The very first question you should ask yourself is whether your offering truly needs a new name. If you want to set up a new company, then of course you need to call it something, but if you are, for example, launching a new product, check first whether you can utilize any existing names the company already owns, particularly if they have already achieved some level of brand recognition.
Building a new brand from scratch is for many people a preferred option, because it makes them feel creative and innovative, but in most cases, it should be the last resort as it takes years and is very expensive.
It is always tempting to want a new name to describe the category it will be operating in, at least to some extent. This is understandable, as the name can then play a double role – identifying the brand but also describing the category to which it belongs. It saves time and money, as less effort is required to explain to potential buyers what you are selling, and it should also work to the advantage of your SEO.
However, problems will appear when, after a few years, you decide that you don’t want to be in this category anymore and need to extend the scope of the brand. A few famous brands have experienced this challenge. MTV (Music Television) is nowadays much more about youth shows than it is about the music. Dollar Shave Club is entering new segments within the personal care and beauty category (hair styling, oral care, cologne and even “butt wipes”), which have nothing to do with shaving. Dunkin’ Donuts changed its name to Dunkin’ to more effectively reposition itself from a doughnut brand to a beverage-first company.