Picking a Proper Business Name and The Problem with Initials

Afternoon Folks!!

I have watched this for many years. People are always in a rush to choose a name and then they don't choose well. And then they tend to change the good ones. I think the name is a key element of any business. A friend sent me an article from adage.com about how companies just gloss over when it comes to their name.

The problem with initials
The latest marketing trend is the use of initials to make a brand seem "hip."

  • JCP instead of JCPenney.

  • DQ instead of Dairy Queen.

  • RH instead of Restoration Hardware.

But just like diet and regular cola, an "initials" name is forever locked with a "name" name.

When consumers see initials, their first thought is, "What do those initials stand for?" JCP only had meaning because consumers associated the initials with JCPenney.

There are many successful brands known by their initials. "AT&T" for American Telephone & Telegraph. "IBM" for International Business Machines. "HP" for Hewlett-Packard. "AARP" for American Association of Retired Persons. "KFC" for Kentucky Fried Chicken.

But name one brand created from scratch with initials only that eventually became a big, successful brand? I can't think of any.

Then why in the world would Mark Zuckerberg, Bill Gates and Jack Dorsey, three of the most successful entrepreneurs in America, launch a Silicon Valley advocacy group called "FWD.us."

  • Mark Zuckerberg founded Facebook.com. Not FB.com.

  • Bill Gates founded Microsoft. Not MS.

  • Jack Dorsey founded Twitter.com. Not TW.com.

Sure, "FWD" is slang for "Forward." But think about this: That's true for every set of initials. They stand for something else. Why not use that "something else" as your brand name?

That is just one of the points made in this article and it is a very good one indeed!

Rick Schwartz

23 thoughts on “Picking a Proper Business Name and The Problem with Initials

  1. M.G.

    At this time (first time), I don’t agree with you, Rick. Short is good and meaning is not always needed. We see a lot of brand names that have no meaning, so why short initials should have them? What does GoDaddy mean? What U2 band stands for? Short choice is the best choice. Period. Sorry…

  2. M.G.

    BTW, Mark Zuckerberg founded TheFacebook.com, later upgraded to Facebook.com and his last step was FB.com. From long to shorter to shortest .com

  3. ivorytrader

    ok… ima gonna let you talk… i’da said that myself but for only 8.8 million he got hisself a bargain. but nobody uses that anyway… even on firefox if you put in a F you a prolly a’goin to facebook.

  4. M.G.

    @ivorytrader – Website of FB.com forwards to Facebook.com site, including users’ sites (e.g. FB.com/CNN), but besides of that Facebook uses domain name FB.com for employee’s email addresses.

  5. Drew Rosener

    Shorter is better and that principle will only become more true as we move forward, the internet evolves and access to the internet from mobile devices far exceeds access from laptops and pc’s. We sold RH.com to Restoration Hardware. We sold DX.com to Deal Extreme. We are negotiating the sale of PX.com right now and it’s only a matter of time before one of the several billion dollars companies whose initials are “CH” steps up to buy CH.com.

    Why? Because it takes 3 clicks on an iPhone to get a potential customer on to your site. Purchase intent is fleeting and if you can get a customer on your site in less than 5 seconds your chances of closing a sale is higher. There is no faster way to get a customer on your site. Not to mention to avoid typos (we all know the cost of typos to a company). Simple.

  6. UFO

    MG -You’ve missed one point. It depends how much sunk marketing there is in branding and how recollection CAN be improved in consumer’s minds. Take the Facebook example. Facebook is definitely superior to TheFacebook as ‘The’ is a redundant term. FB versus Facebook isn’t as good although SOME users may find it quicker and over a much longer period users might migrate more and more to FB as they get it ingrained in their minds.

    I think you also miss the point of bookmarks and SE queries. Bookmarks once established are simply followed verbatim, With SE queries people search for Facebook and not FB. FB is an acronym which is effectively slang.

    FB is actually harder to remember than Facebook, because you have to make 2 steps, Oh facebook that is FB. If the brand term didn’t have clear recognition or was used infrequently then a short acronym may work better, IBM works better than International business machines.

    The O.co case actually suffered from this, what is O? Nothing. Do they think their brand is so world renowned that people when they see O they think of their company?

    Linguistics isn’t a mathematical model and short is generally better but definitely not always, its all about recollection. The more difficult it is the more like consumers themselves are likely to start shortening it in recollection and conversation.

  7. Jeff Schneider

    Hello Rick,

    It is amazing how nuanced your message is here Rick. For those paying real attention it speaks volumes.

    Initials DO NOT and have NEVER got the Big named companies noticed initially.

    EXAMPLE: All Initials are aimed at Foundational original name for a reason, because its the foundational name of inception for all highly visible and successful companies. Initials mean nothing unless attached to real spelled words. KISS

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  8. Gene

    If you own 3-letter dot-coms…good for you.

    But…from a branding and TM-strength perspective, building a business on an acronym is a HORRIBLE idea.

    Know this: If you do try to build your brand on an acronym you’ll need a lot of luck trying to enforce your trademark rights upon discovering that another company (or companies), in your same space, uses the same name, and operates online using ‘acronym.whatever.’

    Unless you’ve generated billions and sales, been around for years, and can demonstrate via expensive studies that consumers associate those letters with YOUR services, …you’ll be either changing your name down the road or paying seven figures in litigation fees.

  9. M.G.

    @DrewRosener – You right, but I don’t understand why you sell so unique and prestige two-letter .com names so cheap. I would never sell it so low. You better wait a little bit longer and sell it for much more…

  10. M.G.

    @UFO – Two-letter .com names are for big brands, that are well known, have robust marketing regardless of domain name and do not need to be find by search queries. Two-letter .com names are prestige names for top brands, not for domainers looking to get more search related visitors to get money on parking revenue…

  11. Rick Schwartz

    I think the point is some companies use the acronym too prematurely.
    See General Electric became GE for more than one reason. Their own customers were the ones that called the company GE for short. Not the other way around.

    Same with IBM and others. Today some companies just do it prematurely. Before their real name is totally branded.

  12. UFO

    @MG, well you’ve basically argued against youself, NO company is going to do anything unless it confers some advanatge. FB v Facebook confers no advantage so therefore isn’t a desired move. I haven’t argued about scale of a company in as much I am arguing that it confers an advantage, thats why say a SME may want E.g. candy.com versus Hershes not wanting candy.com.

    Short (and always more generic) is only best if it gains something. And it isn’t always the case.

  13. UFO


    CH also being the country code for Switzerland (‘Confoederatio Helvetica’).

    There’s a fair few pennies floating around in that nation thats for sure…

  14. M.G.

    @UFO – My point is/was that regardless of any arguments we can have, two-letter .com domain names are the most prestige names for top brands with big budget. It is a prestige move to buy this kind of domain name, which matters a lot. You can buy Hyundai Azera and have same good car as BMW5, but in people’s mind those cars are not even close to compare. Same like Gucci versus Louis Vuitton, etc. It is luxury class. Two-letter .com names are the top of the line, the most luxury and prestige domain names. And therefore they don’t need to have meaning. Need example? LG. Do you know what those two letters mean? Or better says, what they used to mean? If you are 40+, you would know it is from “Life is good” name, but young generation knows it just as LG, with no meaning. Not needed. Any…

  15. UFO


    LG is actually the name of a brand of electronics.

    From Korea I believe. Lets see….

    Yes, LG is a South Korean Electronics company. Its always been called LG because Korean words don’t brand well, acronyms better.

    Ahh… It was formed with a Merger between ‘Lak-Hui Chemical Industrial Corp’ (Lak-Hui means Lucky) and Goldstar consumer electronics. Hence LG.

  16. craig

    In Canada they are branding LG as “Live Good” (appliances and TVs)
    Does KISS mean Keep it stupid simple?
    OK….bad humor…sorry
    Good post…thanks Rick and very good luck with Traffic!

  17. NEIL

    I would want to let you know that JCPenney has http://www.JCPenney.com, and forwarding tot this name: JCPenny.com…so the Stock Price should be higher than $7.77. They fired the arrogant CEO-yuppie, bringing back from retirement fishing the former CEO.
    Isn’t It GrandCentral100.com?

  18. Jeff Schneider

    Hello Rick,

    Bottom Line, The original name on the corporations Incorporation Papers is the genesis of all Great companies, having nothing to do with its initials. Initials only mean something when pegged to real words. To think otherwise is counterintuitive, resembling the tail wagging the dog.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  19. M Altaf Hossain

    It was good that Rick’s thoughts are shared here. But an acronym is not a key word that people will search unless it is advertised with word of mouth to be popular and branded in the long run. As IBM we knew over many many years but not JCP. If JCP spreads like KFC it will gain momentum too.

  20. Sage

    They started marketing their slogan as “Life’s Good” after they identified themselves as LG.


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