What percentage of the total value created in any given market category goes to the category designer or leader? That was a question that we had several years ago. And we thought there would be research about that. Well, when we were writing Play Bigger, we couldn’t find that data. So we had to create it. The number has been an extraordinary insight. It turns out that the company that wins the category earns 76% of the total value created in the space, as measured by market cap and or valuation. And that insight was so compelling, we actually published it in the Harvard Business Review.
On this episode, let’s dig into how you could be that person. How do you be that company that earns that 76%? Or seven another way? What are the different ways that category designers, the people who create and dominate new market categories think and become the one who earns that 76%?
Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.
Category Design is a Game Of Thinking
Thinking about thinking is the most important kind of thinking for a Category Designer.
You are responsible for changing the way a reader, customer, or consumer “thinks.” You are successful when you’ve moved their thinking from the old way to the new and different way you are educating them about.
But what is “thinking?”
According to Roger Martin, arguably the world’s #1 management thinker, “thinking” is when you look at the world through an existing model. It’s how you use learnings from the past to make sense of the present. So when another driver cuts you off on the highway, you apply your past experiences to the present and swerve on reflex.
But almost all thinking is “reflexive” rather than “reflective.”
Consider the difference we laid out in our mini-book The Art of Fresh Thinking:
- “Reflexive” thinking: Having an unconscious “reflex” in response to ideas or opinions.
- “Reflective” thinking: Taking a moment to consciously reflect on how the past may have created a preexisting mental model keeping you from considering a new and different future.
Reflexive thinking causes a scarcity of fresh thinking in the world because it relies on mental scaffolding built in the past.
Some of the smartest people stopped reflective thinking a long time ago. We would even go so far as to say that being declared a smart person is almost certain to make you stupid. Because when you get called “smart,” you become entrenched in your comfortable past. When you’re smart, you know things. And most people who know things are called “experts.” Which means they already know. And when you already know, by definition you are using old mental scaffolding to consider new and different futures.
Which makes you stupid.
So, don’t strive to become an expert (ever!)—it’s the enemy of fresh thinking.
Here’s How a Category Designer Thinks
You are presented with information.
You become conscious of which model you are using to evaluate the information (which “lens” you are looking through).
And then before you react, respond, or give in to your reflexive nature, you pause and first consider which mental model you’re using to examine the information being presented. You train yourself to be curious, to ask why, to suspend your past opinions, beliefs, and mental models, and to open the aperture of your mind and consider something different.
“Legendary builders must stand in the future and pull the present from the current reality to the future of their design. So an important additional job of the builder is to persuade early like-minded people to join a new movement.”
To learn more on how you can become a Category Designer and start thinking more reflectively, download and listen to this episode. You can also read more about it at Category Pirates.
Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.
He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.
Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.
In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.
He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.
Don’t forget to grab a copy (or gift!) of one of our best-selling books:
- ❄️ Snow Leopard: How Legendary Writers Create A Category Of One
- ⚒️ The Category Design Toolkit: Beyond Marketing: 15 Frameworks For Creating & Dominating Your Niche
- 📣 A Marketer’s Guide To Category Design: How To Escape The “Better” Trap, Dam The Demand, And Launch A Lightning Strike Strategy