How Modulate Built a Category: Lessons in Creating the ‘Prosocial Voice Intelligence’ Market
Creating a new market category requires more than just innovative technology – it demands a deep understanding of an underlying problem that existing categories fail to address. In a recent episode of Category Visionaries, Modulate CEO Mike Pappas revealed how they built the prosocial voice intelligence category from the ground up.
Starting with the Right Question
The journey began not with a product, but with a question. “What is the Internet, and is it really living up to its promise?” Mike recalls. This fundamental inquiry led them to examine how online interactions often fell short of their potential.
As Mike explains, “The more we looked at the reality that is so often, that this exposure to diversity actually just reinforces sort of shallowness and bias in many cases, and that exposure to information just reinforces disinformation.” This insight would later shape their entire approach to category creation.
Identifying the Unmet Need
Through customer conversations, they discovered a critical gap in online gaming platforms. “When you have an online platform, typically games is what we work with most. You have lots of people chatting with each other all the time, and most of those conversations are fine… But sometimes those conversations take a dark turn,” Mike explains.
More crucially, “for a variety of reasons, for a long time, the platforms had no ability whatsoever to even know what was happening. They had no visibility into this terrible behavior. Their users were just left entirely undefended.”
Defining the Category
Rather than positioning themselves narrowly as a voice moderation tool, Modulate created a broader category they call “prosocial voice intelligence.” This wasn’t just clever marketing – it reflected their deeper understanding of the problem space.
“We want to be the organization that enables everyone across the globe to have more meaningful, richer, deeper conversations with each other and to understand each other and make the most out of those conversations,” Mike shares.
Building Category Credibility
Modulate established category leadership through a deliberate approach to market education. “There’s a huge amount of activity these days in safety and privacy regulation,” Mike notes. By helping platforms navigate this complexity, they positioned themselves as category definers rather than just product vendors.
Their strategy focused on “providing the education to these platforms that don’t otherwise have the resources to really wrap their head around such a complex legislative landscape.” This approach helped establish standards for what good looks like in voice safety.
Expanding Category Boundaries
While gaming remains their primary focus, Modulate has identified opportunities to expand the category. “There’s actually been quite a shocking number of different interesting healthcare applications that we’ve come across,” Mike reveals. They’ve also seen potential in online dating, where people are “making themselves very vulnerable.”
Results and Validation
The success of their category-creation strategy is evident in their growth. “Over last year, we more than forexed in our annual recurring revenue,” Mike shares, including partnerships with major gaming studios like Call of Duty. This growth validates not just their product, but the entire category they’ve created.
Lessons in Category Creation
Modulate’s approach offers valuable insights for founders looking to create new categories:
- Start with a fundamental problem, not just a technical solution
- Position your category to encompass future growth opportunities
- Invest in market education to establish category standards
- Build credibility through thought leadership
- Focus on long-term partnerships over quick sales
Their story demonstrates that successful category creation isn’t just about naming something new – it’s about identifying and solving a fundamental problem in a way that creates space for continuous innovation and growth. By focusing on the broader goal of improving online interactions rather than just technical capabilities, Modulate has created a category with room to evolve alongside changing market needs.
This approach has not only driven their growth but has positioned them to shape the future of online communication. As Mike puts it, they’re not just building a product – they’re enabling “everyone across the globe to have more meaningful, richer, deeper conversations with each other.”