Table of Contents
- Table of Contents
- The category design triangle
- How to discover a category:
- Internal Interview questions for category discovery:
- The Play Bigger Guide to Category Discovery and Expression:
- Creating Your POV
- Implementing Category Design
- Create Four Pillar Documents:
- The Play Bigger Guide to Mobilization
- Category Expansion
Category kings are companies that create, develop, and dominate new categories. They design a great product, company, and category.
Category kings grow faster, have more data, attract the best employees, it’s a flywheel that comes from being the king of that category. The gap only gets bigger.
To play bigger is to focus on creating a category and becoming a category king because those are the companies that win big.
5 Hour Energy
“The first inventor is an innovator to be thanked. The first to define and develop a category is a category king to be followed.”
Positioning is only part of category design. And branding agencies are just “tattoo parlors”, they don’t create categories. Category design does.
Groupthink Bias is when we make decisions around a product based on the fact that everyone else used it. We feel safer and happier when we follow the pack. That's what creates category kings.
In order to become a category kings, you need to change the way people think. If you can change the way they think, you can change their buying behavior. And if you can change the way they think, they’ll see you as the category king and buy your product. That’s why category is the new strategy.
The category design triangle
- Company design - build a company with a culture, business model, and point of view that fits your category.
- Product design - build a product with great product/category fit. A product that is purposefully designed to meet the demands of the market.
- Category design - the creation of a new market category. One that will pull in customers and make you the king.
- Category design is the discipline of creating a new market category and conditioning the market to demand your solution and crown your company as the category king.
If you start a new category or define an emerging one, you have the opportunity to help shape it, set the rules.
Frotos - from/to - to create a category you have to move people FROM the way they used to think about a thing TO the new way of thinking. Like in Salesforce vs Siebel, Mark Benioff conditioned the market from using software to using solutions in the cloud.
Seek to create the new, not disrupt the old. If creating the new disrupts the old, then so be it.
How to discover a category:
Market Insight - when you can find the “missing” in a market. What’s something that people know is missing, but they assume it can’t be solved, or something people don’t realize is missing yet. Research, experience in a market, or pure serendipitous luck can’t help you uncover a missing.
Technology Insight - when you can find the “missing” in a product or technology. Essentially innovating on existing technology. In many cases this doesn’t have a use case attached to it. The creator needs to find a problem for the new product to solve.
Dave’s (Peterson) Three Questions (that he asks in the Fullpen):
- Can you explain what problem you’re trying to solve.
- If your company solves this problem perfectly, what category are you in?
- If you win 85% of that category, what’s the size of your category potential?
Internal Interview questions for category discovery:
- Vision mission: what was the original market or technology insight that led you to create this company?
- Customers: who do you envision product this product or service? Who will use it?
- Use Cases: what are the specific ways people will use this product or service to solve their problems?
- Product / solution: give a detailed description of the technology behind this solution. What does it do now and what is it capable of doing?
- Ecosystem: what other companies are involved in solving this problem or adding value?
- Competition: who else is competing to solve this problem, or who might jump in later to try and compete?
- Business model: how will your product or service change change business for your customer?
- Sales and go-to-market: what channels will you use to sell your product or distribute it to buyers?
- Organization: how is your company organized? Who are the major influencers? How are decisions made? What kind of culture will work?
- Funding strategy: when’s the next funding event? How much runway to execute the strategy?
The Play Bigger Guide to Category Discovery and Expression:
- Step One: Who is going to lead the work? Execs need to be stakeholders and invested, but not great owners.
- Step Two: Fact Finding. Interview key leaders, board members, external advisors. Conduct outside research, analyst reports, media coverage. Don’t ask customers, they don’t yet know what they want. Ask the questions outlined above.
- Step Three: Workshop. Bring together the leadership team for a full day workshop. Half educational, half discussion. Educational part is setting context, sharing research, e planing why category is the new strategy and why becoming king matters so much. Rest is debate:
- Who are the customers?
- What’s the problem?
- What are the frotos?
- What’s the new “thing”
- Step Four: Name That Category. Not everyone will love the name. Take a couple days break to let things settle and come back if needed. Once you pick a name, everyone had to buy in.
- Step Five: Package the work. Create a category design doc with these topics:
- Category landscape - what the category would look like and where it fits
- Category ecosystem - customers, competitors, developers, suppliers, analysts, media, everyone else that plugs into the category
- Frotos - the from/to journey we want customers to take
- Category name and description
- The Case for the new category - why the category should exist and what the world will look like if the company creates and dominates the category
- Early Draft Game Plan - a sketch of how the company can create and dominate the category
Creating Your POV
A category kings needs a unique, compelling story — a point of view POV. Raw information reaches us on an intellectual level, but great stories reach into our hearts and out pants.
Brain research shows that stories have a much more lasting effect than facts.
A 1969 Stanford Study “Narrative Stories as Mediators for Serial Learning” shows that students remembers 6-7 times more words from a story vs when shown random words.
In 2010, Paul Zak, a professor at University did a study that found that stories increased oxytocin in the brain. That’s important for selling a product because Oxytocin is an empathy chemical that motivates cooperation and understanding.
Zak believed that emotional, character-driven stories led to greater understanding of the key points a speaker wanted to make and made it easier for people to recall the information a week later.
your POV tells the world that your company is on a mission. It conditions the market to accept the category you’re creating and gives them the same aha moment that the founders had. It also helps create Frotos. The point where they’re like, oh shit, I need that.
Your POV guides the culture, decisions, how to feel, who your hire, etc. Its part of your personality.
A POV I doesn’t have to just a great story, but a great story for its time and mindset of society. A great POV will push people just far enough into the future and give a glimpse of what lies beyond. If you cast your POV too far ahead you’ll either not be able to deliver on the product, your audience won’t be ready for it or believe it, or both. For example, Netflix started with DVDs by mail because they new the market and tech (broadband WiFi) weren’t ready for streaming. But the fact that they called themselves Netflix was an indication that their vision was always movies over the internet.
POV In Action:
- Hiring - you’ll attract people that believe in your POV and reject those that don’t.
- Investors - you’ll get the right kind of investors that believe in your vision.
- Employee Alignment - a POV tells your employees how to act and guides their decisions. At Mercury, the U.S. head of sales, Joe Sexton would fly around and grade the sales team on their POV pitch. Salesforce had a two-sided laminated card stating their POV. The goal is to have everyone on message with the precision of a political campaign.
- Product Development - tells PMs and engineers what to build, and what not to build.
- Brand - POV is not branding and positioning, it informs it.
The Plat Bigger Guide to POV Discovery and Expression
- Step One: Who? - ideally someone outside of the day to day of the org, but must have the full backing of the exec and CEO.
- Step Two: Fact Finding - dive into more strategic and cultural questions. How are the company and product are different? How will this company’s product and roadmap solve the category’s problem? What will the world look like when the company accomplishes its mission. What is the company culture? What image does it want in the media?
- Step Three: Agree on the Problem - figure out the main problem you’re trying to solve and say it in a way that touches people’s emotions. Whoever frames the problem the best, has the best chance of winning the category.
- Step Four: Craft a Story, Rinse, Repeat - problem, vision, blueprint, outcomes. Basic structure of an infomercial. Focus on capturing emotions, don’t talk about features. Inject your company’s personality. Keep it simple and plain language. Put it in a short doc or slide deck. Present it and get your exec’s buyin because once it approved you can’t change it.
- Step Five: Distribute, Evangelize, Mobilize - a POV can’t sit on the shelf. It has to be actively evangelized by the CEO and execs. Train new employees, make everyone get certified. Get everyone amped about your POV and keep it that way.
Implementing Category Design
Kick your new category and POV off with a bang, a lightning strike. 3-6 monthly after finalizing your category and POV. A single company wide campaign meant to grab the attention of the market and make a big splash. The lightning strike has to introduce the product and company strategy that will make the POV real, imminent, and inevitable. The lightning strike can be your category king coronation if executed properly.
The CEO needs to become the Chief Catgeory Officer. They need to put all of their social capital behind evangelizing the new category and POV within the company.
Create Four Pillar Documents:
- Category blueprint - like a product roadmap, but for your category. Lay out a plan for what you believe this category will deliver on in the future.
- Product taxonomy - a doc outlining all of the products within yo ur solution and how they fit within the category. This may require reshuffling your products, splitting them out, renaming and repricing. Words and language matter!
- Customer use cases - define your customer personas, their pain points, and the key use cases they’ll have for your product in this new category.
- Category ecosystem - map out all the stakeholders within your new category. Could be partners, suppliers, communities, etc. You may also have to map the ecosystem that you plan to create for your category.
The Play Bigger Guide to Mobilization
- Step One: Who? - CEO and the lightning strike control master.
- Step Two: Set the lightning strike in motion - after setting your POV, plot your lightning strike 3-6 months out. Plan out everything that needs to be accomplished on that day and make a work back plan to get it all done.
- Step Three: Mobilize everyone - make sure everyone in the company knows what their role is in the lightning strike and set it in motion.
- Step Four: Draw up the Four Mobilization Documents - category blueprint, product taxonomy, use cases, category ecosystem.
- Step Five: See if the suit fits - be self aware, take a hard look at what your company is capable of and determine if you can stick to your plan.
- Step Six: Watch for trouble - look for Zeds and doubter. CEO needs to be ready to double down on evangelizing the category if they notice resistance.
- Step Seven: Get ‘er done - keep your eyes on true north, work hard to strike lightning.
After your create and dominate a category, the next horizon is to expand the category. Great companies that make category creation a part of their DNA tend to create a Category Flywheel that leads to more innovation and the creation of multiple new categories.
A category kings builds an ecosystem and that ecosystem add momentum to the flywheel. Also money, data, and talent.
Category expansion is eventually a necessity once a category kings reaches the limits of their initial category.
If a category kings creates a category that is so massive and full of potential then their strategy can shift to “Category Harvesting” which is the long term milking of the category for years. The focus here is on maintaining your lead and maximizing profits.
Nielsen analyzed 20,000 products, mostly from big old corporations, introduced in the US from 2008-2014 and found that only 74 ( less than 1/2 a percent) broke through with sustained success. So the odds of becoming a billion-dollar category kings are better than the odds of a new product from a big old company creating a category and succeeding in the long term.
Corning Glass is an example of a category kings that continues to reinvent itself and build and dominate new categories. One example is Gorilla Glass. Their CEO Wendell Weeks was a close friend with Steve Jobs, who needed a new king of scratch resistant, stronger glass that wouldn’t break. Weeks could see both the market insight (the smartphone is coming and needs a new glass) and the technology insight (his team has been developing thinner stronger glass but had no market for it, yet).