Startup companies are a very interesting sector to watch and I wish I would write about more of them. I have been watching them more lately than I have in the past so maybe I will write about them more. The startup domain market is pretty odd really!
One thing I have noticed while scouring CrunchBase.com is that A LOT of startups are simply naming the companies a single word. Let me use Honor for an example, a service that connects in-home caregivers, seniors and their families. Founded in August 2014 by Seth Sternberg who founded and sold Meebo to Google for around $100M. Honor is not Honor.com but are using the domain name JoinHonor.com. They currently have $20 Million in funding.
Since “Honor” is “Honor”, funding is rising, the company is gaining traction… doesn’t this simply raise the value of Honor.com? I think so! It creates higher demand on the term. Why not try and buy Honor.com from the start is something I ask myself, maybe they did? If they couldn’t buy it then, why still use the “Honor” name for the company? Honor.com is owned by a large company, First Data Corp and they are only using the domain name as a redirect to FirstData.com… which is a good thing in a way for “Honor” but that redirect doesn’t lower the “value” on the domain name!
My basic point is, they are picking a company name to use that they do not own the very important EMD from the start! If they decide to launch anyway without the EMD, doing so will likely raise the purchase price later, plus as the company grows… I see them needing the EMD to get to the next level.
There is always the flip side… startup, no money and the domain is only one part of the puzzle. Heavy focus will be needed while promoting the service and the domain (the main source directing everybody to one location around the world) since it’s not an EMD. Some traffic will be lost! If and when funding is strong, then purchase the EMD if they can! Honor.com is a wise investment by itself because it’s liquid and could be sold if things go bad (aka Brand.com).
Blush, an online life coaching service was founded January 1, 2014… using the domain name JoinBlush.com. Blush.com was created in 1995 and is owned by DermStore.com. Since “blush” is a cosmetic product as well… this adds to the value of the domain by itself but Blush.com is also a current redirect domain name…. Pattern starting? Maybe these startups are picking names based on domain names that are not currently full business websites? Not likely!
Via, founded in 2012 and is a on-demand transit service. They are using the domain name RideWithVia.com but this service is more app related and I think is different from Blush and Honor with both of those services needing a big web presence because they are service related. It is still important for Via to have a website to inform other what they offer and for discovery purposes. Via.com is owned by Flightraja Travel Pvt Ltd. Not likely going to buy that one!
Endurance founded January 2015 offering laser cutter, drones and robotics. EnduranceRobtics.com is the domain used. Endurance.com owns popular brand HostGator, Domain.com, BlueHost, FatCow and more. The new robotics company won’t be buying this domain!
Meed, launched April 1, 2015 is a career platform for students and employers. Using the domain name GetMeed.com. Meed.com is owned by MEED Media… and they are going to have a very hard time to acquire this domain….
Meerkat, which launched in 2012 and is a live streaming video app and uses the domain name MeerkatApp.co . I have spoken with the Meerkat.com domain owner and he is not interested in selling.
Victor, which launched in 2011 and is a service to find best rates for private charter planes uses the domain name FlyVictor.com. They are heavily funded and have not purchased Victor.com, which actually redirects to BetVictor.com.
I could go on and on and on with many new and newer startup companies that launch with a fancy one word term but do not own the exact match domain. Clearly there are a lot of startups launching with a unique “brand name” but often times these confusing brand names become the “sounds like” one word term! Twttr became Twitter for an example. Flickr ended up buying Flicker.com.
I just find it silly to name your company something that you can not own the EMD for it or what you are doing can dramatically raise the price on it if you do try to buy it later! EMD’s bring credibility and can be a difference maker in a market over competition! Yes there are plenty of other .whatever’s you can register but .com’s are selling for millions for a reason! Millions of companies use .com for a reason for their main websites!
With payment options, leasing and many more options… these startups should try hard to secure the EMD in some fashion prior to public launch, funding (at least before announcing funding publicly) or pick a different name!
I’d venture to guess most of these examples, named their company and then went to find the domain. They fell in love with their name choice early on but decided on settling for the lesser address. There’s many more things to worry about as a startup, like releasing a product. Never mind marketing 😉
With a large chunk of single word .com taken, I’ve helped many entrepreneurs work backwards from the above method by finding name options within their budget. If you start this way, you don’t fall in love with something you can’t obtain. It’s not easy.
Entrepreneurs aren’t uniquely weird. Most people don’t think about buying domains at all, let alone the idea of acquiring via an option or leasing a domain. I’ve presented the option and lease idea to many a stunned startup veteran.
Buying domains at all is a fairly impulsive reaction to a spark of an idea and most people just settle. They just want to start their site and get their product out and buying a domain is something they expect to be handled immediately. . . This impulsiveness leads to many bad decisions, though most won’t realize or admit them.
having a single word name and double word domain is really weird!!!!
That’s the reason why at Catchy.com all the dot com brands are for rent with an exclusive purchase option, to allow startups to use their brand from the begining, when they still have no VC money. But the main problem today is most of these new startups only launch mobile apps services so having a domain has a very low importance.
Francois, it appears that a lot of startups also “change course” and sometimes go from an “app” format to a service. App or service, I still think for branding / marketing that owning the exact match .com domain is important!
Absolutely correct and to the point article!
Just to add their vulnerability to competition by having confused customers sending inquiries/orders to the actual .com domain extension 🙂
Miltos
The thing is, what happens if the startup fails? They will have blown biggish bucks on a domain. That said, if it’s something like honor.com, they could we’ll have added to the value of the domain through the business goodwill they have created. Now let’s say the startup is a massive success. It’s best they get the dot com domain. They have to pay a million. So what? The startup is out the gates. It’s a bit of a game of chess with many possible outcomes. But if your launching a startup on brand name on say – Amazon – it’s a big help if you own Amazon.com :0)
Game of chess is a great way to put it!
I agree, it’s weird to have a company named X hosted on JoinX.com. That’s why many startups decide to resort to alternative extensions like .co, .io, etc, where they can get the matching X domain.
When i read about startups and domains, i like to remind myself of mint vs wesabe.
If a startup targets non sophisticated users, like it was the case with personal finances, i think a good domain is important.
Couple things:
The color of the reply texts is dark gray on gray and is hard to read. Can you change it to black?
Only domainers care about domains. 99.9% of the population doesn’t know and doesn’t care. And that includes people starting up businesses. We, the domainers, are the outliers. Not them.
How does the text color look now Tony?
not very original names. how many other companies are called these as well?
Great article
They need to pick a name they can own the exact match no excuses
Its the first and biggest marketing piece of the company puzzle
If they don’t want to find one that’s available or pay for it then they need to keep doing the work to find one that is available and that goes for the social media handles as well
They need to put the work in or hire experienced people who know about this
Universities need to have a course on this for marketing/advertising degrees
Nice post Jamie and welcome to my world!
One thing to keep in mind is that a lot of startup founders are kids in their early twenties. Some of them simply don’t have the marketing experience or historical context to realize what a disastrous mistake they are making by not having the exact match .com domain (and not making that part of the initial name selection criteria). This might be their first business and they may never have experienced the consequences of this mistake before so they don’t know the train wreck that lies ahead for them. Just this week I witnessed a startup balk at paying more than $1,000 for TheirName.com. They figured the .CO domain they were using would be just fine. The seller even offered to let them lease the .com for $5K a year. Of course I get that budgets are tight and the product or service comes first, but at some stage a serious investor is going to smack the startup founders upside the head and tell them they screwed up by not getting the ‘right’ domain. Seen that happen time and time again… As I like to say, the best time to fix a problem is to avoid it in the first place. *sigh*
The familiar single word company names no doubt complicate trademark issues as well. I think a lot of young founders relate to domains from the perspective of having a few dozen of their own that they paid reg fee for. They resent paying more. They don’t appreciate how much more they will have to spend in marketing as a result of not having their EMD.
Leasing with an option to buy is only sensible if the option strike price is contractually agreed up front. Otherwise the startup puts money and effort into building the brand and making the domain name even more valuable, only for the domain name owner to table a ridiculous offer when the startup wants to buy. And if the startup has been using the domain name for a year or so, the cost of switching becomes extortionate. The startup also needs to make sure that it has a period of exclusivity when the domain name owner cannot sell the domain name to anybody else (like the startup’s main competitor, for example).
Enjoyed reading your post, Jamie. You sure have done some good research on the examples you have cited. Personally I am obsessed with the idea of acquiring the exact-match name for any business idea that I think of.
However I also feel that a company with a great product/service can succeed in spite of not having the best web address, whereas a company with a poor product/service is a lot more likely to fail even if they manage to acquire the exact-match web address, and put it to use from day one.
That said, I completely agree with you on the long-term business advantages of having an exact-match name from brandability, credibility, and marketing perspectives.
Thanks Patrick. I totally agree, the domain name is only part of the puzzle.. but it can be an important one! In order for startup to display its product/service, it needs to be found! Naming a company or product a single word and not owning an exact match can leave that product/service hid in the jungle. There are a lot of things that come with owning a great domain name and one of them is trust! I wrote an article about the guys behind Fun.com and Shirts.com and they stated it was much easier to do business when they were known as Shirts.com! People took them serious just because of the domain! https://dotweekly.com/fun-com-powering-top-using-domain-names/ Everything needs a name but it’s also important to be found and easy to be found. Owning the EMD to any company is important.