HOW TO NAME A BUSINESS
By Joe Mancuso
Originally written 1985 - Updated
One of the most important tasks when
starting a small business occurs right at
the outset: giving the enterprise a name.
The name chosen will come to symbolize the
entire business and can be an early sign
of a company's character.
My fascination with naming companies
stems from the almost endless variety, cleverness
and useful information found in the name
people give their businesses. In fact, one
of my favorite pastimes when traveling to
other cities is to pick up the Yellow Pages
and start reading, just to see the inventive
(or uninventive) names that people have
given their companies. In fact, a fresh
set of Yellow Pages can often hold my attention
longer than a good novel.
I've even been known to show up late
for appointments because I lingered in a
building's lobby reading the floor directory.
And in the Hancock Building in Boston, or
the Empire State Building, that can be more
than a few minutes of interesting reading.
I classify the way people traditionally
name businesses into four broad groups.
They are, in reverse order of effectiveness,
Ego Trippers, Latent Ego Trippers, Nonsense
Names and Names That Work.
Ego Trippers are the people who name
a business after themselves because they
want fame; they want their businesses to
be the primary vehicle toward achieving
that fame. This is almost always disastrous,
and not just because the person's priorities
are mixed up.
Remember, a large percentage of entrepreneurial
ventures fail, and when your business contains
your name, your name fails too. Look at
Osborne Computer Corp. Although Adam Osborne
single-handedly invented the portable computer,
his name will always be associated with
failure. Of course, poor Martha Stewart
never realized that she would be going to
jail when she called it Martha Stewart Living.
She didn't realize “where she might be living”,
back in the beginning.
Another example is a product and not
a business, but it illustrates the danger
of ego tripping better than any I can think
of. It's the Edsel. Even if you don't remember
the car, you automatically associate the
name with failure because the Edsel -- named
for Henry Ford's son -- was one of the biggest
marketing failures in the history of American
business. When I met Edsel Ford II in the
mid1970s, before I'd finished shaking his
hand, the whole story flashed through my
mind. That's a pretty tough history to have
to carry around.
On the other hand, do you know who founded
General Motors? He owned control of it twice
before he died. In Flint Michigan, in the
basement of the General Motors building
is a Museum dedicated to a man who died
broke, William Durant.
So it's a good idea to isolate your name
from your business -- in much the same way
you protect personal assets by incorporating
your business. Also, on the chance that
your business goes bust, when your name
is on it, it's that much easier for the
creditors to look you up in the local telephone
directory and pester you at home.
The possibility of failure isn't the
only caveat against naming a business after
yourself. Success can be a problem too,
especially if you sell the business. A friend
of mine, Jim Pastoriza, started an electronics
company and named it Pastoriza's Electronics.
Simple enough. But when he sold the business
to Analog Devices, it became Analog's Pastoriza
When Jim started another company, which
he named Memodyne, the problems began. Even
though Memodyne was in another product area,
it was still in electronics, and it shared
a number of customers with Analog Devices.
So Jim wound up spending several unproductive
hours every week explaining to buyers that,
even though his name was Pastoriza, he had
nothing to do with Analog's Pastoriza Electronic
Division, that his company was Memodyne,
and that no, Memodyne was not a division
of Analog Devices. You can imagine the difficulties.
He didn't even have control of his own name.
Avis rent a car suffered the same fate.
After the founder sold Avis, he sued the
new owners to allow him use of his own name
in a similar business. He lost.
The Founder of Ray's pizza in Manhattan
had no idea that several dozen years later
there would be 26 different Ray's Pizza's
in the Manhattan yellow pages. The original
Rays, the only Rays, the best Rays, etc
now compete with a business that failed
to protect it's name.
Latent Ego Trippers
The second category, the Latent Ego Trippers,
know enough not to name the company after
themselves, but they can't help but want
to grab a little of the glory. So they name
the company after the street that they live
on, as Howard Freeman did with Jamesbury
Corp., which manufactures valves in Worcester,
Mass. Or they go with their wife's middle
name, the way Freeman's son Jack did when
he named his computer-oriented business
Stewart Systems. Names like these don't
really contribute anything to the business.
The all-purpose cleaner, Lestoil, was
named after the founders three children,
Lenore, Ester and Seymour. Then the Lexington
Mass., optical company, ITEK, was named
after “I will take over Eastman Kodak”.
The founder of now defunct discount stores,
Korvettes, was named after his high school
buddies…Eleven Jewish Korean War Veterans.
His name was Eugene Furkoff.
I'm reminded also of a reverse situation.
Al Battista named his company, which does
laser welding and dril1ing, Laser Inc.,
a name I thought might have been just a
little too simple. And since the company
is located near Sturbridge Village, Mass.
a lot of people pass by and see the sign
out in front of the plant. One of these
people happened to be a manager at Pratt
& Whitney, a division of United Technologies,
who was vacationing with his family. The
name piqued his interest and when he was
back at his office, he decided to find out
what kind of work Laser Inc. did. The result
was that Pratt & Whitney became Laser
Inc.'s biggest account. This would have
never happened if the company had been tagged
with a Latent Ego Tripper name.
The third category of names are Nonsense
Names, like the XYZ Corp. or Widget Inc.
Opinions are mixed on the effectiveness
of this kind of name. My opinion is that
naming a company is akin to naming a child
-- the name usually has to last forever,
so do it right the first time. Remember,
the name will probably be the first aspect
of the business to make an impression on
customers, suppliers, stockholders and employees,
and if it's a nonsense name, it may have
a negative effect. What is called in Texas,
On the other hand, Ira Bachrach, founder
of NameLab Inc., takes a different position.
And his four-person firm, located in San
Francisco, is in the business of naming
products and businesses and is best known
for coining the name Compaq for Compaq Computer
Corp., previously known as Gateway Technologies.
NameLab creates names by putting together
new words from morphemes, words or parts
of words that cannot be broken down into
smaller units. (There are 6,200 morphemes
in the English language.) The Compaq computer
was portable so it was important that they
come up with an overall name that conveyed
that. So they put "com" for computer
together with "pack," and added
the "q" suffix to establish a
proprietary trademark. The name, obviously,
was a success.
Another good choice was the name given
to a merger of many of New York's banks,
Citibank. It allowed the extension of the
name to Citicard, Citiloan, Citisavings,
Another theory on naming is the adaptive
metaphor, as in Apple. The way Apple Computer
got its name is a typical entrepreneur-in-a-hurry
story. Steve Jobs and Steve Wozniak were
looking for a name for the computer they'd
built, so Jobs decided one day that if no
one came up with anything better by five
o'clock, they'd call the company Apple.
And with little more than intuition, Mr.
Jobs revolutionized the computer industry.
Not only did he bring the first real personal
computer to the retail market, he brought
it to market with a name people could understand
and relate to. Before Apple, computer companies
seemed to think that all that was required
was a few numbers and initials and they
had a name for a new product.
Steve Jobs learned his lesson well in
the business he founded after Apple. He
eventually sold this business to Apple as
part of the deal, which returned him to
Apple. That company was called “NEXT”.
But a case like Apple is the exception,
not the rule. With most Names That Work,
there's a well thought-out strategy behind
them. Back in 1980, my brother John Mancusco
started a little engineering company in
Connecticut call Tremont Inc.-- not the
most exciting name in the world. But fortunately,
John's company was forced to change its
name as a part of a legal action initiated
by his previous employer, Transamerica.
So he changed the business's name to Equal
Inc., because so many of the engineering
blueprints that required the custom-designed,
electro-mechanical components specified
"'Transamerica or equal."
Moreover, Adam Osborne learned his lesson
on naming a business the second time around.
His new company, which manufactures low-cost
software, is called Paperback Software International.
The name is wonderfully descriptive; "Paperback"
connotes low cost and mass-market availability.
Some other business names that really
work in the favor of their businesses include
Ray Stata's Analog Devices, London Fog Raincoats
and John Hancock Insurance Co. What better
closing line can an insurance salesman have
than "Put your John Hancock right here"
when he hands a customer his policy?
CEO CLUB member, Jim Kimsey, was the
real founder of America On Line (AOL). It
was not the hero, Steve Case. Steve was
also a member of our CEO CLUB and has often
listed founder after his name. But the company
was originally called Quantum Computer when
Jim hired Steve to run it. Jim had the vision
to rename it AOL, just as it prepared for
Finally, the name you choose should say
something about the business you are in,
without being too generic. Let's say you're
in the dress business. You don't want to
give your company a name like "The
Dress Company" for two important reasons.
First, while a name like that tells people
what business you're in, it doesn't distinguish
you in any way from the rest of the industry.
And more importantly, even if you succeed
with a generic name, you'll have no legal
way of protecting it. If someone else wants
to trade on your name, you'll find that
the courts won't let you stop them. Even
though the specifics appear to be an infringement
on your rights, a name like "The Dress
Company" is simply too generic to be
protected. You can't own it.
-- Mr. Mancuso is founder and president
of the Chief Executive Officers' Club Inc.,
a New York-based not-for-profit educational
association of CEOs and entrepreneurs.