Name Your #Startup

What is in a name?

Names are arbitrary labels. For example, whether you know Christina as Chrissy, Chris or Tina, she is still the same person.

My business career spans about three decades. During this time, my employees quite often bemoaned the fact that our respective business names did not adequately reflect/imply our products or services.

You have probably heard this before: “No-one knows who we are, or what we do.” Explained another way, one could suggest that a software business should be called “Software.”

This topic also arises when I consult, fund and/or advise startups. Often, entrepreneurs might delay a decision on a business name until they are able to dream up a really cool, profound and/or obvious one (i.e. a name that matches what they do).

Now, ironically, this exercise is nearly futile and mostly a waste of time. Generally speaking: you do want a startup name that is catchy, not too difficult to say, perhaps easy to remember, etc.

Think a little about successful companies that have been around for many years.

Occasionally a company’s name might tell you what business vertical they are in, e.g. Airbus (vs. Boeing). But the largest publicly traded corporation on the planet does not sell apples! The most iconic coffee chain may be Starbucks, and the largest hamburger chain, McDonald’s.

Now, think of more recent IPOs and successful startups. The names, Airbnb and Uber, probably do not tell you much about their type of business, products or services? But Fitbit, on the other hand, likely indicates a company whose business may relate to keeping fit/active?

My advice is not to fret over this too much.

Now, this last sentence above does not imply that you do not need to protect your intellectual property (“IP”). Nor does it imply that you can simply copy someone else’s IP in order to help your startup achieve ‘instant traction.’

You should familiarize yourself at a high level with trademarks and patents

Trademarks are relatively simple to register. You can start by checking to see if a trademark already exists. If no records can be found matching your proposed name, you should undertake the relatively simple task of filing a trademark application. It costs about $250 in the U.S., and filing a mark will afford you exclusive use of the word(s).

I am not going to discuss patents. But do some research to ensure that you understand relevant laws where you live, and whether you need to apply for patent protection.

Beware of patent and trademark trolls!

These are unscrupulous people who look for successful web properties (websites, blogs), product names, business names, etc. that are not protected. They make a living by filing patent or trademark applications for other people’s business/product names, most often without the originator’s upfront knowledge.

Then, as a next step, once the patent or trademark has been registered (which may take several months), these delightfully useless clowns will send a ‘cease and desist’ order, because they will now own the legal rights to your (business or product) name.

Or, they may try to sell ‘their new trademark’ to you at an exorbitant fee. If you decide not to pay a negotiated price acceptable to the seller, you will need to change your startup and/or product name. Think of this as perfectly legal extortion! You could oppose their application/claim but this will suck up your time, distract you from your business, and cost you money.

In closing: The business name is not overly important. A good idea, supported by some sweat equity, a great team, good timing, a little working cash, and some good luck… are all more critical success factors. Together, these are the proverbial startup gold.

Also read #Startup Science

But do remember that vampires and parasites will be circling as soon as you achieve any traction, start generating cash, and are seemingly enjoying some startup success. In a strange, counterintuitive manner, this unwanted attention could be viewed as a compliment for all your hard work, ingenuity and success achieved!

#Startup Science

Recently, I watched a Bill Gross (founder, Idealab) TED Talk on the factors that help make a startup successful, or otherwise. He shared some great insight on some of their many successes and failures. And he added references to companies that he had not ever been associated with.

I thought to share some of his thoughts, supported by own portfolio experience, in the hope that this will be useful to other entrepreneurs and self-employed business professionals.

Funding

Many startups seemingly fail because they could not secure a financing round. Actually, although often offered as a primary reason, funding is highly unlikely to be the primary reason for business failure.

This concept may seem somewhat counterintuitive: Startups may struggle to secure funding, but this is not the primary reason why they may not succeed. For example, many investors ignored Airbnb originally, when they embarked on a quest for funding.

Business Idea

Which brings us to the idea. Some founders think because they have a great idea, it will be easier to get funding.

However, sourcing an idea investor is rather difficult since most Venture Capitalists (VCs) and many Angel Investors may be looking for revenue, traction, run rate, revenue, scalability, etc., instead.

Many great startup ideas have failed, and several successful startups were not even really that great an idea. Not at the start anyway. Ideas, like the people who generate them, constantly evolve.

Your final product may not even have the slightest resemblance to your original idea. And that’s okay.

Business Model

No, a business model is not a requirement for success. Many successes, like YouTube, did not even have a business model at the start.

And anyway, your business model, much like your original startup idea, will also need to continuously evolve in order to accommodate shifting consumer preferences, fads, waves.

You can create the greatest business for compact disk distribution, but if no one is buying CDs, you will surely fail.

Team

This one crops up often. Most of the time, institutional investors (VCs) will want to consider past results and successes, the track records of the management team, etc.

They will want to assure themselves - before investing - that the exec team is a powerhouse that has done it before, and will be able to do it again! However, since most startups begin with one or two people, a great team may not be a recipe for success.

Timing

This seems to be most critical to startup success. Now, it would be remiss of me to claim that timing is everything, and the other factors above are of less importance. However, timing is critical, and good timing, essential.

But, you cannot control timing. And there are many factors entirely beyond your control.

Apple crushed Blackberry with impeccable timing. Consumers were ready for new smartphone technologies. At the time, Jim Balsillie, co-founder of Blackberry had famously said, “you don’t need an app for the Web.” While Blackberry was betting on a browser as the only app one would need, more than 300,000 apps were already available for the iPhone and iPad.

Sometimes, you cannot even control time to market timing. Development may take longer than anticipated; vendors in a supply chain may delay product launch; etc.

I briefly mentioned traction above. This can refer to a growing number of regular users (e.g. Facebook), regularity of existing client reorders (e.g. when selling a product to retailers), annual SaaS user license renewals (e.g. SalesForce).

For your startup to be successful, you need all of the above, hard work, luck, and really good timing!

For regular #startup tweets, follow me @rudibest on Twitter.