Do company names actually matter?

This is a bit of a trite thought, but: Can it be that company names actually matter? Consider some examples:

  • Microsoft:  stands for "microprocessor software". Still the dominant software vendor for descendants of the original microprocessor. Never made commercially successful hardware.
  • Intel: stands for "integrated electronics" (chips.) Upon commoditization of DRAM, successfully pivoted to microprocessors – a harder-to-design, easier-to-differentiate kind of chip. Growth slowed when less "vertically integrated" competitors emerged, with both chip manufacturing (fabs) and circuit design/"IP" (CPUs, GPUs etc.) getting commoditized (TSMC + ARM is cheaper than Intel.) Had/has a consumer product division which was never successful.
  • Google: "a very large number", does "things that scale". After its original service, web search, had success with webmail and a smartphone OS. Not known for particularly attentive customer support (support doesn't scale.)
  • Amazon: "plenty", does "things that scale". Originally an online retail company, had success with e-book readers and "cloud infrastructure". Does everything it can so you never have to talk to support, which doesn't scale.
  • Samsung: "three stars", the world "three" representing "big, numerous and powerful". Indeed they are, in a wide variety of areas.
  • Facebook: a one-product company. Buys up other messaging, sharing and social networking companies so people can't flock elsewhere. Facebook phone tanked.
  • Twitter: another one-product company.
  • Apple: name stands for sweet stuff (say loyal users to befuddled me.) Used to be called "Apple Computer", renamed to plain "Apple" in 2007. Successfully incorporated device and chip design, server- and client-side software and retail into its business.
  • IBM: international business machines. A long-time near-monopoly in business computing, still going relatively strong in data storage systems, job schedulers and other corporate IT stuff. No considerable success in any consumer market despite the IBM PC being the first wildly successful computer for consumers (PC division eventually sold to Lenovo.)
  • The Walt Disney company: vigorously lobbies for copyright protection for characters created during Walt's days. Few characters created after Walt's death are nearly as successful; arguably the most successful ones came from acquiring Pixar, Marvel and Lucasfilm. Money spent on buying Pixar probably could have been saved if the company didn't fire John Lasseter but instead let him develop his ideas about computer animation. Would Walt have failed to see the potential?
  • Toyota: originally "Toyoda", a family name. Today's CEO is a founder's descendant. The founder's first name is not in the company's name. The company does not seem weakened by the founder's demise.

Some of my Google/Wikipedia-based "research" might be off. And I doubt that founding a company called "Huge Profits" would necessarily net me huge profits. However:

  1. The company name often reflects founders' vision.
  2. Such a vision doesn't change easily, especially if a company is successful – because success is convincing/addictive, and because an organization was by now built around that vision.
  3. Once the founders are gone, the vision becomes even harder to change because nobody has the authority and confidence. (Indeed one way in which organizations die, IMO, is through the continuous departure of people with authority that are not succeeded by anyone with comparable authority. Gradually, in more and more areas, things operate by inertia without adapting to changes.) Steve Jobs had to come back to Apple Computer to rename it to just "Apple".

So if you're the rare person capable of starting a successful company, and you insist on it being a huge success and not just a big one, make the vision as unconstrained as you can imagine.

P.S. For investment advice taking company names into account, I recommend Ian Lance Taylor's excellent essay titled Stock Prices.

79 comments ↓

#1 Bob on 09.12.14 at 4:09 pm

Does the xbox not count for Microsoft?

#2 Yossi Kreinin on 09.12.14 at 4:23 pm

Perhaps it should; I think it's about 10% of their revenue though, it won't sustain Microsoft if Windows and Office fade out of use, and it won't break Microsoft if Xbox is killed off completely by a competitor (the chances of which I'm not sure about, knowing very little about gaming; certainly it doesn't look nearly as entrenched as Windows and Office but that could be due to my ignorance.)

#3 John Maguire on 09.12.14 at 4:55 pm

It's definitely one of the two biggest gaming consoles (the other being the Playstation.)

#4 Yossi Kreinin on 09.12.14 at 4:59 pm

Sure, but it's not a huge market by Microsoft's standards (of this I'm rather certain), and the barrier to entry is too low by Microsoft's standards (of this I'm less certain; intuitively it seems that someone offering exciting new hardware [a recent example is VR] could easily attract a lot of gamers who don't care about running yesterday's titles, and a lot of game developers who care about their new titles' sales; with Windows and Office this is not the case, because compatibility issues are a much larger barrier there. But I'm not entirely sure. I am pretty sure Xbox can never make or break Microsoft.)

#5 Aristotle Pagaltzis on 09.12.14 at 8:38 pm

Seemingly everyone who ever writes about Amazon’s customer support raves and/or gushes about it. I don’t think that invalidates your point about the company per se, but your summaries of Google and Amazon make it sound as though those both think of support the same way, and all I have seen appears to say that nothing could be further from the truth. They may both be doing their level best to keep you out of customer support because it cannot scale, but Amazon seem to pour considerable resources into it regardless.

#6 Yossi Kreinin on 09.12.14 at 9:05 pm

I was actually careful to make a distinction there: "Not known for particularly attentive customer support" vs "Does everything it can so you never have to talk to support".

#7 gus3 on 09.12.14 at 9:16 pm

Contrasting the buyouts of Pixar and Lucasfilm, Disney paid more in real $$$ for Buzz Lightyear than for Han Solo.

#8 Yossi Kreinin on 09.12.14 at 9:19 pm

Pixar has more characters than Lucasfilm though, and it has all that computer animation expertise, which I guess added to its price. It's interesting how things would work if Lasseter stayed at Disney though. For instance, his original plan was hand-drawn characters with computer-rendered backgrounds. This one never materialized, as I bet it would have at Disney, and this is one of the more obvious things we never got to see because of how things worked out.

#9 Konrad on 09.18.14 at 7:02 pm

s/microprocessor software/microcomputer software

#10 Yossi Kreinin on 09.18.14 at 9:03 pm

That would fit my narrative better still (to the extent that PCs are "microcomputers" and cell phones etc. are not). Wikipedia said "microprocessor software" though (despite my recollection that it's actually microcomputer) and I didn't think to check its references.

#11 MDude on 10.08.14 at 4:44 am

I know Circuit City's name always made me think more of circuit components than devices that happen to contain circuits, so I never thought of going there when considering the types of thing it actually sells.

For something more out there, Mad Catz… Yeah, I think they actually are doing a good job of convincing me they've lost their mind, at least when it comes to website design. Not sure about the cat part, though maybe they have an emphasis of reflex-based games?

I'll have to look into making a company named "Unconstrained Vision Limited".

#12 Yossi Kreinin on 10.08.14 at 9:52 am

"Unlimited vision. Limited liability" should be the corporate slogan.

#13 Michael Moser on 10.08.14 at 9:36 pm

> "Unlimited vision. Limited liability"

wouldn't that be Sony or Siemens? don't know if companies that do everything are such a huge success (well except for fictional ones like Bye and Large or RAMJAC)

#14 Mat Sutcliffe on 11.11.14 at 11:26 pm

One could draw a parallel with the American political system's inability to adapt since the departure of the "founding fathers".

#15 Greg Buchholz on 02.11.15 at 1:48 am

The number is actually a googol.

http://en.wikipedia.org/wiki/Googol

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