There’s More to Naming a Company After Yourself Than Ego
Posted January 5, 2018 1:28 p.m. EST
If on New Year’s Eve you went to a party featuring Alex Donner’s society band, you had only a 1-in-4 chance of seeing Donner sing out the old and croon in the new.
As chief executive of Alex Donner Entertainment, Donner had four orchestras emblazoned with his name playing that night: two at events in New York, one in Palm Beach, Florida, and one in Paris. But Donner appeared only in Paris, at an event sponsored by a prominent hedge fund manager.
“There are times people come up to me and say, ‘Alex, you and the band were great two weeks ago,'” Donner said. “The truth is, I wasn’t there.”
One of the great challenges for entrepreneurs who name their companies after themselves is serving their customers while expanding their business. What they need to do to grow, and increase their wealth, often requires people to stand in for them. It’s not easy when customers expect to see the person whose name is on the door.
“It’s always very tempting to name a company after yourself,” said Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management. “It is simple. It is honest. And for a lot of entrepreneurs, when they’re starting a new business, it’s the place to start.”
And it has worked. Think of Bloomberg, which serves as the name of not only the company founded by Michael Bloomberg, the former New York mayor, but also a philanthropic foundation and a highly profitable terminal that sits on thousands of trading desks around the world.
Or consider Donald Trump, who before he became president was the head of one of the country’s best-known namesake brands. Nothing he owned, managed or marketed lacked the Trump name, from high-rises and golf courses to wine and water.
Many other namesake companies have become so enmeshed in the business landscape that consumers forget they were once associated with a person: Procter & Gamble (a candle maker and a soap maker), Bose (an engineer), Duncan Hines (a restaurant critic), Doc Martens (a doctor who wanted comfortable shoes) and even institutions like the Mayo Clinic (not for mayonnaise but two brothers).
Donner said he had named his band after himself in the tradition of big-band leaders like Lester Lanin and Glenn Miller, whose orchestra still performs even though he died in 1944.
Peter Thomas Roth, the founder and formulator of a cosmetics company that bears his name, said he had realized when he was starting his company in the early 1990s that it could take a week to come up with a name and two to three more weeks to check with the Patent Office to see if it had already been taken.
He remembered preparing for a trade show and needing a name, so he chose all three of his. He added the product’s ingredients and intended purpose on the label.
“At the beginning, there were no disadvantages or advantages because no one cared,” Roth said.
Occasionally, buyers wanted to meet him.“Sometimes, they’d want me there because I was the face of the brand,” he said. “It didn’t always work. They’d say, ‘Can Peter come?’ I’d say, ‘No, he can’t come to Ohio for a $1,000 order because the airfare and hotel cost more.'”
Early on, Roth learned the extent and limits of having the company named for him. “I can call the head of a company, and they actually take the call,” he said. What he could not do, though, was call the same company’s accounts payable department: “You can’t call a customer to ask for money. You look like a loser.”
For some entrepreneurs, their name is the only logical choice for a company.
Chris Kappler won gold and silver medals in equestrian events at the 2004 Olympic Games in Athens, which topped a career of some 100 horse-jumping victories on the Grand Prix circuit. He now runs Chris Kappler Inc., which helps people select and train horses and teaches riders of all levels in training facilities in New Jersey and Florida.
“If you took myself out of it, there isn’t much to it,” he said. “It’s a service business in a lot of ways.” With a namesake business, problems arise with success and failure. If the company is successful, selling it with your name on it can be difficult — and changing the name can create problems with how consumers identify with the brand.
“All the great things you’ve done to build your brand reside with you,” said Kevin Lane Keller, the E.B. Osborn professor of marketing at Dartmouth’s Tuck School of Business. “In technology, the chief executives and the founders are real important to the brands, the way Steve Jobs was to Apple. But they chose names that allow them to do many different things.”
There’s also the more mundane problem of what happens after an eponymous owner departs. Anyone looking for a job this new year might think of Russell Reynolds or Spencer Stuart, two gigantic recruiting firms named for people who are no longer there. Stuart died in 2011, and Reynolds is running a smaller firm after he left the company that bears his name in 1993.
Keller said savvy entrepreneurs could pivot, even at the smallest level. His dentist, Roger McWilliams in Hanover, New Hampshire, removed his name from the practice a few years ago, and it is now known as Lyme Road Dental, after the street it’s on.
“You can’t sell the firm, otherwise,” said Keller, who takes no credit for the marketing move. “He came up with it on his own. I applauded the move, and it made a lot of sense.”
A name can also saddle others who share it with an association they might not want.
“If you look at a brand like Steinway, that was originally a family name,” Calkins said. “Today, if your name is Joe Steinway, people will think you know a lot about classical music and have this association with you that isn’t true.”
What a name can give a company is a story, which David Aaker, vice chairman of Prophet, a branding firm, said companies needed to get their brand noticed.
“Facts don’t work,” said Aaker, who is also an emeritus professor at the Haas School of Business at the University of California, Berkeley. “People counterargue. They’re skeptical. But if you tell them a story, that all goes away.”
Kappler, the equestrian, used this approach to his advantage. He started riding when he was 9 years old and won Olympic gold at 37.
“It’s helped because people who know me identify me as very methodical with my approach,” he said. “I take my time with the horses and riders. I develop them with confidence, so they’re very prepared to any competition they go into. We’re always thinking long term.” On the negative side, entrepreneurs can hurt their brand with personal mistakes. Several professors pointed to the example of Martha Stewart, who built a lifestyle brand around her aesthetic and perfect-lifestyle choices before going to prison in 2004.
Stewart was convicted of lying about selling stock based on inside information — and not of doing something related to her company — but it was not a choice any lifestyle guru would want to encourage.
“People have secret lives, people are fallible, they make mistakes, and sometimes they’re scandalous,” Aaker said. “Or if you have a founder who is associated with failure rather than success, it’s going to be harder to turn around than a failure connected to a product.”
Personal squabbles become magnified, too. Roth had a run in the New York tabloids during divorce proceedings from his wife, who is also an executive at the company.
Regardless of the growth that entrepreneurs achieve with the namesake companies, they need to keep doing what got them there in the first place: Work. Donner plays about a third of the 150 balls, galas and soirees his orchestras are hired for each year. And he said he called every client to get feedback.
“If there is a small downside to the business, it’s that I have to realize I’m constantly the face of this business, and I have to make sure that I’m always appropriately dressed and handle myself in a professional manner,” he said. “So I have a good time at a party but not too good of a time.”