Coming up with the right name can be key to whether a business or product succeeds or fails. Once you select a name, securing the matching .com is critically important.
Take the case of popular project management platform Clubhouse.io, which is being forced to change its name as another company called Clubhouse has quickly become more well-known. As Clubhouse.io stated in a blog post:
"Clubhouse is a good name. Well, it was a good name, because it's not going to be our name anymore.
For many of you, the reason for this is probably pretty obvious. The Clubhouse Audio App became so big so fast that we couldn’t possibly hope to forever maintain our own brand standing in the face of their popularity."
— Kurt Schrader, CEO and Co-founder of Clubhouse
Clubhouse, the audio app, acquired its brand match Clubhouse.com domain name in the Spring of 2021 for an undisclosed amount of money. Clubhouse.io was then forced to rebrand with no chance of getting the .com and a big challenge of competing for brand recognition.
This was probably not the plan for the project management platform Clubhouse.io. While rebranding is expensive, renaming a company is even more costly. A name change is a sensitive process which must be handled carefully.
It's estimated that small businesses can expect to invest up to $180,000 and six months to change their brand name.
The U.S. Small Business Administration estimates that the average B2B company spends about 5% of revenues on marketing. In that context, the average rebranding costs about 10%–20% of the marketing budget.
Let's assume that Clubhouse.io has an annual revenue of $13M per year and an annual marketing budget of $650K per year. They would expect to spend between $65,000 to $120,000 to transform their company brand.
Worse, mindshare is lost when a company is forced to rebrand: Even after all the work is done, the public will continue to confuse the original name with the new one for much longer.
While the price for the domain sale of Clubhouse.com has not been disclosed, it can be assumed that $65,000 - $120,000 would have bought a great domain name and Clubhouse.io wouldn’t have to go through this process. Clubhouse chose the new name Shortcut.com.