Descriptive Business Names are Dead-end Names

There’s a great danger that you will outgrow a descriptive name.

The problem is that entrepreneurs don’t see business naming as a strategic activity. In the beginning, they just want to be identified with an industry or product category by adopting a name that describes their business. They do this without thought to the company’s future.

The last name change I was involved in would have cost the company – a regional construction supply business – around $50-thousand. Because of the expense, they opted to retain their name which identified them as a supplier of industrial staples. So their sales force must continue to explain to prospects that they can also supply re-bar, compressors, and generators even thought the company’s name just promises “staples”.

The solution is to not adopt a descriptive name. How could a company like Go-Daddy that began life selling domain names exclusively grow as rapidly as it has if their name had been ABC Domain Names, Inc.? The major players in hi-tech today have usually adopted coined word names, suggestive names or arbitrary names.

Those names types will require some getting used to by the company founders, and they will need to be promoted before they become household names. But this will pay off over time as they grow out of their original product/service niche.

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