"What does your company do?" It should be the most basic of questions for an entrepreneur, next to being asked about your name and how you take your coffee. And yet, it's surprising how many business owners cannot accurately answer the question.

I got to thinking about this question and topic because of an intriguing post by Julian Shapiro on The Next Web about bad startup names.

Shapiro attributes this bad marketing move to three things a company and its founders lack: attention to detail, diligence, and self-awareness. The last one is of particular interest. Shapiro says a company that settled on a poor name "didn't have the self-awareness to thoroughly gather and assess feedback about their naming decision."

That is true, but the problem of naming a startup goes far deeper. Not only does it suggest that the entrepreneurs abdicated an important responsibility, but also that they don't entirely understand what their companies do. If they did, naming the business would have been much easier.

How can you not know what your company does? It's a lot easier than you think. Try describing your own company right now. Write it down. Now read it aloud.

Honestly answer the following questions:

  • Does the description focus on the products or services you sell?
  • Do you mention how you'll go to market?
  • Have you compared the company to your competitors?
  • Did include include phrases such as "the leading," "state-of-the-art," or "world-class?"

If you answered yes to any of these questions, then you don't recognize what your company actually does.

To say that a company is about its product, business model, competitive standing, or vapid description is to miss the point. A legitimate company exists only because it has customers. It may aspire to success, growth, and importance, but if the business doesn't thoroughly satisfy the customers, everything else is moot. It won't last long enough to achieve them.

Naming, or managing, a company is difficult if you don't embrace what it does. A good car dealership is about helping people solve their transportation needs, not selling them a car. A green grocer helps customers improve their health and the taste of their meals with fine produce. It isn't a way to push cucumbers and cabbage. A social network connects people in ways that let them stay in touch with old friends and possibly develop new ones. That is much more than serving up ads to a bunch of eyeballs.

When you understand what the business really does, you're closer to developing proper relationships with customers. When you have that relationship set, everything else will begin to fall into order. Until then, you literally don't know what you're doing.