaking it and hearing it spoken aloud.

After all, your investors and customers — whether businesses or consumers — will read your name on a screen far more often than not.

To this end, take some time to think about how the word itself looks on-screen: is the name pleasing to look at or does it stand out as clunky or otherwise problematic?

Beyond this, it’s crucial that you get the SEO (search engine optimization) right for your start-up name.

First of all, it makes no sense to create a business name if you do not attach it to a corresponding domain name.

Google (and other popular search engines) like(s) to see consistency between domain names and the businesses discussed on the webpages connected to those domains.

(More generally, this need for consistency is why SEO plugins, such as Yoast, place so much emphasis on ensuring that keywords appear in the URL, the meta-data preview snippet, the headings, and the actual content of any new blog post/article).

Since Google plays a massive role in driving traffic to your website, enhancing the SEO for your business name is arguably your most important digital asset.

Paul Graham, venture capitalist and co-founder of Y Combinator, explicitly points out the importance of aligning your start-up name with your domain:

“If you have a…startup called X and you don’t have x.com, you should probably change your name. The reason is not just that people can’t find you. … The problem with not having the .com of your name is that it signals weakness. Unless you’re so big that your reputation precedes you, a marginal domain suggests you’re a marginal company”.

As proof, Graham notes: “100% of the 2015 top 20 YC companies by valuation had the .com of their name. 94% of the top 50 did too.”

Your digital properties are, thus, as crucial as your name itself: if you aren’t able to take full advantage of them then there’s no point in keeping your name. Sort out your SEO and bring in the traffic you deserve!

4. Don’t Become Emotionally (Over)Attached

I’ll keep this short and to the point.

One of the worst things you can do when trying to create an effective name for your start-up is become emotionally (over)attached to the name.

The more attached you become to the name, the less likely you are to change it when necessary.

Paul Graham explains:

“Imagine you’d called your company something else. If you had, surely you’d be just as attached to that name as you are to your current one. The idea of switching to your current name would seem repellent. There’s nothing intrinsically great about your current name. Nearly all your attachment to it comes from it being attached to you. … There are lots of other potential names that are as good or better; you just need to think of them”.

Bonus: What’s in a Bad Name?

If a good name is simple, practical, one or two syllables, easy to remember, and relevant to your industry then a bad name is the exact opposite of these qualities:

Overly complex, too many syllables, difficult to remember, and seemingly unconnected to what it is that your company actually does — AVOID ALL OF THIS.

Here are a couple of practical strategies to keep in mind:

  • Avoid using (or over-using) uncommon letters, such as “x” and “z”. These letters, especially when combined with other not-so-typical letters, will prevent your name from “rolling off the tongue”, thereby making your name more difficult to remember (as demonstrated by Alter’s research).
  • Avoid mindlessly piggybacking on popular trends. Explicitly copying or taking too much inspiration from current start-ups isn’t going to win you any favours. For instance, creating “Email Panda” to compete with MailChimp will make you (and your company!) seem bland, unoriginal, uninspiring, and lazy.


Identifying a really great startup name can be difficult and time-consuming work.

It requires effort, creativity, and knowledge of the various factors involved in coming up with a valuable name that sticks in the heads of investors and clients.

Picking a bad name is far easier and more damaging.

A poorly selected name is virtually guaranteed to cost your start-up precious resources, whether in investor dollars, client interest and excitement, market share, or in a variety of other ways.

To recap the four essential guidelines that founders should follow when trying to decide on names for their new companies:

  1. Keep the name simple (one or two syllables and easy to remember)
  2. Keep the name practical (create a connection between what you call your company and what your company does)
  3. Pay attention to SEO (associate your name with your domain)
  4. Do not become emotionally (over)attached (maintain a bias-free perspective and change the name when necessary)

Remember: you’re going to be living with the name of your company for years or even decades to come. You should spend more than a few measly minutes trying to come up with a name that’ll work– it’ll be worth the effort, trust me.

Originally published at http://www.appsterhq.com/
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