Choosing the company name is one of the most important strategic decisions in the life of a company. A SWOT analysis is used to analyze strategic decisions, particularly comparing with the competition. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.
Unless you do a SWOT analysis to examine your company strategy versus the competition, then you’re like the simple, trusting child walking through the dark woods and whistling to keep away the hobgoblins. Equally your company name analysis should check the SWOT implications.
Of course you should seek the ‘truth’ in your SWOT analysis. What defines the ‘truth’? It isn’t just your own view of the situation. Nor is it the view of your lawyer. The only view that counts is that of your current and potential customers. So you should be doing a customer-centricSWOT analysis of the company name.
Here we discuss a particular company name case study that illustrates the problems that can arise by not doing that SWOT analysis. Other well known names will also be cited as examples of weak practices. It’s surprising how the big guys can get it wrong.
A prior article, “For more sales, call your company Monday“, shows how two companies, that should have known better, seem to have got it wrong. It should be noted that the names are all household names, so despite their weaknesses they have worked. They were the lucky ones.
In some cases, it was not just luck but required energetic work by high-priced lawyers to correct for weak decisions that had been taken about the company names. The luck of these famous names does not justify you not doing a full evaluation of your company name. This is one of the most important decisions you will ever take in the life of your company.
For a start-up company, it may be the difference between make or break. So do it right and SWOT it. It will cost a lot less in the end.
Choosing A Company Name In The ‘Before Internet’ Era
[Disclaimer: The following is a fictional account based on publicly available information. It describes a possible series of events but is unlikely to be true in all respects. If the company involved feels there is serious misrepresentation or misinformation, then the author would be most willing to consider any appropriate modifications. Note also that all trademarks in this Newsletter are the property of their respective owners.]
Let’s first examine how it used to be done before the Internet became the pervasive force it is now. That’s not all that long ago. We’ll examine a company that has seen its share of ups and downs.
In April 1994 two friends, David Filo and Jerry Yang, were trying to decide what they should call their new company. They were very bright individuals and their minds were in high gear. They wanted to attract attention with something that was memorable.
One of them threw out a name that was provocative since it seemed to be the very reverse of what their company was all about. It could be seen as an acronym of what their company would be doing: “Yet Another Hierarchical Officious Oracle”. So Yahoo was born.
As with all parents of newborns, all sorts of emotions are quickly stirred. It’s your baby and no other baby has ever been quite as perfect as this. You check it with your friends. They’re very taken with it. Even your mother seems to find it cute! So we have a company name. Perhaps we should talk to a lawyer.
Aren’t there some important steps involved in claiming this name and preventing others from stealing it? Of course, you can usually name a company in a certain jurisdiction if there is no other company with the same name in that jurisdiction.
A more important barrier against others is to get the US Trademark if you operate in the US. So our friends ran into a problem right there. Yahoo was already a trademark: in fact it was several trademarks.
The Trademarks office had two applications on file going through the steps towards registration. One was for barbecue sauce (Published for Opposition January 11, 1994) and the other for canoes (Published for Opposition May 3, 1994). So back to the drawing board.
This company was too big to just be number 3 after barbecue sauce and canoes. Suddenly a brainwave. The name should be ‘Yahoo!‘ with an exclamation mark. It was possible to trademark this so the application was filed on May 25, 1995. If successful, the trademark ‘Yahoo!’ would apply for commerce in mouse pads and computer software.
Subsequently other trademarks were filed for, including the use of ‘Yahoo!’ for computer software for searching and retrieving information, sites, and other resources on computer networks on January 24, 1996. … and as they say, the rest is history.
In some ways, this is not a good case study. The products they developed were so successful that they could have called the company some made up word like Xerox or Sony and done equally well. However the name could have been better chosen. Let us examine how they might have done better.
How SWOT Might Have Been Applied for a Company Name Then
SWOT analysis is a very simple concept that is illustrated by the table below. In other words for your chosen market concept, you compare your own company name versus the competitors’ names for strengths, weaknesses, opportunities and threats. The table sets out the important elements in this approach when applied to the choice of a company name.
The first item, USP, stands for ‘Unique Selling Proposition‘. In other words this is why your products and services are better than those of any of the competitors for your target market niche. This is what makes your company stand out from the crowd. That’s a tall order for a company name but it can be done. Just think of two that come to mind.
If you’re thinking of toys for your children, then jumps instantly to mind. Or if you have to move some furniture to one of your friends, you know exactly how can help you. Yahoo! really fell down on that one.
It doesn’t do too well on some of the others either. It is memorable and is easily pronounceable. It certainly will not be confused with competing products. However originally it did mean a crude or brutish person. It was first coined by Jonathan Swift in Gulliver’s Travels where a Yahoo was a member of a race of brutes.
On the trademark issue either as an opportunity or threat, enough has already been said. Another issue to consider at that time was who could best help you in making decisions about company names. It’s largely connected with words so lawyers were natural experts when it came to the choice of a company name.
How The Internet Has Changed The World
That whole Yahoo name choice was really a ‘Before Internet‘ case study. Although their software worked through the Internet, the Internet in 1994 was not something that most people knew about. It was just a place where academics and scientists exchanged information.
Now a large proportion of the population regards the Internet as one of their main ways of staying in touch with their circle of contacts and of exploring what is available. It can truly be said that we all live now in an ‘After Internet’ world. It has been a rapid transition and the question of which year we passed from BI to AI is arguable. However we clearly are solidly in the ‘After Internet‘ era.
Associated with this transition is a phenomenon that is not often thought about. Before Internet, humans would look at different information sources to get informed. They used their eyes. Humans are particularly strong in seeing images and understanding what they mean. So we see an image like or and instantly a whole set of associations come to mind. Even the US Trademarks Office recognizes this by trademarking not only names but also designs. The Toys “R” Us logo name above is trademarked as a ‘Design Plus Words, Letters, And/Or Numbers’. In other words, the Trademarks Office is recognizing that what must be trademark protected is what is seen and recognized by a human being.
After Internet, much of the information that we humans see is served up for us by computers. However to a computer, or means very little in information terms unless you use some pretty powerful computing technology. What we humans see will probably have been chosen for us by computers who deal largely with information as expressed in characters.
This is a fundamental distinction that applies now in this ‘After Internet’ era. Remember also that computers are incredibly precise so they do exactly what they are requested to do. The precise spelling of the company name may have a very dramatic effect on what ranks high in a search for the company name. The second fundamental distinction is that the Internet is a global network. It does not just deal with what happens within a single country’s boundaries. National boundaries were an additional defence in the protection of company names in the ‘Before Internet’ era. This is no longer the case.
Applying SWOT In The ‘After Internet’ Era
The Internet is now the principal communication network. Visibility on the Internet is critical to a company’s success. If the competition is more visible, then they are likely to get a greater share of potential purchasers who are searching for a supplier. All the old issues on the company name are still important and relevant, but the Internet effect can be even more important than the traditional factors. An enlarged SWOT analysis in this ‘After Internet’ era must examine all the factors listed in the table below:
To help you do this more extended SWOT analysis, your best adviser or expert may no longer be your lawyer. The Internet side of the analysis is much more powerful than the traditional side of the analysis. You need someone skilled in Internet marketing who can handle both sides of the analysis. If we are being very precise, the company name we have been studying does not do very well by this analysis. Even Google inc. in its current SEC submission describes its competitor as Yahoo throughout rather than by its correct name. Nor does the name work exactly, since Yahoo! cannot buy the domain name directly corresponding to its name. ‘Yahoo!’ It’s ‘hard to spell’ in that most people get it wrong. Just try typing in the address www.yahoo!.com. Of course the address is not found. This is a typical problem for any company name with curious symbols in its name or even with accented letters.
Other examples of the problems that such names can cause were discussed in that prior article mentioned above, “For More Sales, Call Your Company Monday“. Using curious symbols or accented letters was somewhat acceptable ‘Before Internet’ but is poor now in the ‘After Internet’ era. Let’s return to our friends Toys “R” Us. In 1970 they trademarked a number of variants of ‘Toys “R” Us’, which is the company name. However it was only in 1999 that they trademarked the mark ‘Toys R Us’. They have never yet trademarked the term ‘ToysRUs’ although they do own the domain, toysrus.com.
That’s the key. Who “owns” the name on the Internet? If you own the name on the Internet, then owning the trademark or not becomes of secondary interest. Yahoo! Inc. by now “owns” the name yahoo on the Internet, even though they do not seem to own the trademark for this search software application. It’s even tougher for other companies who had the name Yahoo and are now invisible on the Internet.
Try a search on your favourite search engine for ‘Yahoo barbecue sauce’ or ‘Yahoo canoes’ and you will not find either of the companies who were selling those products back in 1994. These other companies were rendered invisible on the Internet as Yahoo! Inc. became synonymous with yahoo. Of course one important factor here was that the domain www.yahoo.com was owned by Yahoo! Inc.
So What If Your Company Name Is Weak
If your company name is weak, what are you to do? It’s tough medicine but the only way is to consider adopting a new company name. If the name has been used for some years, there is a natural reluctance to do so. However it’s almost a ‘no pain/all gain’ decision. Of course the new name is one that will clearly signal what the company does and will be one that can be “owned” on the Internet. In other words a search for the company name will produce a very short list, most or all of which relate to the company.
There is of course a cost in changing business cards and headed notepaper, but there is no pain versus existing customers. They will easily accept the name change. Where the gain comes is with potential customers who had never heard of the company before. The new name should have been selected to be particularly powerful in appealing to them.
In the very best outcome, with a weak company name you manage to sell it to someone else who can use it better. The trademark of Yahoo for barbecue sauce was assigned by Miss King’s Kitchens, Inc. to Yahoo! Inc. in December 1996. It is hoped that this was for some appropriate remuneration. As far as is known, Yahoo! Inc. has not yet brought out its own barbecue sauce.
In the ‘Before Internet’ era, although the company name was important, it sometimes did not get the attention it deserved. In the ‘After Internet’ era, the company name can be a key strategic factor in a company’s success. Like other key strategic elements it deserves a full SWOT analysis to ensure that the company name will perform well.
Owning your company name on the Internet is the single most important element in determining your company growth and success. Do a full name analysis to ensure you have the right name.
Photo credit: Courtesy of CCNY Libraries via photo pin cc
If you are interested in checking other articles in the series in their original format, follow these links: