ADVFN. Interactive Investor, MoneyAM, Motley Fool, t1ps.com. Financial website entrepreneurs don’t seem to be very good at choosing names. In the rush of founding a company, they probably don’t have time to think calmly about choosing the name. This post does some of the thinking for them. It is not really an investment post, except insofar as a start-up with a good name may have a slightly better chance of success than one with a poor name.
CRITERIA FOR COMPANY NAMES: “SUMPIER”
A good company or product name should be SUMPIER: Short, Unique, Memorable, Phonetic, Inoffensive, Euphonious and Resonant.
The first four criteria SUMP make the name easy.
Short A short name facilitates word-of-mouth marketing, forestalls unwanted abbreviations (see next point) and generally increases salience. Three or four syllables are good; two are probably better.
Unique A name should to be unique in two senses: clearly different from all relevant rivals, and not susceptible to unwanted variants, abbreviations or acronyms. Checks on the first should include a trademark search. Checks on the second are less easily systematised. One can quickly rule out rule out Celtic Region Aluminium Products or New United Trading Services, but some variants are not so easily anticipated (see the anecdote about Exxon below).
Memorable This helps salience and word-of-mouth marketing. Memorability is a know-it-when-I-see-it property, but one useful device is alliteration. Toys for Tots, not Toys for Young Children; Leaping Lizards, not Jumping Reptiles.
Phonetic A name is phonetic if spelling and pronunciation are mutually implicative. A person who first sees the name in print should be immediately able to say it out loud; a person who first hears the name in speech should be immediately able to write it down. Motley Fool is phonetic; ADVFN and t1ps.com are not. Odd spellings, capitalisation and even punctuation are quite common nowadays (del.icio.us, Flickr, Tumblr…), but a phonetic name is always more effective.
The next two criteria – the IE of SUMPIER – make the name pleasant.
Inoffensive A name should have no unhelpful associations for product or the target customers, either in English or any other relevant language. Note that this “technical” definition of “inoffensive” does not necessarily exclude risqué names – it depends on the target customers. There are many risqué names, but also many indications of difficulties with them; I suspect that for most products this game of “niche appeal through offence” isn’t worth the candle. Under this “technical” definition, most of the financial website names are OK, but Motley Fool is offensive. (Yes, I know the etymology: the founders were English majors with a penchant for witty Shakespearian allusions. But I don’t care; I still think the name is weak).
Inoffensiveness can be hard to verify. When Esso and related companies became Exxon in 1973, the new name had been chosen from computer-generated sequences of letters and exhaustively verified as inoffensive in dozens of languages. Within days Exxon had acquired an alternative moniker throughout the oil industry: the double-cross company.
Euphonious A name should sound pleasant – or at least, not unpleasant. It should be easy to answer the telephone. Motley Fool is euphonious; ADVFN is not.
The final criterion of resonance – the R of SUMPIER – makes the name effective. This criterion is more subtle than all those above, and distinguishes great names from merely good ones.
Resonant A name should resonate with – that is describe, evoke or emphasise – either or both of:
(a) the benefits of the generic category (product resonance)
(b) the comparative advantages of your specific offering (brand resonance).
Resonance can come either from the name’s literal meaning (denotation) or associations (connotation).
Some examples of names with product resonance: eBay, Match, Rightmove, Twitter, uSwitch, Youtube. Some examples of names with brand resonance: Betfair, Costco, Dulux, Easyjet, Topshop, Valu-mart. As these examples show, product resonance tends to be more important when a company is creating an entirely new category, and brand resonance when a company is entering an existing category. None of the financial website names has either type of resonance.
The ideal is to have both product and brand resonance in one short name, but this is almost unachievable (I find it hard to think of examples, although perhaps Betfair is close). More achievably, a name with product resonance can be supported by a strap-line or slogan with brand resonance, and vice versa.
EVALUATING FINANCIAL WEBSITE NAMES
For financial websites, the following table evaluates some extant names against these criteria, and also some hypothetical names (tick = positive, X = negative, ~ = neutral or hard to say)
Morphological versatility For some products or (especially) services, it helps for the name to satisfy most of the earlier criteria (unambiguous, phonetic, euphonious etc) when used as a verb. The dominant search engine got this right (“I Googled him”); the ones which fell by the wayside didn’t (I AltaVista’d him”? “I AskJeeves’d him?”). Other morphological variations can sometimes be anticipated e.g. to describe a user of the product or service (“eBayer” for users of eBay works; “tumblrer” for users of tumblr doesn’t.)
Category name versus brand name The category name is the generic description; the brand name (protected by trademarking) is your specific product. Generally you want these to be clearly different; and so if your product is entirely novel, you may need to invent a distinct category name. Vacuum cleaner – Hoover; personal organiser – Filofax; betting exchange – Betfair.
If you don’t create a distinct category name, customers may create one you don’t like; and your own brand name is at risk of being corrupted by customers to encompass competitor products (irrespective of the formal niceties of trademarking). Obvious exception: if you are a latecomer copycat, you may prefer the dominant brand name to be corrupted this way.
Narrow versus broad names A narrow name alluding to the company’s initial product or geographical location may give good initial resonance, but also act as an obstacle to later expansion. Think carefully before being too specific.
Domain names The discussion above assumed a unique and hence new name, for which a corresponding domain is likely to be available; but obviously this needs to be checked. Any similar domains (for example slight misspellings of the name) also need to be checked (and acquired, before somebody else does).
Book names Similar criteria can be applied to choosing book titles. I think the title Free Capital satisfies the criteria above, except for one drawback: it isn’t resonant – or even comprehensible – until after you’ve read the book. Hence the sub-title How 12 private investors made millions in the stock market, which I hope gives some prospective resonance.
Finally, I acknowledge that some companies do succeed despite poor names against the above critieria. Yahoo!, GoDaddy, Digg … these all seem to me to have no resonance, and foolishly indulgent spelling, capitalisation or punctuation. But a poor name makes life unnecessarily difficult. Why not try to get it right?