Whats in a Name

The bottom line answer is money. Choosing a suitable company name is the first test a firm has to pass when outsiders (who have nothing else to judge it by) come to size it up. It costs you the same amount to register a bad name as a good one. So you might as well choose a name that will make the product easier to sell, perhaps by explaining what it does, by adding credibility, or by making the product at home in other tongues.

For example, Microsoft is a carefully considered and created company name. When the company was founded in 1975 the name explained what the company did—they wrote software for microcomputers (the name PC didn't exist until IBM launched their Personal Computer six years later). This saved them valuable time explaining to customers what they did (there were only three employees when they started). It was also a good name by other yardsticks: It's short (three syllables is often considered tops), understandable, and acceptable internationally. There are no negative connotations and it's unique.

It is not uncommon for firms to take their founders surnames, such as Boeing, Norton, or Siebel to name three. Occasionally, it also works with two founders, such as Hewlett-Packard, but never more. This may assuage the vanity of the founder and reappraise him in the eyes of his or her mother-in-law, but it only works in marketing where the name of the founder is so inextricably associated with the product that the two are synonymous, such as Christian Dior and Ford.

Unless you are pioneering a program so unique that no competitor will dare copy you for years, or your name is unusually memorable, it's unlikely to bestow any distinctive advantage. It may even be a limitation when you want to diversify. The classic theory used to be that one used one's own name for the holding company and another name (or range of names) for one's products. Where the fiscal problems of administering the company are greater than the problems of selling its products, this division has practical advantages. For most software houses, however, it simply doubles the cost of education. First you have to explain who you are. Then you have to explain what your brand is. You are far better off making the name of the product the name of the company and exploiting it for all you and your backers are worth.

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