Short and Sweet Seen as Key to Startup Success - East Idaho News
Business & Money

Short and Sweet Seen as Key to Startup Success

  Published at

getty 021715 techstartups?  SQUARESPACE CACHEVERSION=1424177393821Oli Scarff/Getty Images(CAMBRIDGE, Mass.) — What causes so few startups in Silicon Valley to grow and prosper and 90 percent of them to wither away on the vine?

It certainly has to do with more than dumb luck, as Scott Stern, Massachusetts Institute of Technology study author, and his team, analyzed the success and failure of startups in Menlo Park, Mountain View and Palo Alto.

The benchmark for success was whether a firm either achieved an IPO or was acquired six months after being created.

After analyzing data for a 10-year period that went as far back as when the companies were first founded, Stern and his colleagues learned three important points, one being the fairly obvious fact that operating in a region linked with “high quality” ventures was certainly an advantage.

However, the other two things that stood out seemed almost trivial. The more successful firms tended to be those with names containing three or fewer words and businesses not named after the founder.

This would explain a study from the career site TheLadder in which workers make higher salaries at places with shorter first names. Stern goes on to say, “Firms are looking for names that are easy to remember, that will come up in a search. If you have a smaller number of letters and you’re missing a vowel, you will have that distinctive search pattern.”

However, Stern says what separates the winners from the losers has to do a bit more than with just names and locations. He adds, “It’s that ambitious startups with ambitious founders tend to do the things that the ultimately successful companies do…so that those choices make sense in their overall business plan.”


Copyright © 2015, ABC Radio. All rights reserved.

SUBMIT A CORRECTION