What do Dolby, Gates, Leitch, Moseley and Orban have in common? They were all companies that took their founders' names as the company name. That's not been an unusual thing in the history of incorporation — think Ford, Heinz or Disney — but it doesn't seem very popular today.
In fact the “professionals” out there now say that it is a bad idea to name a business after yourself because you may, among other reasons, end up selling your name with the company down the road. However, Harris, for example, had no problem squashing the Gates name above the front door, while it continued to be used on the products for some time.
Nor, they say, should you indicate in the business name anything about the nature of the business: You may, after all, find out that the things you can make and sell — or provide a service for — are not the ones you were originally thinking about. That's why International Business Machines had to become IBM, they indicate, because of the PC; General Electric had to become GE because of its spacecraft work; Minnesota Mining & Manufacturing had to become 3M… you get the picture. (Incidentally, there is a story that the head of General Electric traveled to England in the early part of the 20th century to talk with executives at The General Electric Corporation based there. Their discussions were to determine if one of the companies should change their name to avoid investor or customer confusion; they decided neither should because business would never be international enough for there to be any problem!)
At the same time there is nothing wrong with the name Amtrak to show very clearly the nature of its business (the inability to succeed in it is another matter). But decisions by a company like Burlington Northern to get into the “transport” business rather than just rail traffic made it drop railroad from its name pretty quickly. Any name may end up dating or pigeonholing you.
People-named companies are often very successful ones: Peter Norton is the one that immediately comes to mind, and I will still remember his name when the “strategic” names have long disappeared; names like Avaya, Accenture, Azanda, Anadigm, Agere, Agilent — and that's only the “A”s. At the other end of the alphabet the combinations using the letter X and Z are unbelievably complex, and you really hate to ask some of these companies how they believe their name should be pronounced.
There are actually consultant companies out there who will take a small fortune from you to tell you what you should call your company. People ask, they say, for company names with fewer than seven letters, but some of the experts are analyzing customer reactions to companies with as many as three words in the name.
Maybe the Internet has caused a lot of this. Are some companies basing their names on their ability to register a domain? I suspect they are. Apparently all the possible three-letter combination domains are gone; but if you go look, some of them are hilarious, others have no relationship whatever with the company's trading name, and still others, like zjx.com, are being held by speculators — in the obvious belief that someone can come up with words with such initials. If they do, it won't be in English!
In our industry there were no bad effects for Parker Gates, James Leitch, Jack Moseley or Bob Orban in the get-ahead game of doing business. Yes, their names stuck with the company at sale — in one way or another — but we continue to think of all of them as reliable and dependable. Surely that has something to do with the feeling that there was a stopping point for the buck in each of those companies, as we still think of Ray Dolby. Have you seen any of the companies involved in last year's scary financial tricks with the founder's name still attached? I believe Morgan-Stanley is it, as even Arthur Andersen had changed its name by that time.
The experts — yes, them again — say that the new owners of the company you have named after yourself could harm your reputation after ownership changes, but that has certainly not happened with any of the above broadcast equipment companies. Nor is it likely to, because we're a technological industry where the inventor's vision went into the products. You would have to work really hard to mess it all up.
We could talk about Martha Stewart Omnimedia. But that's another column.
Paul McGoldrick is an industry consultant based on the West Coast.
Send questions and comments to:paul_mcgoldrick@primediabusiness.com
