Gentle Reminder That People Aren't Rational — Gold Front

Gentle Reminder That People Aren't Rational

We know the mind is where companies win. So why do we flout its laws?

Josh Lowman

Every year companies waste billions of dollars marketing products that are doomed to fail because of the systemic, wrong-headed belief that success lies in proving they have a better product.

In doing so, they overlook two irreducible truths that don’t like to be ignored. First, that companies succeed or fail inside the mind of the customer and second, that minds are totally different on the inside than they appear from the outside.

So how do we fix it?

While the mind of the customer is a vast and mysterious place, it follows a set of timeless laws. Laws we can learn to win in a noisy, competitive world. Take the fact that every mind has an unconscious, so what motivates people is inherently at odds with what they will tell you. That one truth, if grokked, would upend most companies today.

For entrepreneurs, there are two laws that must be followed above all else. First laid out in Jack Trout and Al Ries’ 1980 classic, The 22 Immutable Laws of Marketing, they are: The Law of Leadership and The Law of Category. The Law of Leadership tells us that minds overwhelmingly prefer to give their hard-earned dollars to the company that’s first in its category. The Law of Category is for those who find that mountain impossible to climb:

If you can’t be first in the category, set up a new category you can be first in.

On the Mount Rushmore of dynamics that determine human belief and behavior, there is first and there is different. Better and rational are nowhere to be found.

This substack is dedicated to The Law of Category. Because the only way we break the fever dream of rationality is by learning the Law of Category’s true implications. Let me show you how the Law of Category can be used as a first principle to call bullshit on a commonly-held misconception.

Take the startup world’s intense focus on achieving product-market fit which, when attained, leads countless companies to invest their valuable time developing products that will never actually succeed.

If they applied the Law of Category startups would require not just product-market fit, but also categorical differentiation before going all-in. Why? Because unless and until you create a category you can be first in, your company is vulnerable. Conversely, taken together, product-market fit and category creation are nearly unstoppable.

That’s just one example of the power of applying psychic first principles. Like the application of first principles in science, there’s an endless amount of innovation we can achieve.

So stick around! Add your voice to the conversation and help us disabuse the world of wrong-headed beliefs.

What could be more fun?