The highest-valued private companies use shorter domain names.
Researchers with the Stanford University Graduate School of Business Venture Capital Initiative team have analyzed the domain names of unicorns (companies valued at $1B plus) compared to random venture capital-backed companies. They found that the unicorns use shorter domain names.
Ilya Strebulaev, a professor at the school, noted that the average domain length of random VC-backed companies is 9.4 symbols vs. 8.4 for unicorns. This difference is statistically significant, he said.
Companies with a domain length of 7 or fewer characters are 36% more likely to be unicorns.
So does that mean a shorter domain leads to better results? Not necessarily.
In a LinkedIn post, Strebulaev notes some possible reasons for the results:
One intriguing explanation is that shorter domain length is more attractive for consumers. A potential explanation is that unicorns can afford to change its domain to a short one once they become unicorns (researchers would call this explanation “reverse causality”).
It could be the latter. Someone commenting on the LinkedIn post noted:
Definitely reverse causality. My startup would loved to be named recast . com, but because some idiot is squatting on the domain and wants a million dollars, we will be getrecast.com until we become a unicorn. Market cap causes shorter names, shorter names do not cause market cap.
And some unicorns have long domains, so a short domain is not required.
Note that the researchers didn’t discriminate between .com domains and other top level domains.
Strebulaev said that the researchers will be further analyzing the history of the domains.