brandI’m helping a startup who is planning on building a subscription web application as a service. They are still too small to have the right team, and they haven’t written a business plan or filled out a business model canvas, but they have been spending time on choosing a name, domain, and a logo.
In my opinion it seems a bit early to be wasting time on that, since so much will change by the time they write out a business plan. But it really got me wondering - when is the best time to choose a business name?
I already know how to choose a name, but are there any guidelines for when (along the startup life cycle) to choose one? What is the latest point at which a name should be chosen, and what are the pitfalls of choosing a name too soon or too late?
I would say, that the name of startup is an important thing because it makes the whole team to feel like the part of organization. Without name the startup feels only as a game - hobby and it becomes business once it gets it’s name.
So I would spend time to figure out the name after I decide to create business out of my idea. Usually that happens after initial research about the problem, market, current solutions, competition, initial talks with potential customers, possible business models.
After I learn all of the above then I can better choose the name.
It seems a waste to spend a lot of time on the name before initial research is done, because during research you can change your mind about everything.
What Startups, Rock Bands and Hedge Funds have in common?
That’s right: Their names matter - a lot!
Just for the sake of fun, lets imagine a Hedge Fund called Nickelback, a Band called Salesforce and a Startup called Bridgewater Pure Alpha.
It just seems weird, right?
Ok, but your question is not about HOW but WHEN.
Then let me try to list 3 reasons why a startup name should come early in the process:
Emotional Connection - Names, like good logos, can evoke strong passion for your brand. It make the users more propense to use, talk about it and recommend. Now guess who are the most important users in the planet? Yep, the founders (and employees)
Early changes - Maybe you will get it wrong and name your company with a terrible combination of letters. If you do this really early the damage will be minimum. If you take too long to fix it, you’re doomed. Just remember that Facebook once was called TheFacebook. Argh!
Get funding - I don’t know what you guys are building but I’m assuming you’ll need investment/support from Accelerators, VC firms or Business Partners. If you try to approach anyone of those without a really nice name your chances will be minimum.
Investors tend to invest a lot in gut and emotion. Generally many investors will make up their minds in 2.5 minutes whether they’ll write a check or not. The company name and one line pitch is about all you can fit into that time, so I think it’s actually fairly important.
But I see your point. If you guys have stopped working on the actual product, and are losing valuable time in unproductive brainstorming sessions, you should rethink your priorities.
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