Don’t create a category

Weekly insights on all things brand strategy, audience marketing, and experiences.

Wiley is going to love me after this one.

In 2019, they published my book called “Category Creation: How to Build a Brand that Customers, Employees, and Investors Will Love.”

My intention was to create an operators manual and tactical playbook for CMOs who intend to establish a new market category for their brand and spark a movement within their community. The best practices were from my experience taking Gainsight and Customer Success from concept to mainstream, as well as a collection of stories from others who had done the same.

The book wasn’t necessarily a commercial success. I like to think of it as the Donnie Darko of business books — didn’t necessarily crush in the box office, but sort of became a cult classic.

Category creation is an incredible strategy. I’ll admit that as a glutton for punishment, I choose to work on creation brands more than I do disruption brands. I find it more fulfilling, more human first, and more aligned to the type of marketing work that I enjoy doing.

But let’s be clear, there’s a much easier / cheaper / faster way to build a brand than to create a category.

An unintended consequence of my publishing the book was the acceleration of a dangerous mindset that infiltrated the board rooms of technology companies across the globe.

Why Category Creation Became a Thing

The earliest I can date category creation (or similar terminology) as a marketing strategy was 2013.

Years later, a book was written called Play Bigger that did two things extremely well — it built the business case for what they call ‘category design’ for technology companies, and it integrated the philosophy into the most influential circles of Silicon Valley. On the back cover of the book were testimonials from Marc Benioff, Sequoia’s Jim Goetz, and other powerful voices.

Soon thereafter, every investor in the Valley developed conviction around only investing in category creators — and every board member pushed their founders to play bigger.

I have a lot of respect for Play Bigger and their marketing execution.

So what about this was dangerous? Harvard Business Review found that category creating brands “accounted for 53% of incremental revenue growth and 74% of incremental market cap growth” over their peer set.

Who wouldn’t want to create a category?

Why Category Creation Isn’t For Everyone

The outcome of this indoctrination of Silicon Valley with category creation ideology is that it was pushed on every company, regardless of whether or not they were a good candidate for it. I am complicit in contributing to this — no doubt about it.

Gong changed sales culture forever by making it OK to record phone calls in favor of coaching and training. Unmet need, new solution to address it.

On the other hand, Figma created a new solution for the design community to disrupt a market that Adobe had dominated with a new, collaborative, and web enabled approach. Existing need, a better solution to address it.

What many companies chasing category creation panacea end up doing is manufacturing an unmet need — when the need has been widely accepted already!

In those instances, you can understand why skeptical voices would ask: is that really a new category, or a thinly-veiled marketing campaign?

Here are some of the reasons why forcing category creation could backfire for your brand:

• Category creation is expensive.

• Category creation takes a long time to work.

• Category creation is difficult to measure.

• Category creation requires a completely different GTM.

• Category creation has a much higher failure rate.

I can probably write a newsletter for each one of these.

If the net outcome you’re optimizing for is new bookings, then surely taking a page out of the market disruption playbook is a better idea than falling in love with category creation.

The problem is that for some companies, category creation is the only way through.

Who is Category Creation For?

All this said, for some companies, the only way forward is to create a category.

That was our experience at Gainsight.

Back in 2013, there wasn’t any software that aggregated customer data with programmatic workflows as an early warning system for customer churn. The unmet need was lost between CRM software for sales use cases, and ticketing software for support.

We observed that unmet need and positioned our company around Customer Success. When there’s no cognitive reference in the minds of your audience around your unmet need, your job as a brand is to become that reference.

So despite the pain (ok, it wasn’t life or death), here are some signals that your brand may really be a good candidate for category creation:

• No direct competitors in-market for your product. It’s possible you could glue together a number of indirect competitive solutions, but chances are your competition in sales cycles is “do nothing” or “build in-house.”

• No taxonomy for your unmet need. There’s no widely accepted language around the problem you want to solve — which means SEO, paid keywords, and other activation channels are pretty blue ocean.

• No one really knows what you’re talking about. Investors and early customers believe. Employees get it after about a ten minute conversation. But it’s not super clear to the early and late majority on what your company and product actually do.

• There’s a small group of passionate innovators who get it. A good validation is observing a small community of innovators within your audience — customers or otherwise — who are enthusiastic about your unmet need and/or proposed solution to address it. Befriend these people. Give them equity if you have to.

If that’s you, welcome to the struggle.

The only way out is through.

You can always reach me directly by emailing [email protected] or simply by replying to this email.

I’d love to hear your questions, thoughts, or any ideas you might have. Thanks again for subscribing! I’m thrilled to see where this journey will take us.