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Start-up Advice

Trademark Your Business Or Suffer The Consequences

Your business cannot do without a trademark in today’s competitive environment. Here’s why.

Kyle Torrington

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Generally speaking, trademarks serve to protect the exclusive use of your company name, slogan or logo.

A significant number of business owners think that because they have registered a company and reserved a company name with the CIPC, their exclusive right to the name is ensured. The short answer is that this assumption is incorrect. Reserving a company name with the CIPC does not necessarily mean that you have the exclusive right to use that name.

This article seeks to provide you hard-working entrepreneurs and business owners with a better understanding of what a trademark is, why it is needed for your business, and some of the incredible, but not particularly well known, benefits of having a registered trademark.

Related: 5 Common Legal Mistakes Start-Ups Make – And How To Avoid Them

Know the difference: Trademark versus Reserving

Following on from the company name example above, the register of company/business names and the register of trademarks are two completely separate registers.

For example, Darryl, an enterprising serial entrepreneur, decides to reserve his company name ‘Darryl’s Delightful Doughnuts’, and thinks that because he has reserved his company name, nobody else is entitled to use that name or anything similar. Darryl is wrong.

Darryl doesn’t realise that another Darrel from another province, who has decided never to incorporate his company, but rather to remain a sole proprietor, has registered a trademark for the name ‘Darrel’s Delightful Doughnuts’, and has been trading for five years longer than our Darryl.

What happens years later when the businesses learn of each other

After a number of years of trading, with both businesses growing, Darryl and Darrel eventually learn of each other, and both try to prevent the other from using their respective business names.

Although there are certain exceptions in terms of the law of trademarks, such as honest concurrent users, generally speaking, Darrel, with the registered trademark, and who had been trading for a longer period of time, is principally entitled to use of the name, and could forcibly prevent Darryl from using his version of the name.

What becomes apparent is that when reserving your company name, also do a search of the trademarks’ register, and file for a trademark to avoid suffering the fate of poor Darryl.

Prevent others from cybersquatting by using your brand name

By submitting a registered trademark to the international Trademark Clearinghouse, when a new domain is registered that incorporates your registered trademark, the Trademark Clearinghouse will warn the person attempting to register your domain that it is the subject of a registered trademark, and will also send you a notification informing you that somebody is trying to register a domain containing your trademark, allowing you to take action, and prevent the registration.

Related: 10 Steps To Starting Your Business For Free (Almost)

1. Licensing of a trademark

Let’s assume that our Darryl did not have an issue with Darrel, and had a registered trademark. Darryl’s Delightful Doughnuts has been growing substantially, to a point where he now wants to franchise the business, and to use distributors and agents to distribute his delightful doughnuts.

One of the primary enabling mechanisms that will allow Darryl to franchise his business effectively, and to allow agents and distributors to utilise his branding, is through the licensing of his trademark, with or without a fee, to his franchisees, distributors and agents. 

2. Security for a loan

In building out his franchised business, Darryl also needs to purchase fancy new head offices, for which he does not have the cash flow as yet to purchase himself. Guess what? Darryl’s registered trademark comes to the rescue once again, and can be used as security when applying to a bank for a loan to fund his office expansion.

His trademark has effectively become a standalone asset with intrinsic value, and is not merely regarded as goodwill as would be the case with an unregistered trademark. 

3. Google AdWords keyword poaching

I have touched on this topic briefly in a previous article, but it is worth canvassing again due to our ever-growing dependence on pay-per-click advertising through Google AdWords.

Darryl’s Delightful Doughnuts has now been growing exponentially for the past five years, and is well known to a large number of people in South Africa. Eric decides to start up his own business, ‘Eric’s Emphatic Doughnuts’, but feels he would be better suited shortcutting the growing process by leveraging off of the success of ‘Darryl’s Delightful Doughnuts’.

When Eric creates his Google AdWords campaign, he decides to use the keyword ‘Darryl’s Delightful Doughnuts’ to show his, Eric’s, advert.

Because of the high online search volume of ‘Darryl’s Delightful Doughnuts’, Eric’s doughnut business skyrockets, to the despair and dismay of Darryl, who has suddenly lost a significant amount of business due to Eric’s actions.

Restitution options

There is, however, some hope for Darryl, in that Google has a neat utility in which registered trademark owners who are the victim of such ‘keyword poaching’, are able to submit their registered trademarks to Google, which will then remove the offending keyword from the competitor’s AdWords campaign.

This remedy is one that is unfortunately only available to holders of registered trademarks.

I hope that this has given you a better grasp of what a trademark is and how it functions as an effective tool in growing your business and protecting your legitimate interests.

Kyle Torrington is the co-founder of Legal Legends, a company that aims to revolutionise the legal industry by being Africa’s first eCommerce website for quality legal services aimed specifically at start-ups and entrepreneurs

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Start-up Advice

Selling To A Corporate: The B2B Battlefield

If you can apply some of these, you may be able to stop your hair from going grey or halt that premature baldness more effectively than me.

Jordan Stephanou

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So you’re running a start-up that targets corporate clients. All you need is a few corporate signatures on that paper, and all of a sudden you’ll have a sky-rocketing business with an exciting guaranteed revenue stream every month, right? Right… But it’s not quite that easy.

Maybe you decided against a B2C (Business to Consumer model) because the marketing spend to win over one consumer at a time was not worth it, or that the South African consumer market is not big enough in your industry, or that it’s better to get 10 paying corporates rather than a million paying individuals. You’re not alone, and you’re not wrong.

Both models have their major pros and their major cons. Trust me, I know. But here are some of the learnings I’ve had by pursuing the B2B model.

The pitch: Anything other than a resounding ‘yes’ is likely a ‘no’

First step is to get the pitch. There is a huge temptation to go about it as passively as possible, hoping that the deal will fall in your lap with a well written email. Reality is a little different however. To secure most pitches, a combination (or all) of in-person approach, phone call, linked-in message and email could be required. Once you’ve secured the pitch, book it in both parties’ calendars and hope that there’s no last minute cancellation. The exciting part awaits.

Related: Beauty Of Failure: The Art Of Embracing Rejection

The sad fact of human nature is that people don’t always say what they mean, or mean what they say. Possibly it’s because we don’t like to hurt each other, or it’s because we avoid uncomfortable discussion as if it’s the plague.

Whatever the reason, it’s quite rare to receive “hard no’s”. The reality is that after a pitch, anything other than a resounding yes, or a “when can we start”, or “where can I sign?”, is likely to be a soft no; they have no interest in doing business with you. The entrepreneurial spirit is one that looks at the positive in everything, so it could be very dangerous for a glass half-full entrepreneur to receive a soft no, because this person will very much believe the deal is still alive.

Once again, trust me, I know. I recommend tempering the enthusiasm by looking out for any sign of an excuse during the pitch, and addressing it then and there. You know how hard you worked to get that meeting – so make sure you leave with no question unanswered, knowing that you did everything you could to win that business, or learnt everything you could to enhance your product, service or pitch to win future business. If you don’t get their business, it just means you didn’t get their business right now. Extract the positives and move forward.

1. Balance patience & momentum: They don’t operate like start-ups

It’s often said that a corporate is the most important thing to a startup, but a startup is far from the most important thing to a corporate.

As start-ups or SMMEs, we just have to accept that. Where we would respond to an email in a heartbeat, it may take our corporate contact 2 weeks to respond; especially if they are decision-maker. They don’t need our business, but we need theirs. As such, it’s important to remember when following up on a successful pitch that they are big, they are busy, and they have multiple balls being juggled at once. It’s likely that our proposition is the least important to them, and may be seen as a luxury.

Remember, they didn’t pursue you, you pursued them. So we have to be patient. But this is the difficult part; we have to balance patience with the desire to keep momentum. It’s an oft-said phrase that “time kills deals”. As start-ups, we need to be respectful that our prospective client is busy, but also very direct and honest with them in terms of our position and our goals and objectives.

If we are direct about when we want to conclude a deal and why, it could scare them away, or it could lead to them prioritising the deal as a priority. Either way, it’s better to know where you stand rather than have something drag on in that mythical pipeline for months or years as false hope.

2. Their emails are not their priority

emailsAfter the pitch, it’s easy to get in an unhealthy pattern. That pattern could look something like this: Send follow up documents directly after the pitch; hear nothing back from the prospective client; send a follow-up email the following week; hear nothing back; send another follow-up email the following week; hear nothing back; send another follow-up email the following week etc. into perpetuity until you go crazy and re-apply for your old job.

I have learnt that busy decision-makers in the corporate environment don’t just sit at their desk all day reading and responding to emails. They’re on the move, in important meeting after important meeting, flying to London followed by a quick trip to Doha and then 10 days in New York. They’re not setting the wheels in motion in response to your proposal in that spare 30 minutes in the airport.

Related: 4 Social Media Tips For B2Bs

As such, when they are available, you need their full attention and you need to get them to commit to the next step. Either a phone call or in-person visit is effective with this. Getting through to them and asking them the difficult questions about the next step is the only way to be top of mind, and to find out if they are serious about this deal or not.

From my learnings, I recommend emails as secondary to the phone call as a way of confirming what was discussed over the phone in terms of next steps.

3. Improve the product / service – become irresistible

With all else said, there is only one way to consistently increase chances of getting a deal over the line. That is, simply, have an incredible product or service that solves a real problem. If you have pitch after pitch where the response is luke-warm, you should ask them before leaving “what would this product have to do / look like for you to sign up right now?”.

Once you’ve had a few meetings like this, you will understand exactly what your market needs. If you build that product or service that the market craves, you’ll be turning away clients because the demand for your business will be so high. Become indispensable. Build something so good that your clients would be crazy to say no to.

4. Build a pipeline

Your business should never rely on one client saying yes. Putting too much emphasis on one deal will make you desperate, and desperation is the easiest way to scare someone away – relationship, business or anything else. Your market should be big enough that a rejection here and there is water under the bridge and simply a learning.

Closing one deal will provide a proof of concept and credibility that can be leveraged to close the next deal. Each subsequent client should, in theory, be easier to win than the previous one.

Finally, if the product or service is constantly being enhanced according to the market’s needs, if there are enough clients in the pipeline, and if the follow-ups after a great pitch are being done effectively, deals should go through systematically. At the end of the day, closing a deal shouldn’t feel like hard work. The best way to win business is by building a great business that solves real problems.

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Start-up Advice

How to Name (Or In Some Cases, Rename) Your Company

Naming a company is hard, and founders often get it wrong.

Jason Feifer

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Jennifer Fitzgerald is co-founder and CEO of Policygenius. But in 2013, when her company was starting out, it had a different name: KnowItOwl.

“We thought it was a clever play on the term know-it-all,” she says. The company helps consumers find the right insurance policy for them, so she wanted a name that suggested wisdom and guidance, with a friendly animal like the GEICO gecko.

“Then we started talking to investors, engaging our first users and talking to vendors and insurance company partners, and we just kept having to repeat the name — spell it, explain it. Pretty soon we were like, We’ve got a problem.”

And it’s not an uncommon problem.

A name is one of the biggest early decisions a company founder will make, and many get it wrong. Best Buy was first called Sound of Music. Nike was Blue Ribbon Sports. Google was BackRub. Each was a mistake in some form — too narrow, too generic, too evocative of the wrong thing. (BackRub?) For Know­ItOwl, the problem was being too clever.

Related: The Do’s And Don’ts Of Naming Your Business (Infographic)

So how should a company pick a name? Fitzgerald did some research and came up with this process.

Step 1: The big name dump

Fitzgerald created a shared Google Doc for her five-person team and over the course of a few weeks sent out prompts to focus people’s creativity — asking for portmanteaus (like Microsoft, the merging of microcomputer and software), names with numbers (like Lot18), themes like references to trees and more.

Step 2: Structure brainstorming

One Saturday, she invited friends in the branding and marketing industry to join her team for pizza, beer and what she calls “structured group brainstorming.”

She’d put up a word that related to her business — say, protection. Everyone in the room had 10 minutes to write down 10 protection-related names.

Related: What You Need To Know About Naming A Start-up

Then they’d pass their list to the person to their left and take seven minutes to create seven names inspired by the other person’s list. They repeated this a few times.

Step 3: Cut the crap

Between the Google Doc and the brainstorming, they had hundreds of names and started eliminating them in phases.

First: “Can you imagine saying your company name to a Wall Street Journal reporter?” That wiped out many. (Bye, “Harmadillo”!)

Then they nixed any similar to competitors’, names that could come off as unintentionally wrong (a classic of the form: Pen Island) and names they couldn’t get a dot-com domain for.

Step 4: Judge by colour

The surviving names were evaluated based on various criteria, including brevity (shorter is better), evocativeness (does it convey meaning?) and searchability (is it unique enough that when searched for, it won’t get lost?).

Related: Checking the Availability of a Company Name with CIPC

Each criterion was marked as red, yellow or green. The name Policygenius, say, got a yellow for brevity. Too many reds meant elimination.

Step 5: Test people’s memories

Will people remember a name? Can they spell it, if they hear it? To test this, the team recorded someone saying the finalist names, posted the audio to Soundcloud, and embedded it in surveys that they paid $2,000 to have sent to 1,000 people.

They also asked respondents to write down any emotional associations the names created z- “just to make sure nothing was offensive or conjuring up any emotions we didn’t want to conjure up,” she says.

After this, Policygenius had its name. It now employs 130 people and helps a million people each month find insurance, either through its service or content — success that (ahem) owl started with a great name.

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

How To Develop A Unique Brand Name In A Global Marketplace And Protect It

A helpful How-to-Guide on developing a unique brand name and conducting trademark searches.

Julian Diaz

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As a marketer, I know just how important it is to choose the right name for a company or product. It needs to be easy to spell and pronounce (in various languages if you’re going international). If possible, it should have some positive connotations (definitely no negative ones) that can be associated to your company or product. And above all, it must be distinctive and unique.

The question is how do you work out what is unique, beyond a URL search, and then how to protect it? The answer is trademarks. I know what you are going to say…

Do I really need to worry about trademarks?

Yes, for two reasons.

  1. You might be a small business already trading under a name that already exists in the market. And maybe the other company that has trademarked that name in your industry classification won’t ever issue you with a cease and desist letter when you enter their market, because they are nice people and just don’t feel there’s any harm in letting a company by the same name trade in their market. Or maybe they do. It’s a decision that is totally out of your control. Do you really want to take that chance as you build a global brand?
  2. You’ve invested tonnes of money into building your brand in your market and then all of a sudden another company enters the market with the same name. Trademarking your name protects your brand from being copied or from another company riding the wave of your brand awareness you’ve invested so much into building.

Trademarks are important if you want to build a brand on a solid foundation and protect it in the long-term.

Related: When do I register a trademark?

How hard is it to successfully trademark a name?

According to the US Patent & Trademark Office, there have been 182,000 trademark registrations and 312 000 applications in the past 5 months alone. That’s more words than there are entries for in the Oxford Dictionary!

You can imagine how hard it is, and how much harder it gets with each passing month, to dream up a name for your product or company that is unique and distinctive enough that it can be successfully trademarked and protected in large markets like the US or Europe – especially in the technology industry. But there are a couple of routes you can try when developing a new name if you find your chosen one is already trademarked.

How to come up with a unique company name

When coming up with a company or product name, you can either go with:

  • an acronym (IBM, SAP),
  • a family or person’s name (Ford, Dell)
  • an existing word (Amazon, Apple, Salesforce)
  • a misspelled word that looks or sounds like an existing word (Xero, Google), or
  • a completely new word either made up of a combination of existing words (PayPal, Instagram, Accenture), or
  • a completely new word entirely made up (Skype).

Related: (Infographic)Top 10 Reasons To Rebrand Your Business

How to make sure it’s available

Try Google first. If you don’t get any companies coming up that are using that word as a name in your industry, you’re off to a good start. Keep in mind that even if another company does come in the results, it doesn’t necessarily mean they’ve trademarked it.

Check the national trademark search database for the country or countries you want to trade in and search for your name within your industry classification:

If you don’ t come across any trademark registrations for that same word in our classifications, then contact a trademark attorney to conduct a more thorough search using their local experts in those markets and advise you further. You don’t need to work through an attorney as you can register a trademark yourself, but working with one can save you a lot of time and increase your chances of getting your registration through the first time.

In conclusion, some advice

My advice to any company already operating and with ambitions to grow globally is make sure your brand name is trademarked and protected.

If it is not, you should

  • conduct your own search in any of the national IP or trademark offices’ databases (some of which are listed above, others can be found through a simple Google search);
  • hire a credible trademark attorney to either register your name or advise and guide you along the process of registering a new name.

Related: What You Need To Know About Naming A Start-up

If you MUST change your businesses name, then

  • hire a brand development agency for the creative process of developing the right name for you. (We didn’t do this but only because we had no idea how time consuming and difficult it would be. Although it worked out well in the end and we love our new name, it did take up a lot of time and perhaps more importantly “headspace.” I could have been focusing on other pressing things requiring that required this level of strategic thinking or creativity;
  • hire a change management agency or consultant to help with the communication and roll-out process of the new name to all stakeholders: staff, partners, customers, and the market. We managed well on our own, but if you don’t have the internal competency for this, or the time, rather outsource this very important and often neglected step;
  • and finally, just pray to whatever god(s) you believe in that whatever name you finally come with gets the green light from stakeholders and your trademark attorney. (Yes. Seriously.)

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