I’ve been asked by a number of people about naming startups since launching Holler.com, a name which to say the least, did not come cheaply. People have asked me everything from how to name a startup, to how much you should spend, to how important the name is. Ultimately, we each have our own theories on the topic, but I’ll take this opportunity to outline all of my own opinions on the subject.
The Importance Of A Name
There is no doubt in my mind that the name of a company is critical to its success. If Apple had gone by the name, Incredibly Beautiful Computers Inc., I’m not sure it would have performed as well (although a shortened IBC, probably could have worked). I have subjected my own businesses to an arbitrary rule: no name should be longer than three syllables. This has been based on my own review of the world’s largest brands, most of which fall within three syllables or less.
The goal of finding a “good” name is to make it as easy as possible for your customers to find your product, remember it’s name, and understand what you do with as little effort as possible.
What You Don’t Want In A Name
It’s easy as hell to come up with a name that you perceive to be clever but nobody understands. They either can’t spell it or its just not memorable. Ultimately there are plenty of things you can do to mess up a name but most of them are pretty common sense: - Don’t make it hard to remember - Don’t make it hard to spell - When you say it, you should know how to spell it. However I’ve seen this backfire somewhat as people have come to understand that not all internet sites are spelled properly. Flickr, del.icio.us, and many others have violated this rule and in turn, made their name somewhat more memorable. - Irrelevant names suck - If there’s one thing you want to avoid, it’s a name that has nothing to do with your business. Since most internet startups pivot before they figure out a successful business model, picking something that’s relatively generic is always a safe bet.
A Name Alone Is Nothing
Just like people who enjoy picking stocks like to think their model is best, entrepreneurs who invest heavily in a name believe the name is critical to the company’s success. Personally, I love having a powerful name. I spent tens of thousands of dollars on Holler.com. Was it worth it? Only time will tell. I remember that I was able to acquire AllFacebook.com for $10. At the end of the day, a price is not determinant of the value.
The effort you put in to building a brand around that name is what ends up determining its value. Clearly AllFacebook is also an exception as it takes advantage of an existing brand name. SocialTimes.com however was focused on its own name not related to any other company. From all the companies I’ve spoken to in the space, names have always been important for creating mass-consumer products, however the name alone was worth very little.
LivingSocial was called Hungry Machine LLC when they first brought in funding and they eventually switched their branding to build lasting value. For them, just like any other startup, execution is ultimately the most important thing. The name is simply one tool in the entrepreneur’s toolbox of brand building.
While I’m not going to broadcast the amount I spent on Holler.com, many people ask me about it on a regular basis. “How did you get Holler.com?!?!?”, they ask. The response is always the same: “I paid for it!” Depending on who you speak to, I got a good deal on the domain. Others, who have a long history with buying and selling domains may claim I paid too much (although I’ve only heard that from one person).
As Fred Wilson recently wrote, spending upwards of $50k on a domain is not unreasonable. That’s for startups that are VC funded. For all startups, the domain is a small part of their company’s story, but it’s definitely an important part. But how do you go about negotiating a domain? How do you get the best price? Here’s my list of tips in getting a great name:
Find A Name That Isn’t Taken
This is the most obvious one but most people don’t think it’s possible. How on earth can I secure a great domain name that hasn’t already been taken?!?!?! Believe it or not, there are plenty of names that haven’t been acquired. I regularly come up with business ideas and start brainstorming names only to find that there are actually a few legitimate names that are still available. Yes, the obvious names are gone, but there are still plenty of names to be had.
Honestly, for 99% of people, there is no reason to continue beyond this step. You are fooling yourself by believing that the name alone is going to be the answer to your problems. However if you have some cash to spend and you’re serious about building that killer brand, nobody’s here to stop you so continue on!
Ask For A Price
When you find a name that you can’t live without, you should feel comfortable asking the owner for the price. However, don’t give away your personal information. That means setting up a separate email account that you use just for domain negotiations. If you happen to be successful or simply someone who’s serious about building a business, you don’t want to give the domain owner any leverage in the negotiations. They want to sell their domain.
For the most part, if the domain is not one or two syllables and an english word, it doesn’t deserve a 5-figure price. The only exception to this rule is domain names that monetize well from SEO. NewLawnMower.com might be worth $20,000 because the domain generates a ton of affiliate revenue each month. While I doubt that’s the case for NewLawnMower.com, specifically, there’s plenty of domains out there that can convert on direct customers with no brand-value at all.
Let Them Know You Are Serious
Sometimes people will come around and try to pick up a domain for $50. There’s no way that will work on a premium domain name. However if you are willing to spend some money, let the seller know by making a legitimate offer. For a serious name, like Holler.com, or Flyer.com (random name but has a purpose), you need to at least offer a couple grand. However if the seller isn’t getting many offers, starting with a couple hundred won’t hurt you.
While you want to let the seller know you are serious, you also need to keep in mind that they aren’t getting offers every day (let alone every month). Just make sure that the seller knows your serious by either increasing your bid once after they reject your offer, or literally indicating that with your email inquiry.
Don’t Sound Desperate
If you really want the domain, make your offer and move on. If the person rejects the offer, wait a while to reply. There is rarely a need to rush a negotiation. The only person that wants to accelerate the negotiation is the seller as they’re the one who stands to gain something from the discussions in the short-term. They’re not in the business of building brands for the most part, they are in the business of selling digital assets.
They are here to sell you, not the other way around. Keep in mind that there are an unlimited number of words and phonetic combinations in the world and you do not need to attach yourself to one domain. You are the one in control of the conversation, not the seller.
Close The Deal Or Walk
You have the ultimate power: the ability to leave. When you are ready to negotiate a serious price on a domain, that seller wants nothing more than to close the sale. That’s because there are very few people in the world willing to spend tens of thousands of dollars on domains. $5k, $10k, or $50k … all are in a different league than the average domain buyer. If you don’t like the price, move on. If you feel comfortable: close the deal. After some back and forth, state the number you want firmly and then move on.
Wear Your Name Proudly
Hopefully after some luck, negotiations, or both, you’ve acquired a name that you feel proud of. It’s time to wear that name proudly as you are now your business. Your new name is your brand name and that’s pretty much what you should go by since you’ve invested so heavily in it :) Whether you want a t-shirt with the name, an email address with the domain, or anything else related to the name, it is your duty to own it proudly.
Now that you’ve gotten a name you have begun a much greater journey. For most people, they stop at the name and never get much further with their business. That’s because getting a name is actually one of the easiest parts in the grand scheme of things. Yes, coming up with a compelling name requires some creativity and thought, but let’s be honest, building a business requires an obscene amount of dedication, persistence, and luck.
If you’ve got a great name, you have a great start. Now it’s time to move on to the hard stuff! What are your thoughts on naming companies? Anything I missed?