– Mark Prus, Principal, NameFlash

There was an article this summer in the Wall Street Journal called, “Why Startups Are Sporting Increasingly Quirky Names.” The author indicated that this trend was being driven by a “lack of short, recognizable URLs” which “prompts use of misspellings and word mash-ups” in the names of new startups.

One of the entrepreneurs was congratulating himself because he “wrote an algorithm to generate all the pronounceable combinations of letters, three syllables or fewer, whose dot-com addresses weren’t claimed” and he used that approach to come up with the name “Kaggle.”

Now I’m not knocking the success he’s had in raising money for his startup, but I ask you, what does Kaggle mean and how does it relate to the concept of his business?

This is just another example of an entrepreneur using tactics instead of strategy. He was concerned about getting a cheap, clean domain name (tactic) instead of developing a great name for his product/service by following a strategic approach to name development (strategy), then worrying about the domain name (tactic).

Most professional name developers follow a strategic process to develop a name. This process varies depending on the company, but in general there is a competitive analysis, a target consumer exploration, a brand positioning exercise, and other strategic steps that lead to a considered name for a business. There are also numerous rounds of availability checks using trademark experts, and part of this is usually a domain name check.

But starting at the end of the process and letting available domain names drive the name development is letting the tail wag the dog (or insert your favorite saying for “this is dumb”). Getting a clean domain name for around $10 a year is certainly a good thing. But getting the right name for your business is potentially a multi-million dollar decision. Talk about pennywise and pound foolish (again, insert your favorite saying for “this is dumb”)!

As an example, one of the things I try to do for clients is leverage the power of familiarity and fluency in names I develop because customers tend to do a better job of recalling and liking names that are easy to pronounce and that are familiar. This approach has been scientifically proven to work, as evidenced by the results in the article “Predicting short-term stock fluctuations by using processing fluency,” by Adam L. Alter and David Oppenheimer. They proved that fluently named stocks robustly outperformed stocks with disfluent names. Or said in English, people vastly prefer names that are familiar and easy to pronounce and are willing to put their money behind that decision.

If you want more proof that familiar and easy-to-pronounce names will do better, check out the article in Psychological Science: “If It’s Difficult to Pronounce, It Must Be Risky” where authors Hyunjin Song and Norbert Schwarz concluded that “the present results consistently show that people perceive disfluently processed stimuli as riskier than fluently processed stimuli.” In English, if you put out an “alphabet soup” name, you start from a negative position in the minds of consumers.

The other huge reason for not picking the “alphabet soup” names you get when you decide based on available domain names is “top of mind” awareness. If you pick a name that sounds familiar and links to ideas that consumers already have in their head about the product or service you are naming, then you have a significant head start in getting consumers to become aware of and understand your business. Better to get consumers nodding their heads instead of scratching them!

There are ALWAYS options for domain names. If the domain name you want is being used, you can try to buy it. Or, if the domain holder won’t sell it, you can finesse it (e.g., if XYZ.com is, taken you can often get XYZonline.com or BuyXYZ.com). Or you can enhance it by adding a word that contains a selling point for your brand (e.g., XYZstyle.com). Being creative in domain names once you have the name of your business is a solid approach to developing a large and successful business.

If you develop a name that yields a great domain name, but your Target Consumer doesn’t get it, you have failed. The reality is that you need a great name for your business, and while a great domain name is certainly a factor in the success of your business, it should not be the driver!

Entrepreneurs, please stop the nonsense. Develop great names that are based on your Target Consumer and his/her needs and wants. Then worry about things like domain names, SEO, and all the other tactics you can use in your business. But don’t let tactics drive strategy in name development.