A new study out today by Clutch, a Washington, DC-based research firm, whose domain name is Clutch.co, shows that 41% of newer, venture-funded startups have invented names, almost three times the amount of invented names in comparison to other high growth companies.
“The influx of invented names could be in response to the desire for a dot-com domain extension. Clutch’s data showed that 88% of startups have .com domain names.”
“However, with various alternate domain options, some emphasize that a company should instead focus on developing a strong, memorable name for their brand.
The data comes from an analysis of 700 companies:
The first group contained 350 companies from the 2015 Inc. 500 list; all of these companies were founded before 2012 and had a minimum of $2 million in revenue in 2014.
The second group contained 350 companies that were identified through the CrunchBase database; all of these companies are venture funded startups that were founded after 2012 and received a minimum of $3 million in venture funding in 2015.
The data collected for each company included: the name, the name type, the construction of the name, the domain name, the domain extension, and the industry the company resides in.
Clutch then compared the name types of companies founded before 2012 on the Inc. 500 list to the venture funded startups that were founded after 2012.
Clutch used Zinzin’s naming criteria for our name type analysis. We analyzed whether a name was primarily descriptive, experiential, evocative, or invented.
- Descriptive – “Names that are purely descriptive of what a company or product does or its function”
- Experiential – “Names that map to the experience of using a product or a service, or to what a company does, or to an aspect of human experience.”
- Evocative – “Names that map metaphorically instead of literally to the brand positioning. They rise above the goods and services being offered and paint a bigger picture.”
- Invented – “The purely invented, the morphemic mash-up, and foreign words not widely known to the English speaker.”
Jay Jurisich, the founder and CEO of brand naming agency Zinzin is quoted as saying:
“We advise companies all the time not to let domain names dictate their choice of names, it’s far better to have a great brand name with a modified domain name, or a non dot-com top-level domain, than a weak name with an exact-match domain.
“The brand name should always have priority over the domain name.”
“The brand name should always have priority over the domain name.”
We are in an online word where your domain name is your brand name. I remember saying Box Dot Net every time I was talking about Box wich is now on a .com.
Think about Bitly, we used to call it Bit Dot Ly. You have to say the domain extension every time no matter what extension your are on.. Unless it’s a .com.
Also, same rule applies for prefix. Exemple: The Face Book vs Face Book. You can’t call your company FaceBook if you don’t own FaceBook .com. Your name should be “The Face Book” and even if your address is Face Book and it’s on a .club, your name is Face Book Dot Club.
I would have called Clutch.co a directory website rather than a “research firm”. ZinZin happens to be the naming agency Clutch.co has worked with and which it promotes. In fact, professional namers were warning one another not to submit listings to Clutch.co unless they wanted to appear ranked below ZinZin. Nothing against ZinZin whatsoever, but that’s what I’ve been told about Clutch.co.
This is an interesting study. VC-funded startups do exhibit drastically different naming patterns compared to established companies like those on the Inc. 500 list. We might interpret that difference in various ways. Possibly the established brands show an old style, whereas new startup brands are starting new trends. Then again, maybe the established companies indicate what these aspiring startups may need to do in order for their brands to last – in which case those that already fit the Inc. pattern or rebrand in order to fit it may see a greater chance of success … of becoming Inc. 500 companies themselves. Probably both.
We might explain the discrepancy in terms of company maturity, budget, domain availability, a preference for .COM, or contemporary trends in naming. We might even chalk up many invented names to Silicon Valley micro-culture, which involves a fair amount of group think and jumping aboard bandwagons. Probably all of the above.
ZinZin’s statement that “the brand name should always have priority over the domain name” is something I agree with. Likewise it’s important for entrepreneurs “not to let domain names dictate their choice of names”. That said, it’s sensible to let domain availability INFLUENCE our choice of names. Sometimes a “modified domain name, or a non dot-com top-level domain” will work, but sometimes it won’t.
Naming agencies tend to fall in love with their favorite name idea – enough that they will steer a client to adopt it in some form, regardless of drawbacks associated with the domain implementation. This bias affects all namers.
Joseph
I didn’t call them anything, what is in the post is what Clutch.co called themselves.
Their study so they get to describe their business the way they want, I report it, you guys then can accept it or tear it apart
If it was obviously flawed I would have called them out but without looking at the raw data all over again don’t have any basis to know.
@Michael Berkens,
My remarks are about the phrase “research firm”, not about whose phrase it is; and about the relationship between Clutch.co and ZinZin, not about you or TheDomains.com.
I didn’t say the study was flawed; I said it was “interesting”. And I didn’t tear the study, or ZinZin (whom I respect), or you (whom I also respect), or anybody else apart. The study was open to interpretation; so I interpreted. And the quote by ZinZin was open to debate; so I answered Xavier Lemay, who disagreed with it.
I promise I’m not out to get you, Mike.
Here’s why this study doesn’t say much…the companies should have been divided up based on whether they were founded before or after 2014 rather than 2012 because that’s when the new gTLD rollout began.
In the current version of this study, you have Group A (companies founded before 2012) and Group B (companies founded after 2012). How can you draw a conclusion from comparing the domain name selections of Group A and Group B when some companies in Group B had 700 more domain extensions to choose from than other companies in group B?
The way to make this study interesting is to only examine companies founded after 2014. That way you can tell if .com availability is still affecting branding decisions when companies have more than 750 new extensions to consider including .agency, .business, .tech, .company, .services, etc.
@Zed,
That’s a valid criticism. But if they had only looked at startups founded after the nTLDs were introduced, then that wouldn’t give those companies much time to actually get started. Obtaining $3 million in VC funding doesn’t happen overnight.
And only a few nTLDs were available right at the beginning of 2014. And there’s a lag in consumer awareness. Surely a later cutoff would be more fair, since only then would hundreds of nTLD options really exist. Perhaps the beginning of 2015?
Using a 2014 or 2015 cutoff would decimate the sample size, and then conclusions wouldn’t be as statistically significant. We’ll need to wait a couple of years to be able to perform a study that includes enough VC-backed startups that began during this period.
I am not surprised with this report because everybody still wants to be represented on the .com and the only way to achieve this is to be creative with domain names.
“Clutch’s data showed that 88% of startups have .com domain names.”
So I think we should all continue to buy up good .com domain names then. As long as they have use to a company and are priced right, there is a chance they will buy it. Also, most people who own a .com domain name get type in traffic from mistakes of a visitor not “remembering” if the extention was .com or .something else.
Thanks for the write up!
-Omar
I took advantage of an unregistered domain to take immediate advantage of the hovertraxing hoverboarding market http://www.HoverTraxing.com (CIS). THIS FEELS LIKE ROLLERBLADING.COM 2.0 D2000-0427.
FEEDBACK?
The way to make this study interesting is to only examine companies founded after 2014. That way you can tell if .com availability is still affecting branding decisions when companies have more than 750 new extensions to consider including .agency, .business, .tech, .company, .services, etc.