Category Design: Don't Compete, Create the Game
Instead of fighting for a slice of the pie, bake a new one. Category design creates a new market you can dominate, rather than competing in an existing one. The footgun is thinking a new feature makes a new category; it requires teaching the market.
WHY IT EXISTS Competing head-to-head in a crowded, established market is often a race to the bottom on price and features. Category design was developed as an alternative for companies that want to achieve market leadership and differentiation not by being better, but by being different and creating a new space to lead.
THE MENTAL MODEL Category design is about changing the game, not just playing it better. The goal is to reframe the conversation in the customer's mind. Instead of them asking, "Which provider of X is best?" you teach them to ask, "Who is the best provider of Y?"—where you are the first and obvious answer for Y because you invented it.
HOW IT WORKS Category design works by identifying a problem that customers either don't know they have or have accepted as a fact of life. The company then names the problem, evangelizes a different future, and positions its product or service as the only logical solution. This process defines the boundaries and language of the new category, establishing the company as the thought leader and default choice.
WHEN TO USE IT Use category design when you have a truly disruptive innovation that doesn't fit neatly into existing market boxes. It's for products that offer a fundamentally new way of doing things, creating a "blue ocean" where you are the only player, at least initially. This strategy is for defining a new market, not just entering an old one.
WHEN NOT TO USE IT Avoid this strategy if your product is an incremental improvement on an existing solution in a well-understood market. If you are simply faster, cheaper, or have one extra feature, competing on those vectors is more direct. Attempting to create a new category for a slightly better mousetrap will only confuse customers and burn resources.
ONE CANONICAL EXAMPLE Before Salesforce, companies bought and installed CRM software on their own servers. Salesforce didn't just sell a better version of this; it redefined the problem from "how to manage CRM software" to "how to access customer data anywhere, anytime." By doing so, it created and then dominated the new category of cloud-based, subscription SaaS CRM.
Read the original → en.wikipedia.org
Get five bites like this every day.
Tezvyn delivers a daily feed of 60-second tech bites with quizzes to lock in what you learn.