Looking For A Growth Strategy? Try Category Creation
Category creation is the ultimate growth strategy. According to research published in the Harvard Business review, by our friend and fellow Category Pirate ?☠️ Eddie Yoon.
Defining What It Is
Category creation (aka category design) is a management strategy that has been employed by the most successful companies for years. It involves the creation of new categories of products and services to introduce to the market. It’s about designing your own game Vs. playing someone else’s. It’s about introducing the world to a new, different approach.
Category designers also earn the vast majority of the economy in the category. 76% to be exact. Of the total value created – as measured by market cap.
Products don’t make new categories by themselves. Legends design a new product, company (business model), and category at the same time.
Category designers present their products and services under a new category and educates the market on that category.
Why It Is Ideal For Growth Strategy
Today’s market is smart. People are aware that most companies are fighting with each other to get your money. But with category creation, you present a real problem and an innovative solution at the same time, so you immediately distinguish yourself from all other companies.
You become the brand that cares and aims to improve people’s lives. Empathy and radical generosity are hallmarks of companies pioneering new categories. Thus, even as you educate the market about your category, you inevitably build brand awareness. That brand awareness goes deep as it is about values and not aesthetics.
And the more valuable the category, the more valuable the brand. Most people don’t realize that categories make brands. Not the other way around. Xerox and Dell have great brands. But no one gives a shit about them any more. Because they are no longer leaders in categories that matter.
Pulling in another company’s loyal customers is a difficult feat, but you already know that. In a highly competitive market, your best bet to achieve growth is to come up with your own market by creating a new category. Carve out your own niche in the market, and nurture your loyal customers. Educate them about your category, company, and products, and make sure that you evangelize how you’re DIFFERENT.. Not better.
There is no such thing as a legendary business without loyal customers. Customers are, in fact, another reason why creating a new category works as a growth strategy.
Categories about customers. And their problems. Brands are about us. Category design is about creating new value for customers where none had existed before. Branding is about shouting “WE’RE AWESOME. BUY FROM US”.
Companies who are “us” focused, will always get crushed by companies who are “them” focused.
When people truly care about your category, they will also easily value your company, and they will not hesitate to tell others about you. Loyal customers will help you reach a wider market that needs your products or services. You will not need to exert all your effort on marketing because the people who value your category will push your company to the forefront.
Grow Your Company
Category creation is, first and foremost, a new lens on business. It requires creativity and spunk. You need to be ready not to play by any of the existing rules and to be clever enough to create your own. Christopher Lochhead can help you apply the concept to your company.
