Will Your Startup Do Better If It’s Easy To Pronounce?

My takeaway is a simple extrapolation: The easier it is to pronounce, spell, and remember your company’s name, the better off you are, especially at launch.

Arming The DonkeysI’m loving all the data coming out of behavioral science. It really does turn out we’re biased towards idiocy. Fortunately, by studying our biases we can keep ourselves from acting on them. A favorite source of fascinating and useful psychological insights is Dan Ariely,  Professor of Behavioral Economics at Duke University and author of two excellent books, The Upside of Irrationality, and Predictably Irrational. He’s also the host of a podcast series called, Arming the Donkeys. In this excerpt from an interview with Princeton University psychology professor Danny Oppenheimer, they discuss the findings of a study [pdf] where Danny’s team discovered that the difficulty of pronouncing a stock’s name predicted how it would do on its IPO. The area of inquiry is called fluency. Fluency is the property of a person or of a system that delivers information quickly and with expertise.

(Click arrow to play audio) Easy for you to say?

My takeaway is a simple extrapolation: The easier it is to pronounce, spell, and remember your company’s name, the better off you are, especially at launch.

How Much Of Marketing Is The Name?

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Jason Calacanis interviewed Jamie Siminoff recently on This Week In Startups.
When Jamie’s Simulscribe.com (phone message to email transcription service) changed their URL to
PhoneTag.com
, “…our sales tripled overnight and just kept going.”

JC “Why did you come up with the world’s worst domain name?”
JS “Well I was sort of a cowboy at the time and felt like, it doesn’t matter, the name – just get it out there and if it’s a good product…”
JC “You were wrong.”
JS “Oh I was totally wrong.”

Jason suggests that your name is 50% of your marketing.
Unsubscribe.com was owned by someone who had bought it as a kid in 1994. He had an emotional attachment to it. He’d had many offers for it. Why did he take Jamie’s?
(Click arrow to play audio) A name is a key foundational block to making a great business.

Is $2000 Too Much To Pay For A Great Startup Domain?

As an example to startups especially, I wanted to highlight this recent auction as an example of the kinds of domains that can be acquired for reasonable prices. If you’re getting ready to launch and are facing the difficult task of finding the right name consider enlisting my help. I know where and how to look for great names at reasonable prices.

I recently participated in a domain auction for the domain Penance.com. I actually have content that matches the domain perfectly. Previously I’ve hosted it on other URLs but I’ve been keeping my eye open for a better one. For my purposes you couldn’t have a better url than Penance.com, and with a ‘category killer’ domain like that it would be much easier to roll out more content in the event the idea started to get traction. But besides my (fun and basically no-profit) idea, Penance.com could make a great domain for all sorts of things (perfume, fashion, feature film title, etc. etc.) so, in my opinion, it would be a smart buy even as an investment- depending on the price.

I hopped in the auction, which was at Sedo. The domain was part of a collection being offered by a single domainer and all the domains were no or low reserve (meaning the owner was prepared to let them go for whatever the market priced them at).

Here’s what happened…

penance-Auction

Penance.com went for $2075, in my opinion a great price. A little over my head but a great deal for the new owner.
If you’re a developer I’m sure you see some obvious and interesting potential for the HockeyScore.com names.
Doodling.com strikes me as a good (not great) branding opportunity for an art related site or blog.
The point is, there are great domains out there for reasonable prices. If you could use a little help finding them, drop me a line.

My Rule Is Something You Can Spell

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Jason Calacanis & Steve Huffman

Steve Huffman, co-founder of Reddit and Hipmunk was recently the guest on This Week In Startups with Jason Calacanis. In this audio clip, Steve and Jason share their frustration with acquiring good dot coms and discuss their minimal criteria for choosing a domain. Funny that but for the random passing of a S. American tourist, Reddit might have ended up being called Read.ly or something worse. This is a great episode where Steve tells the story of how Reddit got made, and then sold. He was 22 when he and a co-founder sold Reddit to Conde Naste for a rumored $25M. You can check out the entire episode, with show notes, here.

(Click arrow to play audio clip) Steve Huffman My rule is something you can spell.

@Ev Paid $7500 for Twitter?

Tech Crunch ran a story today about Evan Williams paying $7500 for the Twitter domain name back in mid 2006. Thanks to tweets like these (@ev is the co-founder of Twitter he’s tweeting with Ed Shahzade @ed) people, are finally getting that it’s worth the money to acquire a good domain.

Tech Crunch ran a story today about Evan Williams paying $7500 for the Twitter domain name back in mid 2006. @ev is the co-founder of Twitter. He’s tweeting with Ed Shahzade @ed.

Evan Williams and Ed Shahzade Twitter Domain Thread
Evan Williams and Ed Shahzade Twitter Domain Thread

And  some Twitter history from LA Times.

Then when did the service’s name morph from “Status/Stat.us” to “twittr” to Twitter?

The working name was just “Status” for a while. It actually didn’t have a name. We were trying to name it, and mobile was a big aspect of the product early on … We liked the SMS aspect, and how you could update from anywhere and receive from anywhere.

We wanted to capture that in the name — we wanted to capture that feeling: the physical sensation that you’re buzzing your friend’s pocket. It’s like buzzing all over the world. So we did a bunch of name-storming, and we came up with the word “twitch,” because the phone kind of vibrates when it moves. But “twitch” is not a good product name because it doesn’t bring up the right imagery. So we looked in the dictionary for words around it, and we came across the word “twitter,” and it was just perfect. The definition was “a short burst of inconsequential information,” and “chirps from birds.” And that’s exactly what the product was.

Startup Social Proof Number One – Your Domain Name!

Marco used credit cards to put 30% down on a $36,000 domain name. Financed at 6%, he used Moniker’s escrow service to purchase Thumbtack.com – before he even had a product!

Marco used credit cards to put 30% down on a $36,000 domain name. Financed at 6%, he used Moniker’s escrow service to purchase Thumbtack.com – before he even had a product!
Jason Calacanis tells you why it was a smart move in this discussion with local services hub Thumbtack.com’s Marco Zappacosta.
Excerpt from This Week In Startups #68.
(Click arrow to play audio clip) Domains as Social Proof.

jason-calacanis-marco-zappacosta.jpg

Takeaways: People who know startups know domains well enough to have an idea of what you paid for it.
Save countless dollars and hours in branding/advertising costs by buying an easy-to-remember domain.
Some registrars (In this case Moniker) will finance your domain acquisition. If you’re not getting traction you can default on the purchase and only be out the down payment.

How We Acquired Groupon.com

Mixergy’s Andrew Warner recently interviewed Groupon’s Andrew Mason. This clip discusses how Groupon got Groupon.com.
Full interview with video and transcription can be found at Mixergy.
Andrew calls it ‘the perfect name’, but another fellow with a similar idea already owned Groupon.com. He didn’t want to sell it and he didn’t want to work together. Only later, after obtaining a trademark for ‘Groupon’, which extended to the domain owner’s home country of England, were they able to talk him into selling. Did they pay too much? Andrew doesn’t think so. It helps to remember that Groupon is now doing hundreds of millions in sales annually, but in the interview he states, “We bought it in May of 2009 or something like that, for maybe $250,000 dollars, which seemed like a lot at the time, but now seems cheap.”

(Click arrow to hear clip) How We Acquired Groupon.com

Is a Hyphen Worth $15,000 Dollars

Mixergy’s Andrew Warner recently interviewed Blank-Label.com‘s co-founder Danny Wong. This clip discusses Danny’s frustration with trying to acquire the domain BlankLabel.com
Full interview with video and transcription can be found at Mixergy. [Note: Danny was Skyping in from China so the audio clip is a little funky.]

Danny calls the owner of BlankLabel.com both a ‘squatter’ and an investor. Using the real estate analogy, a squatter would be someone living in a house someone else actually owns. The person who owned the house might be a ‘slum lord’ but nevertheless, anyone can see he’s holding the property as an investment.  So sure, in my opinion, the guy who registers Gooogle.com would be a squatter- looking to profit from someone else’s property, but the guy who owns BlankLabel.com (and 29,000 other dot coms) is an investor. The problem seems to be that when people’s passions around building a business are involved, they lose sight of the fact that domain names are simply another product a market grew up around. That some domains are available at registration price somehow allows people to imagine buying the domain they want at that price. Well, you can get a house in Detroit for next to nothing! It might have all the pipes and wiring ripped out, but the city is giving them away in hopes people will move in. That doesn’t make anyone think the house in Beverly Hills should be free does it?

(Click the arrow to hear the clip) Is a Hyphen Worth $15k?

PS $15k seems like a lot, but it’s all relative. IMO it would be worth maxing out a few credit cards or doing another round of friends and family to get the domain.

Naming Your Company – A Venture Capitalist Tells You How

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Mark Suster is a 2x entrepreneur turned Venture Capitalist. He joined GRP Partners in 2007 as a General Partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. He is also the host of This Week In Venture Capital, a new show on Jason Calacanis’s ThisWeekIn.com network of web shows. In the chat room recently I had the opportunity to post a question both he and his guest, fellow VC, David Travers spent a few minutes answering.

(Click arrow to play audio clip) Naming your company.

1. Choose a name that doesn’t box you into a corner. (i.e. As a startup your focus may change over time.)
2. Make sure your website matches your company name.
3. Is your name pronounceable in other languages.
4. Don’t pick a name that sounds like bunch of other companies, ie. don’t use the word ‘blue’ or ‘labs’ or ‘360’. (Or a word that ends with ‘ly’)
5. It does take some capital but for $10-15k (a lot of money for company with no funding, but once you’ve raised a little bit of seed capital) you can get a reasonable name.
6. The money you save marketing an easy to remember name will more than make up for the $10-15k you spend to buy the name.
7, If you’re using the hyphenated or the not exact match domain, expecting to purchase the parked version you really want later on, remember that the price will be correlated to your success.
8. You can make a deal with the domain owner. $5k plus 2% of the company.  Or a payment stream tied to success with installments towards an agreed upon price in the future. If you don’t pay the agreed upon amount by a certain time, the domain remains the sellers. Get creative.

Especially interesting to me is the idea of not naming your company too tightly around the focus of your initial startup intentions. I really like a name that is a close fit with a company’s product or service. It makes marketing easier and less expensive. Also it’s been shown that online ad campaigns are much more effective when the company/url matches what the person was searching for. Mark uses the example of a company he’s working with who purchased Bedrock.com. They also discuss the name WildFire.com. These are great names with obvious metaphoric significance that lend themselves to branding but also leave enough room for the company to shift focus if need be.

Naming Names – At $75k A Pop

Salon has a super-interesting article on the business of naming companies. It’s long and detailed with lots of quotes from main players in the industry. It’s a huge industry and people are charging a lot of money to help companies find that just right name for their business. At the end of the day they’re going to need a url.  You can find the article here: The Name Game by Ruth Shalit, but I want to share a few quotes to whet your appetite.

…eventually cost the client more than $1 million and involve up to 40 Landor executives around the globe. The first step was to interview key executives at the massive new entity, then known only by its code name of NewCo. After four months of this sort of intensive brand therapy, the group settled upon the only name capable of conveying such protean emotions — “Agilent.”

“The most namby-pamby, phonetically weak, light-in-its-shoes name in the entire history of naming,” declared Rick Bragdon, president of the naming firm Idiom. “It’s like a parody of a Landor name. It’s insipid. It’s ineptly rendered … It ought to be taken out back and shot.

“Steve Manning of A Hundred Monkeys, a San Francisco naming firm, was also appalled. “What a crummy name,” he says. “It sounds like a committee name. ‘Who’s your competition?’ ‘Lucent.’ ‘Well, we want to play off Lucent — only we’re agile. I mean, if you wanted a name like that, I could come up with that kind of name in about four seconds.”

Hey, those guys sound like they’ve been hanging out on the domain forums!
The Idiom url is actually idiomnaming.com! Idiom branding examples here: http://www.idiomnaming.com/credentials.html. A domainer at heart? Look where their hompage Idiom Naming Survey takes you: http://www.hugedomains.com HugeDomains.com, there’s a name for you. But where’s the survey?
A Hundred Monkeys at least owns their own domain and I do like a lot of these product names. A lot of their brand names leave everything up to the imagination, as far as what the company does, but as I’m beginning to understand, that’s often considered not a bad thing. I will definitely be checking out their website further. I want to know what people pay $65k for, and that’s before the domain name! (Well a few of the companies I checked had the domain name, but most were parked! What is this telling me?)

“I used to work by writing names on individual pieces of paper and sticking them up on the wall,” says Steve Manning of A Hundred Monkeys. “I don’t do that anymore.” The reason? “People were walking around the room with cameras, taking pictures of my names,” Manning says blearily. “It got a little creepy. I mean, this is Silicon Valley. People move around a lot … If they liked one of my names, they might be drawn to register it as a URL. And that would be very bad. Because, you know, I own those names.”

The monkeys don’t come cheap. “We charge $65,000 per name,” says Altman. “But we work with you for a month. And for that month, we are basically yours. It’s actually a much lower price point than many of our competitors.”

Consider Luxon Cara’s $70,000 “identity program” for US Air. The airline “wanted to be repositioned and perceived as a major U.S. airline…
“No, no,” Lagow says. “It’s been changed to US Airways.” “That’s it?” I asked.

If $70,000 seems like a hefty price for a word fragment, consider the chutzpah of Ira Bachrach. Several years ago, he charged Infiniti $75,000 for a single letter. Or, to be fair, two letters…
One model became the Infiniti J30, another the Q45.

Great article. I’m keeping a copy of it on my computer for the next time someone starts arguing about a $xxx price for what I know is a great domain name.

Homework:
Could a New Name Fix a Company?
From Inc, 1984! Name-Calling Feature on Ira Bachrach and Name Lab.
How Did The Blackberry Get Its Name
Feature on Lexicon (url Lexicon-Branding.com A hyphen! They do own the non-hyphenated).
From Wired: How do they come up with names like Pentium and AirTouch?

See also:
The Name Inspector
The Naming Group
Good Domain Names Grow Scarce Inc. Magazine