There are a million reasons why your startup should rebrand. In fact, the chances of coming up with the perfect name for your startup on the first try are so low, you’re more likely to IPO in year 3 (even Facebook had to drop the ‘The’). Whether you face potential IP issues, can’t secure yourname.com, or your name no longer makes sense following a recent pivot, this is the guide to help you navigate the rebranding process.
Here are some of the most common reasons why startups choose to rebrand:
Less Than Ideal Domain Name:
“If you have a US startup called X and you don’t own x.com, you should probably change your name...” - Paul Graham, Change Your Name
Does your domain name have a hyphen? Though this may not create massive SEO losses for you (this is debatable), it may be more difficult to market via word-of-mouth. Saying, “head to yourname-dot-com” versus “head to your-hyphen-name-dot-com” is undoubtedly easier to articulate and remember.
If your domain name doesn't end in .com, this doesn’t necessarily spell the end for your company. In fact, Google has come out recently and stated that, as far as SEO goes, they will treat new domain name endings like .ninja and .io the same as traditional domain name endings like .com and .net. That said, as Paul Graham states in Change Your Name, “[a] marginal domain suggests you're a marginal company...having x.com signals strength even if it has no relation to what you do.” So while there may not be a direct detriment to your business having a gTLD domain, owning a .com domain inherently creates a stronger sense of trust and quality in the customer’s mind.
Name Doesn’t Pass the Radio Test:
Having a name that doesn't pass the radio test also doesn't doom your startup. We can all come up with examples like flickr or tumblr that violate this rule yet still draw millions of unique visitors to their site each day (though, flickr just recently bought flicker.com and now redirect this domain to flickr.com - showing that even if you have the branding down, you may still need to cough up the dough if your name doesn’t pass the radio test). However, like Paul Graham boldly says, your name sucks. Get over it, and rip the bandaid off before it becomes even stickier.
Intellectual Property Issues:
Reasons like intellectual property, however, are immediate grounds to change your name. However as usual, just because you have the same name as another active company doesn’t necessarily mean that you need to rebrand. For example, in the show Silicon Valley, Richard would have legally been able to name his tech startup Pied Piper even though there was an irrigation system company with the same name, because they are in completely different industries and the average consumer would not be confused. Check out the USPTO's trademark knowledge base for tips to determine how protectable, unprotectable, and/or illegal your name is, and consider speaking with an attorney if you have any remaining questions. If you and your attorney determine that there is a possible violation, you should probably change your name (or try reaching out to the original owners and ask for permission or make an offer... nothing to lose, right?).
Realign with Pivot:
We’re strong believers that pivots are generally a good thing. If your startup recently changed directions or switched industries, it’s a sign that you’re learning, not-stubborn, willing to do whatever it takes, and more likely on the right track - or at least on a better track than you were before. If your startup undergoes a major pivot, this can be the perfect time to rebrand. Not only can it save you headaches down the road, but it will help signal to your existing fans that you are no longer who you were before. It also provides an opportunity to relaunch all over again to new audiences, incorporating the lessons you’ve learned from the first launch.
Start From Scratch
Sometimes it just makes sense. Perhaps your app has been banned from the app store, or perhaps you’ve learned so much about branding, startups, and your industry that you think you can do better in round 2 (hopefully, the latter). Whatever the reason is, it’s up to you as the founder to make the call.
Cons of Rebranding:
Anybody who has been through the process of rebranding will tell you that it is a challenging, yet rewarding process. Like many of the things we do as entrepreneurs, it can also be quite risky (but then again, so is every decision we make, including the decision to not rebrand). Rather than exhaustively list the potential downsides, I’ll instead urge you to consider what these are for your startup, and to weigh them against the upsides. Also keep in mind the cons of choosing not to rebrand, both in the near and long term. You never know, a $5,000 rebrand now could save you $500,000 in legal fees down the road.
While it’s possible to rebrand on a budget, it’s easy to spend a lot; while you may be one of the few bootstrap ninjas that can do it for free, it’s still going to take up a significant amount of your time regardless. We set a budget of $5,000 (not including labor) before getting started and stuck to it. Some companies have spent less and succeeded, while others have spent far more and failed. That being said, we think that $5,000 is a good budget for an early-stage, seed-funded startup.
Here’s a list of some of the larger, most common expenses:
A domain name can cost you anywhere from $10 to $10M. To give you an idea of the range, we bought lawbstr.com for $10 (just for fun), spent $1,780 for LawBooth.com (#ftw), and turned down an offer of $750k for congo.com (because, really?).
Federal trademark: $1500+ (if your startup engages or plans to engage in interstate commerce, otherwise you can file a trademark with your state, which is significantly cheaper).
Incorporation: Usually about $100 to $250 in filing fees plus about $500 to $1000 in lawyer fees if you choose to hire an attorney (you can get away with a D.B.A. (doing business as), but may want to consider updating your status instead).
*If you decide to go the DBA route, you can update your legal documents simply by defining any pronouns related to the company, the old company name, or any other reference in the header as being the new name. For example, our Terms and Conditions still say “This website is a service made available by Congo LTD [our legal entity] (the “Company”, ”Got.Law”, ”us”, ”we”, ”our”).” Once you’ve done this, just run through the document and be sure that any pronouns or references to the company are covered with this header.
Similar to the domain name, there is a wide range for what you can spend on a logo. At first, we tried going the free route - just typing the logo out with a nice font (we chose Proxima Nova Soft Bold), adding a sweet icon, and putting the white text on a nice blue background. Personally, I thought it looked decent, but the team wasn’t satisfied. Ultimately, we decided we were willing to spend up to $1,000 on a logo that we loved and that looked official.
Webpage Design (Optional):
In total, we spent $2300 redesigning two pages: our homepage for clients, and our homepage for attorneys. While this ended up being our largest single expenditure in the entire rebranding process, we’re confident that it was worth every penny. It’s important to note that this step is optional, but it can yield powerful results if done well. If you’d rather not commit to a full redesign, but still want a fresh look to match your new name, a good compromise is to update your brand’s style guide (ie. change the colors, fonts, and design themes that permeate your website and promotional materials).
If you decide to hold a contest to come up with your new name (we highly recommend this route), then you’ll need to include the reward in your budget projections. We went with a $1000 reward and only considered names for which the .com was available for less than $3,000. This yielded us a little over 700 quality submissions as well as over 28 million potential media impressions, so well worth it in our opinion. We think $1000 is a perfect reward, and while we haven’t conducted any other tests, it’s safe to assume that a larger reward equals more entries.
Hopefully you didn’t order a thousand business cards two weeks before deciding to rebrand like we did.* If so, take whatever you just spent, and add that to your budget.
*Pro tip: hang on to your old business cards - they’re still useful for entering the ‘free lunch contests’ at your favorite restaurants.
Swag is an important startup asset that can help unite your team and make your conceptual idea a bit more tangible. Once again, take whatever you spent on swag last time and add it to your budget. Don’t throw away the old swag, that stuff will be priceless and vintage when you hit it big :)
*Pro tip: It’s better to spend $1000 on quality swag that people will actually wear than $500 on swag that nobody will wear. Spend extra to get the t-shirts with the nice, soft fabric (we recommend a tri-blend fabric).
Ads/Promotional Materials/Graphic Designs:
Every advertisement, social media post, or any image file with your logo in it will need to be updated. However, there’s a good chance that you’ve come a long way since designing these assets anyway, and the need to replace the logo could provide some much needed motivation to redesign these materials from scratch. Hopefully you have someone on your team who knows their way around photoshop and/or illustrator, but if not, gather up all of your design files, as well as your new logo, and hire a low-priced designer on Odesk.com or 99Designs.com to switch out your logos and/or update the style.
SSL Certificate: $100
If you already have an SSL certificate, great! Just make sure you understand the steps involved in transferring your SSL certificate so you can plan accordingly. Also, remember to create redirects for both "http://olddomain.x" AND "https://olddomain.x" to your new site so users trying to access "https://oldomain.x" don’t encounter a website security warning.
Have you spent any money on SEO? While a 301 redirect can help preserve most of your website’s domain authority and trust flow, your new site’s rankings may suffer simply because it’s new. While the time and resources you’ve invested in your original name will eventually be passed on to your new name, it’s important to consider the impact that a temporary dip in your rankings could have on your business.
Time is often your most valuable resource while running an early-stage startup, and you should always be asking yourself the question, “What is the most valuable thing I could be doing with my time right now?” This may or may not be rebranding, but keep in mind that if you do decide to rebrand, it is going to require a major time commitment from one or more team members. If you decide to take the plunge, be prepared to commit at least half of one executive team member’s time for one month. If you can’t commit to this, consider taking a more lean rebranding approach.
Equity Trade For a Domain:
If you are dead set on keeping your current name, but the owners are asking for a ridiculous amount of money for it, you can always offer the domain holder some equity. The most popular example is Mint.com, who picked up their valuable four letter common-word domain for a small portion of their company, which ended up being worth ‘a couple million dollars’ to the original owners 2 years later. This is a great alternative to dropping big cash on a domain, but be sure that your shareholders are on board and you don’t give up more equity than the domain is worth.
*Pro tip: Offer the owners of the domain a risk free deal: if your startup fails, they get their domain back, but if your startup succeeds (you’ll need to mutually define success and failure), they get x shares - that way everybody wins!
Another option is to reach out to someone in the stealth acquisition field to handle the negotiations. Due to the recent rise in entrepreneurship and interest in startups, many domain trolls are under the impression that every startup has millions of dollars in the bank and will make offers based on this belief. We had a really cool guy by the name of Mike McConville reach out to us and explain the stealth acquisition process, which is just about as cool as it sounds. Basically, you hire a broker to purchase the domain so that your company’s name isn’t involved. This is especially useful for companies who have just raised a major round that garnished a lot of press (because inherently, the owner of the domain will bump up the price for the domain if they think you have a lot of money).
Lease the Domain:
You could also look into leasing out the domain and buying it down the line. Getting a contract in place early prevents the domain holder from inflating the price once you can afford it, while also allowing you to operate under the new domain at a hugely discounted monthly rate in the meantime.
Stick It Out:
The final option (and arguably the most tempting for entrepreneurs) is to ignore all the warning signs and stick with your original name. Segment.io, for example, was able to stick around long enough to afford Segment.com. If you find yourself going through this thought process, at least read Paul Graham’s Change Your Name one last time before pushing forward.
I’ve always been fascinated by successful rebrands. For example, did you know that Google was created under the name BackRub? Other successful rebrands include: Quantum Computer Services to AOL, Research in Motion to Blackberry, Computing Tabulating Recording Corporation to IBM, Blue Ribbon Sports to Nike, and the list goes on and on.
For every successful rebrand story, there are a dozen failures. Some of the more noteworthy failures include Netflix to Qwikster (fortunately they turned back before it was too late), Comcast to Xfinity, and Radio Shack to ‘The Shack.’ Plan carefully, seek guidance from advisors, and make sure that you don’t follow in the above company’s footsteps. If your rebranding push is less than successful, don't be afraid to either return to your original name or start over to find something new.