SAN FRANCISCO - Round-One Inc., Zoapworks Inc. and Just Like TV Internet Inc. may someday become the latest Internet sensations, but within a few months their names will be history.
All three are code names, bogus corporate aliases intended to provide badly needed cover while the companies are in “stealth mode” - the secretive early days before they release prototypes of their products. During the current stampede to create new Internet businesses, stealth names have become routine as entrepreneurs become increasingly paranoid that a revealing name can give potential competitors vital clues about their plans.
Nirav Tolia, a co-founder of Round-One in Mountain View, Calif., is among the paranoid. Round-One worried that disclosing the real name of the company would tip off companies like Amazon.com Inc. to their plans, jeopardizing the “first-mover advantage” start-ups so jealously covet. That concern is especially acute in the Internet market. Unlike hardware, networking and other businesses, the barriers to entry for copycats are all too low.
“Until you have a prototype up there, the ideas is all that you have,” Mr. Tolia says.
To protect its privacy, Round-One’s executives disclosed the real name of the firm to prospective employees only after multiple interviews, and a hush fell over Round-On workers whenever strangers entered their offices. “When new people come to the office, we cover up the whiteboards,” Mr. Tolia says.
Convinced the company has a bug enough head start, Mr. Tolia finally breaks Round-One’s vow of secrecy: His company is really called epinions.com Inc., and it will be a website where users will be compensated for registering their opinions about everything from cars to cellular phones.
Over at Just Like TV Internet in Redwood Shores, Calif., though, executives aren’t about to let stealth mode slip. Although secrecy was important to chairman and chief executive Ken Lim, there are more mundane reasons he opted for a cover name: The company needed and official-sounding corporate e-mail and Web address, nit to mention business cards Mr. Lim - who sold his previous company, Kiva Software, to America Online Inc.’s Netscape Communications - didn’t’ want the hassle of trademarking a final name and registering a corresponding Web address to interfere with the vital task of working on his new service, a Web site he describes cagily as a “business-to-business product trading network.”
For a cover name, Mr. Lim decided to pick something as far from his company’s actual business as possible. He settled on Just Like TV only after he learned that the corresponding Internet address or Tastes Like Chicken was already taken. “We figured, ‘What’s the worst name you can have?’ “ Mr. Lim says.
Other start-ups are nearly as fanciful as their code names: There’s ShoppingList.com (cover name: Project Ganges), Respond.com (code name: Deepmind), and RxCentric.com Inc. (cover name: Project Pipeline). About.com Inc., one of the most frequent Internet name-changers, was once known as ICSN.com, for I Can’t Say Nothing - the response its skittish founders gave to the people inquiring about the company.
Corporate cover names are an offshoot of an older high-tech tradition in which code names are used to refer to development-stage products. Microsoft Corp., for example, has long favored cities - like Cairo, Memphis and Chicago - as the code names for various new versions of its Windows operating system.
With Web companies, though, the name is also the address - Kmart’s real-world stores don’t have to be on Kmart Street, but Amazon.com sure has to be at Amazon.com. For that reason, Internet companies are more finicky than most about finding the right name: one that’s memorable, easy to type and broad enough to encompass new product areas.
One of the earliest Internet-company code names belonged to WebTV Networks, the Internet-on-TV company later acquired by Microsoft. When it was founded in 1995, the company called itself Artemis Research, an organization “committed to studying the results of sleep deprivation, poor diet, and no social life for extended periods of time on humans and dwarf rabbits,” as a descriptions still posted on the Artemis Website reads.
While the tongue-in-cheek descriptions nicely summed up the working conditions at WebTV in its earliest days, the fake name also kept nosey outsiders away, according to WebTV co-founder Steve Perlman. “The things about WebTV [the name] was so descriptive if anyone saw it they would immediately know what we were up to,” says Mr. Perlman, whose new company, Rearden Steel, Inc. uses a cover name.
Of course, if high-tech firms were that serious about secrecy, they wouldn’t bother with cover names at all. Instead of willingly submitting to a reporter’s questions, they’d studiously avoid drawing attention to themselves. But cover names are meant to draw some attention - they’re par of a carefully crafted ploy to build buzz for start-ups and pique the interest of potential recruits, investors and press by revealing only the barest details about a business.
“There’s magic in mystery,” says Neil Weintraut, a venture capitalist with 21st Century Venture Partners.
In Round-One’s case, the company clearly wanted to capitalize on the reputation of Round Zero, a regular social gathering Mr. Tolia and others organized for Silicon Valley movers and shakers - hardly an effort to shy from public view. And in spite of their “secrecy”, many stealth start-ups readily advertise the pedigrees of their executives on their Web sites, even if the sites are short on other specifics.
“Holding back information just whets people’s appetites,” says Mr. Tolia.