Lexicon News
The Moniker Magician
Douglas E. Caldwell, San Jose Business JournalSeptember 21, 2001
Name of game is branding for man with extensive lexicon
"What's in a name? That which we call a rose by any other name would smell as sweet."
Shakespeare wrote that in "Romeo and Juliet."
But what do you call the various parts of a furnace? That's what David Placek mused, sitting by himself in a cheap office in a low-rent building in San Francisco in the late 1970s.
It was more than an academic exercise for Mr. Placek. The rent and the food on his table -- and his dreams of creating a company where none had existed -- depended largely on coming up with a name for those parts being made by United Technologies.
Sitting in his office, from which he could see a tiny slice of San Francisco Bay, the former Foote, Cone and Belding advertising executive would read dictionaries and magazines of all kinds looking for words that would describe the furnace.
"I would do that for days on end, nonstop," he recalls.
Mr. Placek came up with a name that was adopted -- WhisperJet -- and the rent was made.
Then he developed more ways to devise names for products. His one-man company, Lexicon Branding® Inc., was off the runway and pioneering a new niche in marketing: branding.
Since those early days, Lexicon® has added a lot of names to the dictionary, including the Macintosh PowerBook, an early naming success. That was followed by such now-well-known brand names as Embassy Suites, Pentium, Itanium, the Subaru Outback and others.
Over the years, Mr. Placek has studied what works best in sparking creativity.
"Small teams significantly outperform large teams," he observes.
That prompted him 10 years ago to begin hiring staff instead of using large groups of freelancers. Now, instead of one man in a small office, Lexicon® employs a staff of 21 and has offices in Sausalito and Menlo Park.
"If I'm committed to being one of the best companies, we've got to take on the overhead of hiring and training our own creative people," Mr. Placek says of his decision to begin adding staff -- and overhead. "That was scary. But we did it, and it was by far the smartest business decision I ever made at Lexicon® because it really has built this wonderful team."
The company essentially has been self-financed from the first.
"There are no outside investors," Mr. Placek says.
He had read that Hewlett-Packard Co. was self-financed. "I thought they had a good idea and I've done it that way. It doesn't mean I haven't had to take a second mortgage and explain what we do to bankers," he says with a chuckle.
Mr. Placek still reads business texts and articles voraciously, a habit he picked up years ago.
"Through reading, I decided I was going to build a company. Not just be a consultant, but to build a company. Because of that, by corporate policy we take a minimum of 10 percent of our profits and we put it back into the company," he says. "We do experimental research, we do linguistic testing, we experiment with the creative process."
Mr. Placek says that's meant reinvesting about $3.5 million over 20 years into making the company "stronger, better, pushing us to be on the leading edge."
Associates say it's paid off.