A name has had an important place in our world. Much more important than most people realise. A young startup spends meaningful time coming up with a name that resonates with the mission. The name is the identity, it defines its purpose and the direction it might take in the future.
For existing and potential customers, a name is part of how they interact with its product. It captures their attention and rubber stamps the image of the company in their minds. Think of this, the name Colgate will always evoke an image of a toothpaste in our minds, the name Tesla will almost always do the same for an electric car.
But for established businesses and large corporates with a ‘name’, who already have multi-billion dollar revenue streams, would you risk changing the core of your identity with a new name? And what is in the name anyways?
Into the metaverse
Facebook Inc. is now Meta Platforms Inc. The name change made all the headlines last month. After all, it is an $900bn+ company pivoting towards an unproven idea. But for Meta, this name is more than a directional shift in business terms.
This was a part of a major rebranding effort to get out of the web of ills around Facebook, the social network. The company lately has attracted loads of negative attention, with data privacy and child safety issues. Leaving the name behind is a effort to start afresh and signal to the market that it is not the troubled social network of the past.
It is also a ‘cast in the dye’ moment for the new path the company is trying to chart for itself. AR/VR tech in 2021 terms, the Metaverse has been a part of Mark Zuckerberg’s vision since 2015 (!). Here’s a note to his team talking it being as power as the mobile itself, and about the perils of being vulnerable on mobile to Google and Apple i.e iOS and Android. (Its a must read)
A leaked internal communication also mentioned the company’s inability to attract young cohorts, both as customers and employees. Therefore, the name Meta has a lot of weight. This is a definitive move for the technology giant to redefine its identity, attract the next generation of consumers, build a robust metaverse platform to create a new growth engine, guard against its dependence on Apple and Google, and of course press refresh for its brand image.
“We are fully committed to this,” he said. “It is the next chapter of our work.” – Zuck
The name change itself put the Metaverse into the mainstream. The Google search trends for the word shows is a nice example of that, with the surge in search trends co-inciding with the Facebook announcement.
The markets too took it quite seriously. Money flows into the $META ETF, a fund that holds stocks involved in the metaverse space, surged following the event, taking the total AUM to over $900mn now. Facebook going meta has garnered way more attention got metaverse from the fringes into the mainstream.
Turns out there is a lot in the name.
All Square, but with Blocks
A much smaller business, but big nonetheless. Square, the fintech company that has the Cash App (payments business), Square (merchants PoS and payments business) and Tidal (a music streaming business) under its umbrella announced it would now be called Block Inc. This came after Jack Dorsey, the former Twitter CEO stepped down and became the full time CEO of Block.
This name has different, but equally exciting connotations. Jack Dorsey has been very vocal about crypto, and is a firm believer in the potential of the technology. The name change reaffirms his vision, and is a strong signal about the company’s new focus on the Blockchain.
This is what the official statement said,
The name has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome.
The company is trying to convey what it stands for, but this could well be a defensive move. The payments space is heating up in Square’s main markets, and now Blocks is a strong signal towards its counter-positioning in the crypto and the blockchain space.
The name brings together Square’s established presence and Dorsey’s crypto vision, and makes sense from the perspective of Square’s existing products. Crypto payments, investing/trading, rewards, it just expanded its TAM by lot.
From the markets POV, Blockchain ETFs have garnered a ton of assets since 2020, with Block Inc. being a top 10 holding of most of these funds.
As more funds enter the landscape, the name should ensure it continues to be the case. More funds, more flows in the future. It should be interesting to see how the company does, with a full time CEO and a brand new name.
There are a few other examples that stand out. A notable one being Google becoming Alphabet as it did not want to be seen as just a ‘search’ company (there were other reasons too, along the same lines).
Recently, Standard Life Aberdeen, one of the oldest asset managers in the UK changed its name to abrdn to reflect a “modern, agile and digitally enabled brand”. Here’s another brand, trying to revamp its identity, to fit in with the young upstarts of the financial world and resonate with the new type of customers its trying to target, the wealth creators and wealth owners of the future.
What about adjacent takeaways?
All this shows that the stuff that was made for those fringe subreddits, discords and slacks is now gaining more relevance. The ideas of virtual worlds is not new, but the name Metaverse creates a whole new narrative around it which now has the blessing of one of the most successful personalities in tech.
This also shows where the next phase of growth might sprout out of. Slowing growth in the core markets, or a step too closer to maturity means finding new engines of growth, and making your backers, your existing and prospective customers and the rest of the world believe in it. With a name.
A name can get a lot of wheels rolling. But will it get them to execute?
Until next time,
The Atomic Investor