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Editor’s Note: Our friends at PartnerUp sent over these tips for how to effectively name your startup. (Sorry, it’s no longer enough to be clever!) PartnerUp is an online community that matches founders to cofounders, employees and advisors. Its creator, Steve Nielsen, has written for F|R many times (see list at end). This piece is coauthored with his colleague Megan Dorn.

Writing a business plan can seem like a piece-of-cake compared to the tedious task of creating a company name. It seems like such a trivial component, but so much of a company’s success rides on its name. Starting a business with a weak company name is kind of like driving a car without an engine — it probably isn’t going to go anywhere.

But don’t fret; PartnerUp has put together an A-to-Z guide to deciding on a stellar company name. Bear in mind the following tips and you should be able to find the perfect name for your company.

Acronyms: Be careful when using an acronym as your business name. Acronyms are often confusing and sometimes spell out unintended words.

Back-ups: Create at least two, maybe even three, back-up names for your business. When you go to register the name, your first choice may already be taken.

Competitors: Make a list of the names of your competitors. You can use their names to get ideas, but the main idea is to make sure your name is distinct from the others.

Domain Names: Make sure that the name of your company would also make an attractive domain name. And make sure that domain name isn’t already taken. Continue »

Editor’s Note: Serial founder Tony Wright recently completed a 3-month stint at the incubator YCombinator, where, in November 2007, he and two partners launched RescueTime, which hawks free software to help individuals and businesses spend their computing time more effectively. After successfully launching their consumer offering (7% week-over-week growth!) Tony and his team are preparing to release a version for businesses. They’re also now looking for seed funding. We asked Tony to share with F|R what he learned from the YCombinator experience.

RescueTime is coming up on the end of our formal YCombinator experience, and I thought it would be interesting to reflect on the things we did right and the things we did wrong. It might help future YC aspirants!

For those who aren’t familiar with YC, it’s basically a new kind of funding animal that takes 6% equity in startups that (usually) have barely more than an idea, and generally don’t have a deep background of successful entrepreneurship. In exchange for this, YC offers $15K-$20k in funding (“raman/rent money” as I call it), weekly dinners with Valley luminaries, and a big ol’ Demo Day at the end where you present to hundreds of very motivated investors. Lots more detail is here, and applications for the Summer 08 Session are due by 10pm EST April 2nd (it’s a short app — fill it out!).

I think that applying to YC has been the best decision of my life. A quick word on value: 6% might seem like a lot to give up, as early stage founders, I believe you need to optimize towards your company’s success – not your personal wealth. If YC can improve a startup’s meager chances for greatness by a few percentage points, it’s well worth it. YC’s founder Paul Graham goes into more detail, but in short: I’d rather own 94% of a watermelon than 100% of a grape.

So let me tell you about my unique watermelon… Continue »

Ever lament the fact that you don’t have that coveted Harvard/Stanford/Wharton MBA? Sure, such emblems open doors, but there are plenty of calling cards and networking organizations that can help you get access to marquee investors. In fact, some of these networks have been around a long time — longer even than Harvard.

I recently stumbled upon a post at Paul Kedrosky’s blog under the title Freemasons, and Social Networks in the Markets. In it, Paul asks: “Does being in the right social network mean an easier time getting credit?” (Just guess.) Apparently Paul read an interesting new paper that looked at whether, historically, Freemasons favored their fellow entrepreneurs when it came to funding. (Guess again):

…Using a unique data set of 410 companies quoted on the London Stock Exchange between 1895 and 1902, I find that Masonic managers were associated with greater access to credit in small and young companies whose securities where traded over the counter. These companies earned higher profits, but the effect is not statistically significant. On the other hand, large publicly quoted corporations that were managed by Freemasons did not obtain greater access to credit; they had lower profits and lower Tobin’s Q.

These are turbulent times: Bear Stearns, tough credit, long returns, and everyone worried. A time when everyone is once again, focused on cost. What can we cut? Where are there some savings? Are there any heads we can let go?

My experience is that cutting costs is not that hard. As a consultant, I once had a client ask me to only get paid for costs I could cut. I thought to myself, “This could be my biggest payday yet. I will cut all costs. I will get expenses down to zero.” I didn’t say that and we came to an agreeable compromise but it is a good reminder that cutting costs is not hardest part of organizational transformation – growth is harder. Growth is what makes an organization successful, it is what keeps people in their chairs and it is the hardest thing to do.

Don’t believe me? Here is a scenario that has taken place in a thousand conference rooms in the last three months. Continue »

They’re just throwing darts at a wall. Or worse…

“Oh, Look! Mr. Peepers just picked the very same [startups] your investment software did!”

OK, venture capital may be slightly more sophisticated than this — but I have trouble with VCs who nobly claim that their business has more risk than any other, and in the very next breath hammer you with their big-brained analytics for consistently discovering winners. At least the honest VCs admit they often have “no idea” what will succeed and what won’t.

Consider what Fred Wilson had to say yesterday in response to Silicon Alley Insider’s attempt to handicap the 25 most valuable Internet startups. Fred wrote:

… the idea of trying to determine the most valuable startups is an exercise in futility. Yes, it’s clear that Skype, YouTube, Facebook created a lot of value for their founders and investors… Here’s what is certain, many of the companies they put on their SA25 list will be busts. Many of the companies that don’t make the list will create hundreds of millions if not billions for their founders and investors. [Henry Blodget, editor of SIA] asked me to nominate some of my companies. So I nominated all of them. I have no idea which ones will make us a lot of money and which ones won’t.

Fred admits that if he’d been asked to handicap his firm’s “most-likely-to-make-the-fund” portfolio companies before the last bust — he’d have gotten it dead wrong.

“I certainly would not have picked Mercado Libre. Our whole foray into latin america was turning into a disaster … But here we are, MELI is worth $1.6bn.” Meanwhile, other investments that looked like “sure things” went bust.

I love it that Fred, and other VCs like Josh Kopelman are willing to say they have no idea which of their portfolio companies are most likely to succeed. “Uncertainty is the hallmark of the venture capital business,” Fred concludes. Keep his words in mind the next time you get rejected, or discouraged.

No one knows how these things will turn out, and in that truism lies a font for optimism — if not opportunity.

Widgets are taking social media by storm and becoming a valuable online marketing platform for interaction with consumers. Last June, comScore estimated that widgets reach 177 million people every month, or 21 percent of the worldwide online audience.

ComScore’s tracking methods are debated (see also Techcrunch: “The Widget Kings” and GigaOM: “ComScore Widget Metrix, more like a Jellybean Contest”), but clearly widgets offer an opportunity to create a positive brand experience. Take a moment to review comScore’s latest rankings of the most-viewed widgets (released in January):

Now, what can you do to make sure your widget has the best chance of success? I have some pointers… Continue »

Here’s this week’s list of stories we may have missed, but which you shouldn’t.

1) Why we make misjudgments: On Tues. Mar 25, our friends at VentureHacks did a better job than I did of editing-down Marc Andreessen’s latest opus on cognitive bias, which is based on investor-lawyer Charlie Munger’s theories of “25 key forms of human behavior that lead to misjudgment and error, derived from Mr. Munger’s 60 years of business experience.” Mr. Munger is the longtime investing partner of Warren Buffett. Marc’s essay, The Psychology of Entrepreneurial Misjudgment, part 1: Biases 1-6., is worth reading, but try the VentureHacks version first. You might also want to check out Mr. Munger’s book: Poor Charlie’s Almanack.

2) Ideas/Business Models: OK, it’s becoming a Twitter world. Could it be that now, instead of a Facebook app, you’ll need to write a Twitter app? Do your employees use Twitter? And ask yourself: does your company or business have a Twitter-play? With the access to consumers Twitter offers, it won’t take long for this platform will be monetized, big time. You need to be ready to take advantage. To wit: from blogger-founder Loic le Mur we get this list of 58 Twitter apps. Check it out.

3) Founder profile: And speaking of Twitter, for a glimpse inside a the mind of another role model, read 10 Questions for Ev Williams, from Inc. magazine’s March issue. See also Max Chafkin’s profile of Ev, Anything Could Happen. Or if you’re pressed for time, our crib sheet of it, published Mar. 26: Do as Ev Says, and as Ev Does.

4) And related: reread Ev Williams’ magnum opus, dating from 2005!: Ten Rules for Web Startups .

5) How to be sticky: “If you want to succeed, you need people to remember and act on your ideas. For instance, if you are a leader, you want people to catch your vision.” F|R wrote on this very topic in November, but this week Life Optimizer published a great summary of Stanford Professor Chip Heath’s book: Made to Stick: why some ideas survive and others die. It’s written with his brother Dan. Read this post, and you don’t have to buy the book!

Recession, recession, recession. As if founding isn’t hard enough! We’ve written recently about how you can prepare yourself for an especially difficult year in the marketplace, and even about how such challenges can be good for startups. Still, it’s going to be a tough slog. Looking into the weekend, I thought we could all use a little inspiration. Here are a few historic thoughts on the strength, benefits and beauty to be found in the challenges you face every day as a founder:

“Adversity has the effect of eliciting talents which, under prosperous conditions, may have remained dormant…It is courage, courage, courage, that raises the blood of life to crimson splendor. Live bravely and present a brave front to adversity.” — Horace

“Every adversity, every failure and every heartache carries with it the Seed of an equivalent or a greater Benefit.”
— Napoleon Hill, Think and Grow Rich

“When we long for life without difficulties, remind us that oaks grow strong in contrary winds and diamonds are made under pressure.”
— Peter Marshall

“All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… . You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.” — Walt Disney