how to pick a domain nameHere at FairWinds, we receive dozens of requests a month to anonymously acquire domains. Most of these requests come from our pre-existing clients, who are, in the main, multibillion-dollar public and private enterprises. However, we have steadily been performing more work for pre-launch startups, smaller up-and-coming companies, and “unicorns,” or new ventures worth over $1 billion.

The more we have worked with startups of all kinds, the more we have noticed they have some unique needs—and challenges—related to domain names. This is more important than many founders realize, and so, at the suggestion of one seed venture capital firm familiar with our work, we’re offering here some tips to the startup community regarding branding and domain names that would be helpful.

 

How to Pick a Domain Name for Startups

What we have learned from buying names for well-known companies as well as for post-launch new brands is that it is hard to get a good price for the exact-match company name in a .COM. This shouldn’t be a surprising finding, but so many companies are taking the wrong approach to how to pick a domain name, and that is more unexpected and problematic.

Consider the Flickr/Flicker.com case. We don’t know why, but the creators of Flickr, now owned by Yahoo!, chose a non-intuitive spelling for their company name. This was perhaps due to domain name availability issues, or perhaps due to naming preferences on the part of Flickr founders. But, as a result of this decision—and the resulting consumer confusion regarding the company’s domain name—Yahoo! endured quite a legal saga in acquiring the more intuitive Flicker.com, eventually winning it back from a China-based registrant. They now have in place a redirect system, which reorients consumer typos, from Flicker.com to Flickr.com.

Either because of limited availability of attractive .COM names, or because of a need for trademark-supportive brand names, we’ve seen an alarming increase in popularity of this longstanding ‘fad’ of intentional misspellings, whether on the left side of the dot, as in Flickr, or on the right side, as explained below.

 

How ccTLDs Factor Into How to Pick a Domain Name

Certain domain name extensions are popular in Silicon Valley and elsewhere these days. For example, those ending in:

  • .VC,
  • .CO,
  • .IO, and
  • .AI.

They may seem like harmless, even ideal, choices given their relatively cheap prices, but we’ve found that in the long run they can become useless or challenging for businesses that have large consumer bases. Furthermore, there may be security concerns as registry safeguards vary from ccTLD to ccTLD.

All of the above-mentioned extensions are ccTLDs, representing, respectively:

  • St. Vincent and the Grenadines,
  • Colombia,
  • the British Indian Ocean Territory, and
  • Anguilla.

As such, they are unusual to the average internet user, but that shouldn’t be the standard when it comes to how to pick a domain name for your startup.

Many people still expect to reach a company website by typing in the company name followed by .COM, and sooner or later, once-startups invariably purchase the more expensive, more intuitive .COM domains that match their company name.

 

Examples of Startups That Made Costly Mistakes By Picking a ccTLD

  1. Startup baby registry site Babyli.st recently moved over to Babylist.com after having launched its business at .ST, the ccTLD for São Tomé and Príncipe. While it’s not clear how much they paid for the latter, we reckon it wasn’t cheap. This is a cost they would not have had to incur if they had known from the beginning how to pick a domain name.
  2. Artificial intelligence-backed company Drive.ai is using an exact match domain name (“drive.ai”), but does not own Drive.com. While a clever use of the ccTLD for Anguilla to represent “artificial intelligence”, it’s also highly unintuitive to the average internet user. We won’t be surprised if Drive.ai acquires the matching .COM name in due course.

 

The Waiting Game For The Right Name

Buying the right name up front can mean a big investment for a startup with limited capital.  Over 90% of Fortune’s 2016 Unicorns now own their company name in .COM.

Whether it’s Uber, which started out with Ubercab.com, or Airbnb, which started out at Airbedandbreakfast.com, purchasing the best fit .COM domain for your company name costs money. As a result, both of these noted unicorns waited until after their first funding series in the tens of millions of dollars to purchase their current domain names, Uber.com and Airbnb.com.

Indeed, waiting until a business has grown and become well-known to try to buy the likely already-in-use .COM equivalent can be excruciatingly costly and difficult.  While new TLDs like .XYZ and ccTLDs like .ST can, at least in the short-term, be viable and catchy, we’re not suggesting that startups do as Babylist did; neither would we recommend the strategies of Uber or Airbnb. If you think you’re going to want to use a .COM domain eventually because it is most familiar to the general public and you can’t afford the best match .COM today, or if the .COM is in use in a significant enough way that it may never be for sale, it might be most strategic to rethink your brand name.

Other extensions, misspellings, and permutations of your brand name are also a good idea to buy up front, but don’t go overboard.

Pinterest did not register typo variants of its name from the beginning, and a few years ago was awarded dozens of these typo domain names from a Chinese cybersquatter, along with $7.2 million in damages and legal fees. (While impressive, this was about $5 million less than they had sought for their trouble.)

An expert can help you choose a limited set of domains that are likely to be useful to the company and likely to cause problems if not owned. For instance, if you were to tell me that international expansion is in your business plans, then I would advise you to acquire the appropriate ccTLDs right away. You can always add more as you gain confidence that the current business plan is going to be a hit, but don’t doubt that cybersquatters and others will not miss the chance to register your domain and, since you probably won’t yet have a global trademark portfolio, you generally will be left without a remedy to recover those names later, other than negotiating an expensive purchase.

 

How To Pick a Domain Name for The Long-Haul

Startups have much to think about in the pre-launch process when they are focused on developing their products and services and stretched tight financially, but in this day and age, when domain names are your storefront and interface between a world of potential consumers, it is important to remember to pick a domain that will be of value as your business grows, even if that means tweaking your company name before you emerge out of stealth mode.

Josh Bourne

Josh Bourne

Managing Partner at FairWinds Partners
A Managing Partner for the business, Josh draws on his experience with brands and blogs on business solutions for the domain name space.
Josh Bourne
How to Pick a Domain Name for Your Startup and Why It Matters

2 thoughts on “How to Pick a Domain Name for Your Startup and Why It Matters

  • March 10, 2017 at 4:36 am
    Permalink

    This article seems to be directed at an US audience, since it mainly refers to Silicon Valley startups that might need a .com or a ccTLD not used in the country code sense. In most countries around the world, the local ccTLD is a viable option for businesses/startups and in most cases has a long history of providing a secure, stable and trusted option for local and foreign registrants. Think of ccTLDs such as .uk, .fr, .nl, .ca and dozens more that have excellent reputations in their countries. In addition to providing a trust anchor, a ccTLD also helps building a relationship with the national target markets.

    Reply
    • May 15, 2017 at 10:16 am
      Permalink

      Thanks for your comment, Peter. You’re correct that we were writing this primarily with U.S.-based businesses in mind. Local ccTLDs can be a great option – or even a preferred option – for locally-focused start-ups in other geographic markets. But for companies with global ambitions, or who are looking to break into the U.S. market, owning the matching .COM name can be an incredibly valuable asset.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *