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Friday, 20 June 2014 6:25

How RadioShack and Kayak Have Nothing in Common

By - Michael Rader

If I asked you what the companies RadioShack and Kayak have in common, apart from their pleasant rhyme, what would you say? You likely would struggle to come up with a common attribute between an electronics company and a travel website. The biggest difference has nothing to do with their products; it involves their name. One company chose a name that although appropriate at the time, has now shackled them to an obsolete concept. The other company chose a timeless name that will allow them to grow and transform when required, a name that will continue to keep them at the top of their industry.

Choosing a name is one of the most important decisions a business can make. Not only does a name allow customers to make connections that create brand recognition, the name also gives the company its identity. A good case in point is RadioShack.

Two brothers who envisioned a store that would supply the needs of radio officers aboard ships, as well as provide equipment for amateur, or ham radio operators, established RadioShack in 1921. The name “RadioShack” was taken from the term for a small, wooden structure that housed a ship’s radio equipment. At the time of the company’s inception, amateur radio operation was a thriving recreational pursuit. The brothers recognized this, and tried to capitalize by connecting their business directly to the activity. Unfortunately, amateur radio operation has become all but obsolete, as has the market for individual radio parts. As such, RadioShack has found a name that is stuck in the past, and has lost any clout in its once applicable and attractive name. Most people now have no clue what a radio shack (the wooden housing) is and now associate the name to what they do know. Today, we look at the name as these two items:

  1. A Radio – A devise that broadcasts sound programs to the public
  2. And a Shack – A roughly built shelter

For similar reasons that CircuitCity when kaput (because almost nobody needs circuits anymore), RadioShack is in decline because almost nobody needs radios anymore, especially from a shack of radios. Now, CircuitCity may have pivoted to sell more modern items and RadioShack may have moved on to offer cell phones and computers but they can’t escape their name. Not only is their name now misleading but also very obsolete and old-fashioned.

Your name is the door into your business but it should not serve as the description of your business. Apple can expand, pivot and change its business model without ever having to change its name, or go out of business for not changing it.

As the name RadioShack recedes further into the past so does it’s company. In fact, the company reported operating losses of $81.0 million for the first quarter of 2014. Losses for the same period last year were $10.3 million. The company’s stock has plummeted, leaving it with few options. The company recently announced plans to close up to 20% of its stores in a last ditch effort to avoid bankruptcy.

RadioShack, if you’re reading this, I strongly urge you to change the name of your business if you want to regain what you once had. Nobody wants radios from a shack anymore; they want sleek and modern devices from a brand name that is cool, clean and timeless.

Kayak, on the other hand, has enjoyed a great deal of success since its inception in 2004. The travel website currently processes over 1 billion queries annually, and its mobile app has been downloaded 3.5 million times. The original company was acquired by the Priceline Group in 2012 for $1.8 billion. What makes Kayak so special? In addition to providing consumers with a quick and easy way to compare travel prices, the company also chose a name that has positive and timeless implications. As a result, Kayak has a bright future and has insulated itself against the same fate that has befallen RadioShack.

Not only does my grandpa know what a kayak is but so does my 9-year-old niece. It is a symbol of fun, excitement, and adventure for all. Even among those that don’t personally kayak, the activity is associated with freedom and serenity. Is there a more serene scene than someone leisurely kayaking down a tranquil river on a beautiful summer day? The kayak represents the splendor of nature and man’s ability to commune with it. Although the sport may be improved upon or transformed, it will never become obsolete.

The name is as old as it is new. The Inuit, an arctic people, created the first kayaks. The equipment was primarily used for hunting, which it still is in some parts of the country. The middle of the 19th century saw kayaking take on a more recreational identity and kayaking clubs began popping up all over the country. In 1936, the sport was added to the Olympics. Since then, the composition of a typical kayak has changed, but the sport has remained the same. As long as there are bodies of water, people will kayak within them. It is an ageless name that will carry the same implications in fifty years as it does today. Unlike the radio, the kayak is here to stay.

The founders didn’t choose a name that described their product, nor did they choose a name that is contemporary. They chose a name that has positive connotations to almost everybody and one that is closely associated to traveling and vacationing, which is what their service is all about.

RadioShack and Kayak are two very different companies. Not only are their goods and services vastly dissimilar, their trajectory is also divergent. One company has a very bright future ahead of it, and the other is treading water just trying to stay afloat (ironically, it’s not the kayak). Choosing a name that is currently relevant is not important and should actually be avoided at all costs. Changes in the industry must always be taken into account. If the product highlighted in a company’s name becomes obsolete, it stands to reason that the company itself would falter. Choosing a timeless name, like Kayak, insulates the company against future changes and innovations. Finding oneself chained to an outdated name is a hopeless feeling. Fortunately, Brandroot offers names that are not only creative and innovative; they also possess the timeless nature that companies need. Let us help you not only launch your business, but also keep it successful.

Last modified on Friday, 20 June 2014 6:54

Michael Rader

With over ten years in web development and design, Michael Rader has expertise and technical know-how. But more than a skilled technician, he is an entrepreneur and innovator who helps startup’s and new businesses identify and define their future with a unique, brandable business name. Michael Rader is the founder and CEO of Brandroot®, a leading .com domain name marketplace. He currently lives in Kailua-Kona, Hawaii where he operates the business and authors a blog dedicated to naming and brand name establishment.