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Competitive Edge Research & Communication will Henceforth be Known as “The Edge”… or Not

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Does a shorter company name predict its success? Putting aside any bias we may have on the topic at Competitive Edge Research & Communication (!), a study published in a recent issue of Science Magazine found shorter names were a predictor of a tech company’s relative success.

In the study, Massachusetts Institute of Technology researchers developed an algorithm after following Silicon Valley start-ups over a six-year period. Aside from name length, other more “normal” factors predicting success included whether the firm had patents or trademarks, and whether it was formed as a corporation.

Bear in mind this research wasn’t claiming shorter-named tech firms were ranked higher based on earnings or other measures of success versus companies with longer names. It found those with short names did better over time.

Hmm, maybe it’s time to go with “Edge Research.” Or “The Edge” might be our ticket to success (U2 fans shudder).

What I think is going on here is that MIT is tapping into the seriousness of the entrepreneur.  Those who are more serious are going to pursue patents and trademarks. Less diligent entrepreneurs will be less likely to spend the time and money on incorporating. And those who sweat the small stuff, like creating name, are more likely to be successful. While I do think shorter names can sometimes be more memorable, I think they are more a marker for the effort and seriousness of the Silicon Valley entrepreneur.

In our version of the famous question posed by Shakespeare’s Juliet, “what’s in a name?” we wanted to see whether the same type of relationship held up for the world’s biggest brands.

The Edge and Bono of U2 perform in Foxboro, Massachusetts in 2008. Flickr/Creative Commons license

The Edge and Bono of U2 perform in Foxboro, Massachusetts in 2008. Flickr/Creative Commons license

We pulled the Forbes list of the world’s most powerful brands.
Our answer: there is no relationship between name length and brand value of these top 100. No relationship between the amount of money spent on advertising, change in value, or revenue.

The official names of many of the companies that own these brands are longer than what we commonly call them. For example, “Ford” is formally Ford Motor Company. “Pepsi” is PepsiCo, Inc. We aren’t sure how MIT factored this aspect into its study, or if it even had to because start-ups may not have “brands.”

If your product or service fills a consumer need, I don’t think it will matter if your company has a long or difficult name. Americans scratched their heads at first when the German company Volkswagen hit our shores. Even people who wear no-label jeans know the fashion brand Louis Vuitton.

So if you’ve got a company name like ours, Competitive Edge Research & Communication, or if you’re agonizing over what to name your firm, don’t sweat it all that much. Your name isn’t your destiny. Sweat your company’s value proposition and how to communicate it to the customer.

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