Category Design

9 Most Common Misconceptions About Category Design

Category design is a new discipline and many misconceptions existing what it is and how it works. Here’s a list of the top misconceptions we see from founders when it comes to category design.

Misconception #1: Category design is a strategy for every innovative founder. 

Reality: Just because you have an innovative product doesn’t mean you are creating a totally new category. New features and capabilities do not necessarily mean it’s a new category. Oftentimes, founders are much better off positioning their products as next-gen solutions to existing products than they are setting out to create a new category. The market can quickly sniff out those who are simply trying to claim the need for a new market category when in reality, it’s just an upgrade to what’s already in existing market categories.

Misconception #2: Category design is a marketing strategy. 

Reality: Category design is an approach you take that impacts the entire organization. It’s a company-wide business strategy. It’s not a one-off marketing campaign you launch and test out for a bit, then abandon. Marketing should be involved in this activity, of course, but it should ultimately be led by the CEO.

Misconception #3: You need to invent a totally new term from scratch. 

Reality: Category design doesn’t mean you need to start from zero. Tesla didn’t invent the electric car category. There are surely others who will say they invented the electric car, but do you know who they are? Are their companies worth a trillion dollars? While Tesla didn’t invent the category, they have defined the category on their own terms and became the loudest voice in the room about the category. If you see an existing category that lacks a dominant player and is unclaimed — don’t hesitate to hijack it.

Misconception #4: People will “get it” right away.

Reality: If people get it right away, that’s a sign you probably don’t have a new category. Because you are building something DIFFERENT and not just BETTER, expect it will take time for people to connect the dots you’ve connected. Be prepared for investors and analysts to think you are crazy at first, too.

Misconception #5: Your category design efforts must begin on day one. 

Reality: On day one of your startup, you must accept that you have very little credibility. Boldly declaring a totally new category will likely not be taken seriously since you haven’t established yourself yet. Instead, focus your early efforts on framing the problem your category will solve and get people onboard with your ideas around the problem. Then, as you gain more credibility, you can coin the category term.

Misconception #6: You must shun all existing categories. 

Reality: Just because you are creating a category doesn’t mean you need to pretend what you do is so radically different that it doesn’t remotely touch on other existing categories.

Misconception #7: You can do it alone. 

Reality: You need an ecosystem to form around you. This means you need service providers, investors, and eventually other founders and companies to begin forming and building up the category around you.

Misconception #8: Being a first mover is enough. 

Reality: Any company can claim to be the first at something, but having first mover advantage alone does not guarantee your position as a market leader over the long term. Being first is helpful, but you must also aggressively work to ensure you are the loudest voice in the room and own the conversation around the category.

Misconception #9: You won’t create any enemies. 

Reality: Creating a new category means you are creating change, and as you do that, you should expect a fight from the companies and people who don’t want to see change. Don’t be afraid to ruffle some feathers here. If you think your new market will make existing market categories obsolete, say it loud and proud. Declare that these legacy categories are dead and it’s time for a new era. Then lead your target customers into a better future. Society loves a good underdog story and picking a fight with legacy companies, categories, and the status quo is a great way to play into that dynamic and establish your position as a true challenger that can bring change to your customers.

Choosing to pursue Category Design as a strategy can be transformational but before you begin, make sure you avoid these common misconceptions that many founders have about the process of creating and dominating a new market category.

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