If you were going to publish something using a pseudonym, what would it be? I once asked a fellow writer if there was some sort of formula to creating a nom de plume, and she said that I should take my middle name, the name of my first pet and the street I grew up on. I was pretty sure that was the same method used to create porn star names, and had I taken her advice I would be publishing my first novel under the name “Alayne Rusty Cannon”, so I decided that there had to be a better method.
A good pen name both anonymizes the writer and yet still carries a hint of their identity. Many well-known authors choose their pen names based on sentimental reasons in order to maintain that sense of identity—George Orwell, for example, got his pen name from the River Orwell (a place he enjoyed visiting) and George, the patron saint of England. So rather than picking words that you would use to recover your password on Google, here's a way that might result in something a little more original.
Make a list of words that are significant to you.
Think of words that bring up special memories or are somehow significant to you. For example, my first memory is from huddling in my grandparents’ house during hurricane Hugo, so Hugo was on my list. The street I grew up on—Cannon—is also on this list, along with a nickname that my mother used to call me when I was very young. They don’t have to sound like something that would normally be part of a name.
Make a list of important names.
This could be people that made an impact in your life, a character in a book that you loved, or an ancient deity that represents values that you support.
Make a list of things that you like.
This one can be a bit tricky. Unlike the previous lists, you should try to stick to things that can be manipulated into a name. ‘Kittens’ is fine for this. ‘Cheese’ probably isn’t.
Use parts of your real name
This really depends on how much of the real you that you want in your pen name. Some people prefer to remain completely anonymous, while others make small tweaks to their real name. Try using your middle name or a shortened version of your first name (or even your last name).
Play with it.
At this point, you should have quite a lot to work with. A bit from column B, something from column C, and some consideration for the genre that you’ll be writing. Science fiction and fantasy authors tend to stick to initials, for example. With these four (or three, if you passed on using any part of your real name) lists you should have plenty of material to work with. Try combining different words or shortening them to initials. Put random words next to each other and see what sounds nice. Chances are, you’ll be able to create several pen names that you like using this method.