Category Creation

Overview

Category Creation is the strategic discipline of creating and dominating a new market category rather than competing in an existing one. Coined and popularized by the book “Play Bigger” by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney, this pattern is about designing a new game and positioning your company as the undisputed leader, or “Category King.” The core idea is that the company that defines a new problem and a new solution in the minds of customers will be the one to capture the vast majority of the market share, often as much as 76% of the total category value. This is not about being the first mover with a new product, but about being the first to establish a new category in the market’s consciousness. By creating a new category, a company can render the competition irrelevant and establish a long-term defensible advantage. It is a growth strategy that focuses on differentiation by creating new markets, rather than competing in existing ones. This strategy is not just for startups; it can be employed by companies of all sizes to break out of crowded markets and achieve exponential growth.

Core Principles

1. Fight the status quo, not the competition: Instead of trying to be better than the competition, focus on being different. The goal is to make the existing solutions obsolete by introducing a new way of thinking about a problem.
2. Understand who the category is for, and who it isn’t: A new category is not for everyone. It is crucial to identify the specific audience that will benefit most from the new solution and focus all efforts on winning them over.
3. See problems others don’t or can’t: Category creation starts with identifying a problem that is either new, unsolved, or not well-understood. This requires a deep empathy for customers and the ability to see the world from their perspective.
4. Solve with a vision for the future: A category is not just a product; it is a vision for a different future. The solution should not just address the immediate problem but also paint a picture of what is possible in the new category.
5. Frame it. Name it. Claim it.: Once the problem and solution are clear, the next step is to give the new category a name and a narrative. This “Point of View” (POV) is the story that will be used to educate the market and claim ownership of the new category.

Key Practices

1. Identify the problem and who has it: The foundation of category creation is a deep understanding of a significant, unsolved problem and the specific audience that experiences it.
2. Lay out the components of the solution: A category-defining solution is often a combination of product, services, and a unique business model that work together to solve the problem in a novel way.
3. Choose your category name: The category name should be simple, memorable, and descriptive of the new solution. It should be a label that customers can easily understand and adopt.
4. Map the entire thing in a Blueprint: The Blueprint is a visual representation of the new category that shows how all the different components work together. It serves as a guide for both internal teams and external stakeholders.
5. Lay it all out in a provocative POV: The Point of View (POV) is the narrative that explains the problem, the solution, and the vision for the new category. It is the central messaging document for all marketing and sales efforts.
6. Mobilize your company behind the category: Category creation is a company-wide effort. Everyone from the CEO to the interns needs to understand and believe in the new category.
7. Bring it into the world with Lightning Strikes: Lightning Strikes are high-impact marketing campaigns designed to launch the new category and establish the company as the Category King. These are not just product launches; they are category launches.

Implementation

Implementing a category creation strategy is a multi-step process that requires a long-term commitment from the entire organization. Here is a more detailed look at the implementation steps:

• Step 1: Discover the Problem. This is the most critical step. It involves deep customer research, market analysis, and a bit of creative genius to uncover a problem that is both significant and unsolved. The goal is to find a “problem to be solved” that can be the foundation of a new category.
• Step 2: Develop the Solution. Once the problem is identified, the next step is to develop a comprehensive solution. This is not just about building a product; it is about designing a complete experience that includes the product, the business model, and the customer journey.
• Step 3: Craft the Category Name and POV. The category name should be a simple and powerful label for the new solution. The POV is the story that will be used to introduce the new category to the world. It should be provocative, insightful, and inspiring.
• Step 4: Create the Blueprint. The Blueprint is a detailed map of the new category. It should outline the key components of the solution, the target audience, the value proposition, and the go-to-market strategy. It is the master plan for building and dominating the new category.
• Step 5: Evangelize the Category Internally. Before launching the new category to the world, it is essential to get the entire company on board. This involves educating employees about the new category, getting their buy-in, and turning them into evangelists.
• Step 6: Launch the Category with Lightning Strikes. Lightning Strikes are big, bold marketing campaigns that are designed to make a lot of noise and grab the attention of the target audience. The goal is to create a “shock and awe” effect that establishes the company as the leader of the new category.
• Step 7: Dominate the Category. After the launch, the work is not done. The company needs to continue to innovate, evangelize, and defend the new category to maintain its leadership position and become the undisputed Category King.

Seven Pillars Assessment

• Purpose (Score: 4): Category creation is deeply rooted in purpose. It starts with identifying a meaningful problem and is driven by a vision to create a different and better future for a specific group of people. This strong sense of purpose is what mobilizes the company and inspires customers to join the new category.
• Governance (Score: 3): While category creation requires strong leadership and a clear vision, it does not prescribe a specific governance model. The focus is on market domination and centralized control, which can sometimes be at odds with more distributed and participatory governance models. However, a well-defined category can create a clear set of rules and standards that can guide the ecosystem.
• Culture (Score: 4): A culture of innovation, risk-taking, and evangelism is essential for successful category creation. The entire company needs to be aligned around the new category and be willing to challenge the status quo. This creates a powerful and cohesive culture that can be a significant competitive advantage.
• Incentives (Score:3): The primary incentive in category creation is to achieve market leadership and capture the majority of the economic value. While this is a powerful motivator, it can also lead to a winner-take-all dynamic that may not be aligned with the principles of a commons. However, by creating a new market, a company can also create new opportunities for partners, developers, and other stakeholders.
• Knowledge (Score: 4): Category creation is a knowledge-intensive process. It requires a deep understanding of the customer, the market, and the technology. The company that creates a new category becomes the primary source of knowledge about that category, which gives it a significant advantage over its competitors.
• Technology (Score: 3): Technology is often a key enabler of category creation, but it is not the sole driver. The focus is on the problem and the new category, not on a specific technology. A company can create a new category with existing technology by framing it in a new way and creating a new narrative around it.
• Resilience (Score: 4): By creating and owning a new category, a company can build a strong and defensible market position. The Category King is not easily displaced, as it has defined the rules of the game and has a deep connection with its customers. This creates a high degree of resilience and long-term sustainability.

When to Use

• When you have identified a new, significant, and unsolved problem.
• When you have a truly innovative solution that is not just an incremental improvement on existing products.
• When you are in a crowded and competitive market and need to break out.
• When you have the ambition and the resources to build and dominate a new market.
• When you are willing to take a long-term view and invest in building a new category.

Anti-Patterns

• “Better” Trap: Trying to be a “better” version of an existing product instead of creating a “different” solution.
• First Mover Fallacy: Believing that being the first to market with a new product is enough to win. Category creation is about being the first to create a new market in the minds of customers.
• Lack of a POV: Failing to create a compelling narrative and a clear Point of View for the new category.
• Internal Misalignment: Not getting the entire company on board with the new category, leading to a fragmented and ineffective go-to-market strategy.
• Weak Launch: Launching the new category with a whimper instead of a bang. A weak launch can make it difficult to gain momentum and establish leadership.

References

• Play Bigger
• What is Category Design in Marketing?