A costly mistake to avoid before launching your startup (hint: it's all about the name)
We’ve seen it a hundred times. The founders are full-steam-ahead refining the product, getting a launch timeline in place, juggling a million things on a budget that’s as tight as it gets. The name of the company happens almost as an afterthought.
- We need a name!
- Okay… let’s do something short and sweet, like Casper or Away.
There are many glaring problems with this approach:
- A name that’s ‘short and sweet’ just for the heck of it will likely fail to communicate anything relevant about your brand, or resonate with your audience.
- More often than not, the chosen name says more about the founders (“I named our company Owelette because I’m obsessed with those wise birds”) than about the brand or its audience.
- Very often you'll to run into a trademark issues that will cost you a big chunk of time and money and set back your timeline.
These are all major problems, but let’s focus on #3. The rationale behind naming the company on your own is always to save money. While working with an agency to go through a naming consultation is a smart investment, bootstrap startups don’t believe they have the funds for it, so they skip that process altogether. More often than not, they also forego working with a trademark attorney to secure the name they’ve come up with — in most cases, because they *don’t even know they should*.
Now, you’ve launched your fashion-focused app, Owelette, and you’ve been running for 6 months. You’ve gained a little traction, you’ve been building good organic SEO. On a sunny Tuesday morning, you receive a cease-and-desist letter from Owelette Holdings, Inc., with all kinds of scary-sounding legal terms that you don’t fully understand, but that boil down to “we need to rename the company STAT”.
What happens next? You need to come up with a new name, and this time you know better than to skip the trademark attorney — you may even use some of the funding you’ve raised to work with an agency. You get new branding done, apply it to your website (now under a new URL), change all your social channels. Trash every single piece of collateral you’ve ever printed, any signage or merch with the old name. Rebuild your SEO with the new name and URL. Break the news about the change to your customers, field their confused questions for several months.
You get the picture, it’s no fun.
So now we have wasted a ton of effort, not to mention thrown away perfectly good resources and suffered a morale blow. And because we’re on a time crunch, working with an agency and a trademark attorney may be more difficult and expensive than it would have been pre-launch.
Many entrepreneurs hear the word ‘attorney’ and automatically think ‘can’t afford it, not happening’. When it comes to trademarking your brand name, that’s actually likely not the case. I can’t tell you how many people I’ve had to promise that I wasn’t joking when I assured them that they could definitely afford going through the proper process.
Don’t get me wrong, if you’re hiring a service that runs a $169 special, you’re going to get that level of service, you’ll get what you pay for. At our firm, we keep our fee at right around $1000, which is a very reasonable fee, and we take an approach where we’re not going to cut corners. I know $1000 is still a lot of money to a lot of people, but if you’re starting a real business, you’re going to need to invest real money in things that should be done.
- Josh Gerben, Principal, Gerben Law Firm
The same goes for working with a branding agency. If you’re on a tight budget, you may not be able to work with a big agency, which is fine. You can put the time to research smaller firms that are likely to be more affordable, like-minded, and give your project more attention than a large firm would.
Investing in brand development sooner than later pays off big time in the long run. Neglecting a solid foundation for your brand to grow is likely to backfire. Don’t be the next Owelette.