Keeping it simple pays off, at least when it comes to naming your tech company. A new study by MIT researchers found that companies with shorter names tend to do better.
The study’s authors found that “the best indicators of entrepreneurial quality were characteristics like a company’s name,” according to the Verge. “Companies that have short names containing words associated with technology tend to grow better. Businesses that aren’t named after their founders also tend to do better over time.”
The researchers focused their study on Silicon Valley, following companies’ success over six years. They say they have enough info and have developed an algorithm that is now a “very good predictor” of how companies will grow.
The report, “Where is Silicon Valley?”, appears in the Feb. 6 issue of Science magazine.
Other marks of a potentially successful startup? The MIT number crunchers also found that corporations do six times as well as companies that aren’t incorporated, companies with trademarks are five times more likely to grow, and patents also indicated greater odds for success.
While mapping the “real” Silicon Valley, not surprisingly, researchers found a mass of “high-quality” areas of entrepreneurship south of the Bay Area, east of Google, around Market St. in San Francisco, and close to Berkeley and Lawrence Livermore Labs. They also found higher quality pockets of entrepreneurship around UCLA and Caltech. The researchers looked at these areas from 2001 to 2011, and companies only headquartered in California, then coded 70 percent of those companies for indicators of success to develop their algorithm.
It’s no surprise here. Several successful Seattle-area companies have incredibly short names, examples being Chef, Evo, Moz, INRIX and Koru. Of course, a short name isn’t everything. There are many companies who had great names and URLs that failed, for example, Microsoft’s ill-fated product Kin, and dot-com flameouts including Boo.com, Pets.com and Disney’s Go.com.
If you’re a startup, how much time did you spend coming up with your company’s name?