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As a co-founder of nine startups and an investor in dozens more, I have helped name many companies. (I am also a parent of three children and two dogs, all of which I have helped name as well – it’s amazing how similar the process of naming a child is to naming a company.) Naming is hard and is a passionate subject among founders which prompts lots of debate.

When we named Pacaso, it took a couple of months. Pacaso was not the first name we chose – in fact, we hadn’t even dreamed up the name when we went through our first round of finalists. Our first name was Niner Homes, a reference to the vitality of the Gold Rush era. We used Niner Homes in our early marketing materials as we built the first version of the beta product, but we ultimately decided to change it to Pacaso.

We got the inspiration for the name Pacaso from the artist Pablo Picasso, but put our own spin on it. Pacaso fills all of my naming criteria (see below), and it’s been well-received by the many Pacaso stakeholders including our employees and Pacaso homeowners.

If you are at the stage where it’s time to name your new venture, here are a few tips to keep in mind as you start to vet potential name options.

What Makes A Good Name?

A good name should be the following things:

* Memorable. Pick something that’s easy to say and remember. A brand name doesn’t have much value if no one can remember it.

* Spellable. Your name should be easy enough to type into the search bar correctly. If it’s overly complex and includes tricky abbreviations or numbers, this could be a problem. (One of my startups was named 6tudio but was pronounced “Studio” - hard to spell, even harder to pronounce. They changed their name to Invisible Universe – much better.)

* Unique letters and sounds help: Try to create a name that’s high in Scrabble points - X, Z, K, P, Y are all good letters.

* Ownable. This may be obvious, but make sure the name is available and trademarkable. At Hotwire, we almost launched with the name Rocket but switched it at the last minute because Rocket.com was not trademarkable.

You should also consider if the name is verb-able or noun-able. Many brands spend a fortune on marketing trying to become a household name, but a brand is really successful when its name becomes synonymous with the product or service it provides. For example, we probably all “Google” something on a daily basis - to Google has become a transitive verb. To Zillow means to look something up on Zillow. An Airbnb means a vacation rental property. And hopefully, someday a Pacaso will be widely known as a co-owned second home. My first startup, Hotwire, never quite got to household brand name status, but we always hoped that “to Hotwire” something would mean to buy a travel product online at a great price. Maybe someday.

Different Types of Names

To help get those gears turning, let’s look at some examples of different types of names. There are a few different categories:

* Real-world, descriptive, and in-category like Whitepages, Bankrate, CreditCards.com, and Apartments.com. These names give you a really great idea of what the company and/or service is but their generic nature makes it unlikely that consumers will ever fall deeply in love with these brands.

* Real-world, not descriptive, and not in-category like Stripe, Plaid, Pipe, Bolt, and Gopuff. These names don’t tell you much about what the company is providing.

* Made-up words like Yahoo, eBay, Bing, and Hulu. These names can create unique new worlds.

* Reference the category without an explanation like Instacart, Netflix, SpaceX, Boosted, LendingTree, and Coinbase. These names give you an idea of what type of product or service is being provided without an explanation.

* Reference with an explanation like Zillow (“zillions of pillows”), dotLA (like “dot-com” but for LA), Pacaso (“combine different things to make something luxurious and beautiful”), and Recon Food (“reconnect over a love of food”).

These names give you an idea of what type of product or service is being provided when given an explanation. As you can probably tell, I prefer names in this last category because they are memorable, have brand equity, and don’t constrain the business with specificity.

Prototype and Pivot

It’s common that in the early stages of a startup, the product or features will change to serve early adopters. When the idea of your product or service morphs, your name might have to change too.

Your business name will be with you for a long time, so it’s important to carefully consider your choice before you move ahead at full speed. A good name will reflect your business’s identity and goals, help market yourself, and keep you out of legal trouble.

Once you have solidified a name, now it’s time to pitch to investors. Check back here in a few weeks for my advice on how to do just that. In the meantime, take a look at some of my examples below to see what names made the final cut:

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Every startup’s goal is growth - and, when funded by venture capital, there is often an immense pressure to grow widely and as fast as possible.

Many startups that have established a strong foothold begin with narrow markets and then have to decide if and when the time is right to broaden their product and expand their market. So, how do you know when, and how, to make that move?

My recommendation is to start with evaluating your strategy and answering a series of questions that focus on what, why, when and how.

A Competitive Edge

Before jumping into expanding your Total Addressable Market (“TAM”), take the time to assess what companies may already exist in your potential broader markets. Are there any pre-existing businesses dominating the space where your company would likely broaden? Are you able to offer customers enough unmet needs to convince them to make a switch? Or is there already another tech-enabled competitor out there that will stifle your expansion and make broadening difficult?

A company that has demonstrated this type of innovative thinking time and time again is Uber. As the world’s largest ride-sharing company, Uber was founded in 2009 and quickly grew to become one of the world’s most valuable startups with a $78 billion valuation in 2020. What originally started as a solution to the unfulfilled needs of traditional taxis and car services quickly grew into a tech company with many business lines–now even offering a rewards credit card.

When expanding into the food delivery game, UberEats came a year and a half after Grubhub and DoorDash. But with an already massive network of drivers, a huge brand with tens of millions of app downloads, and world-class delivery logistics, it was a no-brainer. They essentially just switched from transporting humans to sandwiches–and succeeded knowing their tech and process were better than competitors.

Make it your top priority to provide genuine solutions to problems the competition may have overlooked before broadening, or at the least very, know your product is superior. Find ways to leverage the dominance of your core business in order to win new adjacent markets.

Operational Needs

Unsurprisingly, if you’re intent on broadening your market and service, you’ll need the cash to pursue it. Do you have enough money? Do you need to consider an additional raise? How will that affect valuation?

If you do have enough capital, and there is room in the competitive market lane, it may be time to scale. Additionally, does your broadening expand on your pre-existing tech stack, or are you essentially starting a new business? If you are expanding to a space where you need to significantly change or augment your tech stack–or to a space that is unfamiliar–you may need to again consider hiring the right people to help you.

If you don’t have enough capital, focus on your core vertical.

Exit Opportunities

While your strategy will certainly evolve over the years, it’s critical to identify potential exit paths and plan accordingly. What type of exit do you want? If an IPO is in the cards, expansion may make sense. However, don’t overlook acquisition.

Funding expansion requires a lot of money, and continually raising more money–subsequently raising your valuation–could make you less attractive for acquisition by a single vertical incumbent. Is your core vertical attractive on its own to be acquired and tacked onto a pre-existing company’s software or service?

Leaning into your niche vertical could equal an easier exit. For example, if Uber expected that its exit would be a sale to a competitor in the ride-sharing space, then expanding into other businesses would have made them less attractive for an acquisition. Entering new markets will likely force you to have to raise more money, increasing your company’s valuation and diluting your equity as a founder (i.e. in a lower price acquisition, you make less money).

Have a Plan

As entrepreneurs, growth can be the one thing that challenges and drives us the most. So whether you’re considering tapping into a new vertical or expanding on an existing one, it’s important to assess the environment and reflect on your current strategy. The most important aspect of vertical expansion involves understanding the reasons behind it.

Protect the Core

Beware when expanding into new adjacencies not to neglect the core business which got you to where you are. Ideally the adjacent businesses help strengthen, not weaken, your core business. An obvious example is Amazon expanding beyond books into other categories of ecommerce, which grew its selection, its scale and its customer base, and therefore strengthened its core. But there are many counterexamples where expansion distracted rather than strengthened, including Amazon’s launch of physical bookstores which it recently reversed and shut down.

Organizational Structure

When entering adjacent businesses, determining the appropriate org structure is critical. In a future post I will explore this important topic.

I’ve seen my fair share of funding rounds, both as a founder and investor. And at the risk of stating the obvious, it's clear most startups need funding to succeed.

Even the most brilliant businesses with amazing founder-idea fit will eventually hit a dead-end if they do not have (or run out of) money to support their venture. And the unfortunate reality is these dead-ends are much more common than successfully launching an IPO.

Luckily, there are paths in place for founders and new businesses to continue on their journey towards continued expansion and solvent success. And, unsurprisingly, when it comes to raising money for startups, I have a preference for venture capital.

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