The Fundamentals of Category Design
To build a company of uncommon value, your product must be categorically, not incrementally, new. That’s the definition of a big idea. So it makes sense that category design is gaining momentum with startups. But what is it?
Category design is the purposeful transformation of the entirety of a company’s activities around a single goal: to define and lead a new market category.
There are three stages to designing a category.
Stage 1: Define.
Create the business strategy, strategic narrative, and executive alignment that, put together, will act as a new North Star for company and customers. This culminates in a category POV, which is an argument for why the world needs your category now, and how the category works.
A category POV is designed to win the hearts and minds of customers in a competitive, noisy world. It does this by delivering three compelling story points:
1. An Unignorable Hook. Your customers are busy. They’ll go to great lengths to ignore marketing messages. However, a new category in their field represents a potential sea change in their industry. That’s something to pay attention to. Customers often feel compelled to form an opinion of the new category, whether for or against. They’ll give you their time and attention to make this assessment.
2. An Existential Gap. Most companies talk about tactical problems as a way to sell their solutions. You, on the other hand, have The Gap. The Gap is a big problem your customer has that nobody has solved yet. Articulated properly, the story of The Gap is so effective, they may think you’ve been reading their email. Once they believe 1) that you understand their needs in a way your competitors don’t, and 2) that you specifically designed this new category to close The Gap, they’ll feel compelled to find out if the product delivers on this promise.
3. A First-of-its-kind Product.Your category POV focuses its solution section (“How It Works”) on superpowers, features, and benefits that no other company can deliver. Your customer may decide that other features are more important to them. That’s okay. The goal isn’t to convince everyone. The goal is to convert 100% of the customers who need the category and differentiated features you’re selling.
If you don’t have a category POV, your company will be missing alignment. It makes recruiting far more challenging and investors will pay less for equity in your company. You might as well take a match to your money.
Stage 2: Launch.
It’s time to show and prove. The purpose of a category launch is to interrupt the status quo and tell the world 1) there’s a new way that businesses and consumers win; and 2) why that necessitates a new category. Launching the category happens both inside and outside your company. It is often anchored by a visionary CEO presentation. You aren’t just launching a category, it’s the start of a movement. A new way of thinking.
Launch can be a single day, a week, a month. There are no rules. Just make it big. Many of our clients launch their category at a conference to reach a focused audience of customers and press.
Every department must play a role in the launch. What new features can the product team launch to make it a success? What about the customer success team? Your launch is like an iceberg: it should look huge to customers, but the behind-the-scenes work is 10 times bigger. It will take a few months of planning, preparation, and execution to have a successful launch. It's worth it.
Stage 3: Grow.
The work has just begun. Every department in your company must continually ask and answer these questions: How can we manifest and improve the category? How can we make this new way of doing things the industry standard? Our most successful clients take a quarterly approach to this, creating mini launches built around campaigns, events, or other large initiatives.
As your category gains momentum, you will attract competition. Some will attempt to co-opt what you do, to take your spot as category leader. To retain your leadership of the category, you can’t play it safe. You must continue to innovate in both product and POV.
Said another way:
If Product = what you offer
And POV = what it means to your customers
Then Product Leadership + POV Leadership = Category Leadership
So that’s roughly the shape of the journey. Now let's talk about three underlying principles of category design that make it totally different—uniquely-suited to companies that dream big.
Principle #1: Made for disruption.
Brand strategy was created to help companies stand out in existing categories like cars and fast-food restaurants. But in order to succeed, pioneering companies must create and champion big product ideas for which no category exists. Category design was purpose-built for these new-to-the-world offerings.
Principle #2: Designed.
Like other design pursuits, category design is a thoughtful, purposeful endeavor. Before writing a category POV, we immerse ourselves in the myriad business forces at work for our clients: their strengths, weaknesses, business model, market forces, potential competitors, adjacent categories, and target customers—to name a few. We put all the pieces on the table and take time to consider each of them before designing a way forward. In a world where companies all too often move fast but without purpose or planning, slowing down and solving the problem thoughtfully gives category designers an edge.
Principle #3: Whole company.
Most companies have a different strategy document for every department. Category design, on the other hand, is a whole company strategy. Because we do this work alongside CEOs and the executives in charge of marketing, product, and sales (among others), a category design project provides a unique opportunity to achieve alignment between brand, product, and sales. And what starts as a whole company strategy turns into whole company orchestration when it comes time to launch.
Those are the basics. Simple, yes, but few companies have the forethought or courage to travel and stay on this path. Those that do vastly improve their chances of success. And those that fail do so knowing they gave it everything they had. Both are so much better than an entrepreneurial life of mediocrity.