What’s in a name? A lot, so pick carefully
August 21, 2014
Looking for a name for his newly created small business, Aaron Sion landed upon "Crush."
It was short. It was punchy. It had impact.
Perfect, in short, for the rock band that Sion was putting together in 2009.
But Sion and his band mates Daniel Sion and Jimmy Dunn soon discovered a problem: "When you Googled 'Crush,' you couldn't find us," said the Reno musician.
Giving the matter some more thought, they changed one letter — "U" to "V" — and renamed the group "CRVSH."
It's magic — the group's YouTube video now lands on the top spot in a Google search, and Sion said the name is becoming widely recognized in the region.
Selection of a name for a new venture isn't a task to be undertaken casually, and both legal and marketing questions need to be addressed.
Entrepreneurs shouldn't hurry to select a name, said Flip Wright, executive vice president of strategy and innovation at The Glenn Group in Reno.
Rather, Wright said, folks starting up a business should place selection of a name fairly far down the list of brand-development decisions they need to make.
Instead, he suggests that the organizers of a new business first think through the elements of their brand strategy: What differentiates the company? What's its value proposition for customers? What feelings will the company evoke among its customers?
Branding, he explains, creates the business DNA that determines what the company is. Naming provides a way for the company to be identified.
It's sort of like the difference between a person's name and her DNA. The name identifies her as "Mary Jones." Her DNA creates who she is — short, brunette, rounded chin.
"Naming is about due diligence and long-term strategy," The Glenn Group executive said.
That due diligence generally benefit from an early visit with a lawyer knowledgeable in intellectual property questions, said Robert Ryan, an IP specialist with Holland & Hart in Reno.
It's important to understand very early, Ryan said, the sorts of names that lend themselves to trademark protection — and the sorts of names that are difficult to protect.
Easiest to protect? Completely made-up names — Xerox, for instance — or names such as Microsoft that suggest a picture of what the company does.
Once the team behind a startup has though through the brand strategy and has an overview of the legal issues, Wright said they can follow a variety of paths to develop a name:
• The commonly used "founder convention" in which the company is named for its owner — "Johnson Furniture," for instance. "It satisfies ego and it can be easy to protect," said Wright. "But it's not very descriptive."
• A descriptive name such as "Toys R Us." Audiences understand quickly what the business is about, Wright said, but descriptive names can be difficult to protect legally because many of them have been taken already.
• A completely fabricated name such as Xerox. These names are relatively easy to protect legally. Wright notes that they typically require a big communications push — lots of paid advertising — before consumers make the connection with the newly created word and the company. "But the name eventually will capture the brand equity," he said.
• A metaphorical name such as "Oracle" that isn't directly descriptive of the company but evokes the value of the brand. Those names need to be carefully selected, but they often are relatively easy to protect legally.
When Wright is working with clients on development of a name, they often come up with a preliminary list of five or six — taking care not to grow attached to any of them — for review by legal experts.
James Newman, a business lawyer with Holland & Hart, notes the initial creation of a business name is important only because the legal documents filed with the Nevada Secretary of State to create a new entity require some sort of name.
That paperwork can't be filed if the name already is taken. For the newly created business, the state filing provides legal protection against someone creating a Nevada entity with the same name.
Some entrepreneurs take the next step, paying a couple of hundred dollars to register a trademark with the Nevada Secretary of State.
Don't assume, Newman cautions, that this provides nationwide protection. It doesn't. For national protection, a filing with the U.S. Patent and Trademark Office is required.
(He notes, too, that some naming is easy: Professional corporations usually must include the names of the professionals.)
But others, Ryan said, take more work.
"Good marks take some creativity," he said. "Get some people in a room with some wine and some food and get them thinking about it."