One of the crucial questions you need to answer for your start-up, and maybe the most difficult, when you are getting started is "who are you?". I don't mean this to be philosophical but you need to answer this question so you know what business you are in or as others put it "what bucket are you in?"
There are many reasons why this is so critical but the ones that stand out for me is that it forms the foundation of your elevator pitch and also defines who you competitors are which helps you to differentiate your solution from them.
But you not only need to answer the question, you need to answer it succinctly. Coming up with three to five words is likely the hardest part of developing your messaging but it's extremely important. You need to think long and hard about the words you want to see tied to your company name as it will lead to how you are viewed by the public and if prospects consider you for their solution.
For example, when you get coverage for your company, and you will, the media will always want to define the company quickly at the outset so readers understand what the company does. The editor is not going to take paragraphs to do that. They are going to define the company in three words and it's better if you do it for them.
Also, from a competitive standpoint, and everyone has competitors or the company is in bigger trouble, picking what bucket you are in is better than letting your audience do it, and they will if you don't. By defining what business you are in, you can then focus your messaging to differentiate your solution from your competition.
There is the temptation to try and create a new bucket for your start-up but this has some serious drawbacks. First and foremost, it's difficult for a small company to create a new space. And if it doesn't catch on, then you risk letting your competitor, media and/or others define you.
What makes more sense is to take an existing bucket and reframe it. Quite often, this is best done by segmenting an existing market, which gives your audience a frame of reference but at the same time gives you the benefits of defining a "new" space that you are clearly first-to-market in.
I've seen many rush into selecting their wordss while others change them regularly but how you define your business has long-term implications to your success. So, make sure you think long and hard about what bucket you are in.