Datacubed Health’s Contrarian Take on Category Creation: Why They Pushed Back Against Broad Market Definitions
Most startups dream of being placed in the largest possible market category by analysts. Bigger markets mean bigger opportunities, right? In a recent Category Visionaries episode, Datacubed Health CEO Brett Kleger revealed why this conventional wisdom might be holding companies back.
The Problem with Broad Categories
When Brett arrived at Datacubed Health, he noticed a common pattern in how analysts categorized clinical trial technology companies. “What I often try to do with them is help them understand and better define the category and better define the area so that it’s more discreet and more specific, rather than just a broad based category that means too much.”
This wasn’t just semantic nitpicking – it was about aligning market definitions with actual buyer behavior. As Brett explains, “The buyers aren’t looking at the $40 billion area. They’re looking at how do you solve this specific problem.”
Finding Their Category
Instead of trying to position themselves within the broadest possible market, Datacubed Health focused on defining a specific subcategory that matched their strengths. “The category, or I say this on the subcategory, is patient data collection. In our space, it’s called ECOA, electronic clinical outcomes assessments,” Brett notes.
While this might seem like unnecessarily limiting their market opportunity, it actually helped them better connect with their target customers. The broader e-clinical solutions category might be worth billions, but that wasn’t where their buyers were focusing their attention.
Working with Analysts
Brett’s approach to analyst relations breaks from conventional startup practices. “We’re actively engaged with several analyst firms who have their own definitions of the category and will wind up in various quadrants, the matrixes, whatever they want to call that, in terms of how do they look at the different areas.”
However, instead of accepting these broad categorizations, Brett actively works to reshape them: “We often find some of the analysts will create a broad based category because the dollar signs might be bigger and it might be something that they say were dealing with a $40 billion market category versus a $10 billion market category.”
The Customer-First Categorization
What makes Datacubed Health’s approach particularly interesting is how it puts customer needs ahead of market optics. “Most of the investor market, most of the buyers, they focus more on the subcategories than the larger categories. And that’s what I do try to help the analysts that we work with to better define that so they could hit a better target audience.”
This focus on specific problem-solving rather than broad market positioning extends to their entire go-to-market strategy. As Brett explains, “We want to be seen as the company that knows the space and can deliver reliably.”
Building Brand Within the Category
Rather than trying to dominate a massive market, Datacubed Health focuses on being the trusted choice in their specific niche. “What I tell my team every day is if we can be the easiest company to work with, and we can deliver truthfully and honestly and accurately, and we can provide the clients exactly what we said, we’ll get more and more repeat business.”
This approach manifests in their marketing strategy through:
- Persona-based marketing targeting specific buyer types
- Thought leadership focused on specific industry challenges
- Consistent messaging about reliability and expertise
The Results of Focused Categorization
The impact of this focused approach becomes clear in sales conversations. Instead of trying to be all things to all people, Datacubed Health can have deeper, more meaningful conversations about specific customer problems. This helps them stand out in a market where, as Brett notes, many companies “will hire named individuals who will get out there and create a lot of noise in the marketplace.”
For B2B founders, Datacubed Health’s approach to category creation offers a compelling alternative to the “bigger is better” mindset. Sometimes, the path to market leadership isn’t about claiming the biggest possible market – it’s about defining and dominating the category that matters most to your customers.
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