The Newcomers Guide to Category Design

The Newcomer’s Guide to Category Design How and When to Shift Your Company’s Focus from “Capturing Market Share” to “Building a New Category”

The Newcomer’s Guide to Category Design How and When to Shift Your Company’s Focus from “Capturing Market Share” to “Building a New Category” Do you have an idea for a new product that doesn’t fall into any defined category? Have you been struggling to get traction or stand out from competitors in an existing category? If you occupy a leadership position in B2B SaaS, this guide will help you assess your company’s readiness for category design. It will also walk you through a process you can use to develop buy-in for this strategy across your company. 2

The people I admire most make the world exponentially thinking. It’s about creating new demand, not fighting different. to capture existing demand. Not incrementally better. As an entrepreneur, CEO, or CMO, you have to ask That’s why I admire them. yourself: are you playing someone else’s game, or do you have the courage to create and design your own And if you think about it, you might find that the people market category? Foreword you admire most are the ones that break and take new If you do, you’re reading the right shit. ground. That is to say, the most legendary people are original. You see, my friend John Rougeux is a category designer. In business, they introduce the world to a new category He’s created this super thoughtful, well-researched of product or service. paper to help you become a category designer, too. They are category designers. Category designers succeed by giving us new ways of living, thinking, or doing business, many times solving a They aren’t making anything that incrementally problem we didn’t know we had, or a problem we didn’t improves on what came before. They don’t “make” pay attention to because we never thought there was better. another way. They market differently – and earn two thirds of the And right now, the world needs more people who value in their market category.* Primary research will step up to solve massive problems and create 2 published in Play Bigger and The Harvard Business meaningful change. Review. So, as you read this paper and go forward, I wish for you That’s why the discipline of category design has the courage to follow your ‘different,’ while creating emerged from Silicon Valley to become a worldwide massive new value and the legendary success that phenomenon. comes with it. Our first book on the topic – Play Bigger – is now in the top 5% of business books, and our podcast on the topic, Lochhead on Marketing, hit number one on the Apple business and marketing charts in the U.S. and has been downloaded in 181 other countries. That happened because category design has emerged Christopher Lochhead as an “unfair” advantage. The founder of a roofing #1 Apple Podcaster | #1 Amazon company on the east coast recently said to me, “I almost Author | Category Designer feel bad for my old competitors.” Santa Cruz, California Category design is NOT about competing in any traditional sense. It’s about radical differentiation. It’s about becoming known for a niche that you own. It’s about evangelizing a point of view that changes The Newcomer’s Guide to Category Design 3

I remember it like it was yesterday. “If you can’t be first Finally, I started working on category design myself. 1 in a category, set up a new category you can be first in .” I first introduced the idea at an Australia-based SaaS I had just read those words from Al Ries and Jack Trout, company called Skyfii (I joined for a brief stint after and they forever changed the way I looked at marketing. they acquired a startup I co-founded). More recently, Prior to that day, I had only looked at marketing I’ve been working with our team at BombBomb on through the lens of “capturing marketing share”. And exploring and executing this strategy here in the U.S. Introduction why wouldn’t I? You could fill libraries with books about Along the way, I realized two things: strategies and tactics for capturing market share, and Category design is a “must-do” business strategy for a for good reason: many of world’s largest and most growing number of businesses that are bringing new profitable companies have wrested market share away solutions to life. That’s because it’s specifically designed from their competitors (or kept them from getting it to help the market understand the need for solutions in the first place). they aren’t even aware of yet. But I had just one challenge with that approach: the Working with your team to evaluate, understand, and glove didn’t fit. I had spent the bulk of my career adopt the process of category design is harder than it working on ideas that represented something novel: a sounds. It represents a fundamental change in how you new way of tackling a problem or solving a problem that approach business, and it has far-reaching effects and hadn’t even been addressed before. And I found that long-term ramifications for your team. the “capture market share” playbook I had so eagerly learned about in school simply wasn’t helping me much. That’s why I wrote this guide. That’s why those words about “setting up a new Despite its utility, category design is still not on the category” hit me so hard. I had never considered the radar of most marketing and business leaders. For the idea of stepping outside the bounds of existing markets few who have heard of it, more often than not, they’re to create an entirely new category. But when I looked not sure if it’s applicable or even how to get started. This back at the businesses I had worked on, that’s exactly guide will change that. what we should have done. First, it will help you understand why category There was just one problem: I had no idea how to design is worth considering, what pursuing it looks create a new category. So I set out on a quest to learn like in practice, and whether it makes sense for your everything I could about the topic. First, I dove into business to adopt it. Secondly, this guide will equip a book a friend recommended called Play Bigger. you with a process that you and your team can use to This groundbreaking book not only coined the term explore, discuss, and adopt category design within your “category design,” but also provided the first blueprint company. on how to build and lead a category. As you’ll soon see, category design isn’t an add-on, a Next, I set out to interview every accomplished and branding or marketing play, or something you can do on aspiring category designer I could find. I met with the side. It represents a fundamental change in the way founders and C-level execs from category kings like your business looks at growth. Pursuing it may be the Salesforce, HubSpot, and Drift, and with enterprising most important (and profitable) choice your company people at smaller companies you probably haven’t heard ever makes. of. Along the way, I documented what these category design thinkers had learned from their experiences. The Newcomer’s Guide to Category Design 4

In fact, Christopher Lochhead, one of the most prolific The material you’ll find in this guide comes from the category designers of all time and co-author of Play following sources: Bigger told me, “The most important question a • Primarily, my own experience working on category CEO can ask is ‘how do we design and dominate our design within B2B SaaS, most recently as VP category?’” This guide will help you begin that journey. Marketing Strategy at BombBomb Here are three reasons to keep reading: • Interviews I’ve had with numerous category design If you have an idea for a new product that doesn’t mesh thinkers, including two of co-authors of Play with the existing categories your buyers are already Bigger, Christopher Lochhead and Kevin Maney familiar with, this guide will show you a blueprint that • Lessons I’ve gleaned from books that should be in The most important will greatly improve your odds of success. any category designer’s library question a CEO can ask If you’ve been competing in an existing market, but Before you dive in, here’s a note of caution: this isn’t “ have struggled to gain traction against competitors, this a resource that’s going to provide you with a neat is ‘how do we design and guide will present a path for you to break free. little tactic or a few smart tips you can work into dominate our category? If you want to be better prepared in an uncertain your business. If you’re looking for something you ” business world, this guide will arm you with an can implement quickly and see a few quick wins, — Christopher Lochhead approach that’s akin to building an air force while your look elsewhere. But if you’re open to learning about enemies are stuck on the ground. a new way of thinking about growth – one that can dramatically alter the course of your business for the better, keep reading. The Newcomer’s Guide to Category Design 5

Category Should Be on Every Business 1Leader’s Radar See why “capturing market share” isn’t always the right approach, especially when you’re presenting a new type of Contents solution or solving a new problem. I’ve broken this guide into five parts: Category Design Is Powerful, but Not for All 2There are two things you have to evaluate before you pursue category design: your circumstances and your capabilities. This section will show you what’s necessary for each. 30,000 Foot View of the Category 3Design Process This guide isn’t intended to provide a step-by-step process for executing category design, but I do want to give you a preview of what you’ll be getting into. Hint: a lot. How to Talk with Your Team about Category 4Design (and Get Them Excited) It’s one thing to get excited about category design yourself. It’s quite another to get your team to share that excitement. In this section, I’ll show you how we did that at BombBomb. What Every Category Designer Needs 5to Know about G2 Discover the process G2 uses in evaluating new categories and learn how to get your own category listed. The Newcomer’s Guide to Category Design 6

Part I: Category Design Should Be on Every Business Leader’s Radar

If traditional strategy means battling competitors over dividends, too. Consider this research from Harvard 3 market share, category design involves setting up a new Business Review . During the period from 2009 and market where you have a better chance of dominating. 2011, just 13 of Fortune’s list of 100 fastest-growing U.S. The military equivalent would be this: instead of going companies were category creators. Yet, those 13 companies Part I: to war over a piece of land your enemy already occupies, generated 53% of this group’s revenue growth and a you seek out a new, unclaimed territory you can have all whopping 74% of its incremental market cap growth. Category Design to yourself. To show you what that looks like in practice, here are a As you’ll soon see, category design isn’t just about breaking few examples. Should Be on free of an existing category – it can pay massive financial Every Business Leader’s Radar TESLA: ELECTRIC CARS Even though this is a guide for B2B, I want to include one example from the consumer world to give you a full picture of category design. WHAT YOU’LL LEARN: You’re already familiar with Tesla as the leader in the electric car category. But what’s important about Tesla is that they Read this section to see how category design is didn’t create this category – they redesigned it in their favor. Electric cars were actually invented more than a century ago, different from the typical strategy of “capturing and other brands, like GM, have made attempts at commercializing electric cars since then. market share” by exploring the stories behind But those previous attempts had a major issue. They were positioned as “fuel-efficient” cars. By trying to sell electric cars Salesforce, HubSpot, and Tesla. I’ll walk you through as a nifty (and expensive) way of helping the environment, GM and others struggled to gain any real interest. Owning such why “category” plays an important role in the buying a car simply wasn’t desirable to many people. process, and how the thinking behind category design Tesla redefined all of that. Here’s how: has evolved through today. CATEGORY DEFINITION “ECONOMY” ELECTRIC CAR TESLA ELECTRIC CAR Buyer Drivers who value environmental Luxury/sport drivers who value impact above all conspicuous environmentalism Philosophy Having an electric car means you Having an electric car means you have to sacrifice performance should have the best performance Problem addressed Gasoline is expensive and causes Electric cars are boring and niche pollution Value defined by Fuel savings, emissions reduction Cool-factor, performance, and ownership experience The Newcomer’s Guide to Category Design 8

Tesla could have used its advanced technology to design and market cars that went head-to-head against the Prius – the Part I: leading “green” car when Tesla’s sedans were introduced. But the Prius would have won. It was cheaper, more suitable for Category Design long trips, and still fuel-efficient enough for the environmentally-conscious consumer. But by creating high-performance, technologically-advanced cars that offered a unique ownership experience, Tesla designed a category that it could easily Should Be on dominate. Every Business This process of getting buyers to shift the way they think about something is what the authors of Play Bigger refer to as a “FroTo” (as in from-to). Tesla did a fantastic job of executing this when it came to electric cars, but as you’ll see in a Leader’s Radar moment, it can work equally well in software. HUBSPOT: INBOUND MARKETING Prior to HubSpot, most demand generation would be defined by what you’d now call “outbound marketing”. Except at that time, it was just called “marketing”. Cold calls, unsolicited emails, display ads – most companies relied on tactics that involved reaching out to potential buyers. Marketing automation software was built to help marketers execute these tasks at scale, and companies like Eloqua led the pack. When Brian Halligan and Dharmesh Shah founded HubSpot in 2006, they could have positioned themselves as a “better” version of Eloqua. But they knew that head-to-head combat would be a losing proposition. Instead, they set up a new category, called “inbound marketing,” based on an entirely different philosophy. Here’s how HubSpot’s new category compared to the old way of doing things: CATEGORY DEFINITION OUTBOUND MARKETING INBOUND MARKETING Buyer Marketers focused on cold outreach Marketers focused on SEO and content Philosophy Deals are best won by interrupting Deals are best won by attracting buyers buyers Problem addressed Marketers must reach out to new Marketers must get buyers to buyers at scale come to them at scale Value defined by Efficiency gained over manual Ability to attract buyers to a brand processes HubSpot’s message was simple: if you believed that content, SEO, and social media were the future of marketing, then inbound marketing software was for you. By positioning their software around an entirely new philosophy of marketing, HubSpot was able to establish a new category and avoid a head-to-head comparison. The Newcomer’s Guide to Category Design 9

SALESFORCE: CLOUD-BASED SOFTWARE Part I: In the late ‘90s, enterprise software was installed “on-premise” – on physical servers located in the customer’s Category Design building. Sure, if you wanted to install a copy of Excel on your PC, you could use a trusty CD-ROM, but for software that used a shared database (like CRM), you had to connect to that “on-premise” server. It was expensive, time- Should Be on consuming, and tedious to maintain. But buyers didn’t know anything different. Every Business That’s why when Salesforce introduced the idea of software that could be accessed remotely, over the internet, they Leader’s Radar need to set themselves apart from the “on-prem” software that buyers were familiar with. Instead of comparing themselves directly to on-prem CRM software companies, Salesforce broke free of that paradigm and defined themselves on different terms. Heres’s what that looked like: CATEGORY DEFINITION ON-PREMISE CRM CLOUD-BASED CRM Buyer Enterprise IT Small business operator Product Philosophy Software should be accessed on- Software should be accessed via premise and paid upfront the Internet and paid monthly Problem addressed Poor access to customer data SMBs cannot afford CRM software Value defined by Data visibility vs a non-CRM Installation time and cost of usage approach Had Salesforce told enterprise customers that it could provide a better CRM than the leading on-premise offerings, it would have failed. But by defining a new category that would later be defined as cloud-based computing or SaaS, Salesforce set up a new category where they could be first. Why do categories matter? This can be extremely helpful if you’re a software buyer. If your brain already has knowledge of a software We live in a complex world. There are so many brands category, you already have a handle on key information, and products competing for our attention that there’s such as: no way for us to evaluate each one on its own merits. According to researchers at Ruhr-University Bochum, • What that product is designed to do when we encounter something novel, we compare that • What that product is not designed to do thing to existing categories our brain has created, and • Who the product is for try to find a match4. In other words, we use categories as a shortcut for processing information about thousands • How the product is sold of products. • What similar products to compare that to The Newcomer’s Guide to Category Design 10

Part I: In the B2B SaaS world, you can think of categories as a Lindsay Tjepkema is co-founder and CMO of Category Design way of grouping together comparable solutions that are Casted, and her company is building a category alternatives to solving the same problem. around conversational content. She put this idea Should Be on But unfortunately, the B2B SaaS space has become best: “Category design is what happens as you build Every Business incredibly complex. Check out this illustration of the to solve a problem in a way that has truly never been marketing technology landscape to see for yourself. This solved before. It’s NOT something you do to just grab Leader’s Radar is why being clear about your category – and building attention or stand out from the crowd.“Category design the right brand to support it – is so important. “We continues to evolve live in a time where anything can be replicated in what To help you understand where category design might be feels like real-time, and a buyer has infinite options. headed, let’s take a look at how this discipline evolved. In this world, companies can no longer differentiate I like to break down the history of category design into on features,” said David Cancel, CEO of Drift and three phases: Entrepreneur-in-Residence at Harvard Business School. “Brand is the only true marketing advantage.” The Formative Phase (Dawn of history-1980) What category design is not What was the first example of category design thinking? We live in a time The invention of banking? The telegraph or the first where anything can Hopefully you’re starting to get some clarity on what business computer? That’s a discussion for another “ category design is and how it works. But what’s helped time, but the point is that for as long as businesses be replicated in what me the most when explaining the concept to others is have strategically built new markets around solutions feels like real-time, to clarify what category design isn’t. to new problems, category design has existed. For most • It’s not a marketing campaign. Category design of history though, there just wasn’t a term for it. and a buyer has infinite is a business strategy, not a marketing strategy. options. In this world, It affects and requires the involvement of nearly The Blueprint Phase (1981-2016) every area of your company. When Positioning: The Battle for Your Mind5 was companies can no published in 1981 and The 22 Immutable Laws of longer differentiate on • It’s not the same as a tagline. New markets don’t Marketing was published in 1993 (both by Al Ries and get built because some company coined a new Jack Trout), they were the first books to set up the features? phrase. They get built because buyers recognize a idea that companies should be intentional about their ” new problem and see the need for a new solution. position in the market. And it was the latter of these — David Cancel • It’s not something specific to your company. A books that introduced the idea of intentionally setting category can’t exist if there’s just one company in up a new category. it. At least not for long. Category designers have to Crossing the Chasm4 continued that thinking by think about building a space that others can help showing us how to take new ideas to the early majority evangelize. – a key ingredient in legitimizing a new category. • It’s not a substitute for having a great product. Later, The Innovator’s Dilemma7 demonstrated how Category design isn’t about tricking buyers. It’s breakthrough innovations often have greater initial about delivering a meaningful and helpful solution success when used in a different application than earlier to a new problem. technology. The Newcomer’s Guide to Category Design 11

Part I: Finally, in 2016, a book called Play Bigger was written Should you attempt category design by Al Ramadan, Dave Peterson, Christopher Lochhead, yourself? Category Design and Kevin Maney. While the books I mentioned above Should Be on are great on theory, they are short on execution. At this point, category design might sound pretty Play Bigger changed that by providing the first clear exciting. After all, who doesn’t want to be the next Every Business blueprint for pulling off category design. It’s a must- Salesforce or HubSpot – to build and dominate a Leader’s Radar read for anyone interested in the topic. Once you’ve new market on their own terms? But this process of read it, check out this resource from Category Design “claiming new territory” isn’t something you should Advisors that has further reading ideas. pick capriciously. In fact, it’s not something many companies should even attempt. Instead of pursuing The Beta Phase (2017-Present) category design, you may be much better off pursuing Now that category design has started to become a niche within an existing category. recognized as a business discipline, we are seeing more No one makes this choice clearer than Mike Volpe, the There are really only two companies make an attempt at it. This will only increase founding CMO of HubSpot and CEO of Lola.com, business models: a Better as the pace of change and innovation continues to who said, “There are really only two business models: “ accelerate. We’re seeing category design happen a Better Mousetrap, where you enter an existing market Mousetrap, where you with both single-product companies and enterprise with a product that is better than the current solutions enter an existing market companies. There’s still a lot of experimentation I see in some way, and a Category Creator, where you are happening along the way, and more and more people creating a market that does not exist by inventing with a product that is are documenting their experiences. something new. Neither business model is better, they better than the current You should know that if category design is something just have different implications for what you need to do you choose to pursue on your own, you need to think of in order to grow.” (Here’s my full interview with Mike.) solutions in some way, and yourself as a “beta tester” – we have the broad pieces in Are you better off building a category or competing in a Category Creator, where place, but there is still much that needs to be discovered! an existing one? To find out, take a look at Part II: Does you are creating a market Category Design Make Sense for Your Company? that does not exist by inventing something new. ” Recap: — Mike Volpe Category design provides a different approach to growth. Instead of trying to take away market share from competitors, category designers set up a new category that they can lead themselves. Buyers use categories to make sense of a complex world, so companies need to be thoughtful about their choice of category. The term “category design” was coined in the 2016 book Play Bigger, but books like Positioning, The 22 Immutable Laws of Marketing, Crossing the Chasm, and The Innovator’s Dilemma paved the way for this way of thinking. Finally, category design isn’t a marketing strategy, it’s a business strategy. Marketing only happens after category design takes place. The Newcomer’s Guide to Category Design 12

Part II: Category Design Is Powerful, but Not For All

Spoiler alert: category design is probably not the represents the reversal. It involves focusing on the best right strategy for your company. As I mentioned in accounts first, then developing campaigns based on part one, it requires a sizable investment of time and getting their attention alone. By developing software resources. This requires the right capabilities. But to help with this, and by heavily evangelizing ABM on your circumstances are just as important. For category the side, Terminus developed a new category around Part II: design to make sense, you need to solve a new problem this new solution. or solve an existing problem in a new way. Category Design Here’s how to assess circumstances and capabilities for GAINSIGHT: SOLVE A NEW PROBLEM your own company: Not more than a decade ago, the term customer success Is Powerful, but wasn’t on anyone’s radar. It wasn’t part of a job title, the Circumstances: don’t pursue category name of a department, or an established discipline. But Not For All design without a “different” solution as SaaS companies recognized that churn and account Having the right circumstances for category design expansion represented the potential for major revenue is all about having a new angle on solving a problem. loss or gain, respectively, they started to pay more Remember, categories are ways of grouping similar attention to proactively serving customers after the products together – products that aim to solve the same sale. With that, the customer success discipline was problem. born – an entirely different approach than the more reactive customer support role. WHAT YOU’LL LEARN: There are two ways to think about this: you can solve a With this development, though, a new problem In this section, I’ll show you why your company needs new problem that has recently emerged (one that there emerged: customer success teams didn’t have software the right set of circumstances before category design are no solutions to). Or you can bring a new approach built for their unique role. Help desk software that can apply. I’ll provide 14 questions to help you assess to solving an old problem, an approach so unique that customer support teams used just wasn’t cut out for it. these circumstances. I’ll also show you how your comparisons with old solutions don’t make much sense. Enter Gainsight. By creating customer success software, company also needs to have the right capabilities before Here’s an example of each. they were able to solve a new problem that had emerged. embarking on this journey, too. Finally, you’ll see how Gainsight wasn’t the only company to develop customer category design isn’t just about breaking free from TERMINUS: OFFER A DIFFERENT SOLUTION TO success software, but they were better than anyone else existing markets – it’s about a decision to ultimately AN OLD PROBLEM at evangelizing customer success as a new idea. As we’ll become a category leader. Marketers have dealt with inefficient and ineffective later see, that’s a big part of category design. tactics since the beginning of time. We’ve wasted plenty There’s one distinction worth mentioning with this of money on ads delivered to the wrong audience, or idea of solving a new problem. Sometimes, this problem on capturing leads that had no intention of buying. is one your buyers are already aware of. But it’s just as There have been plenty of solutions to help us solve likely that buyers may not even be aware that they have this, too – tools for retargeting, attribution, finding a problem. As a category designer, it may be your job the right audiences, intent data, and so on. Terminus, to show them. though, provided a novel approach, called account- These examples have one thing in common. Neither based marketing (ABM) that attempts to solve this Terminus’ account-based marketing software or problem in an entirely new way. Gainsight’s customer success software would have If the old demand generation approach meant fared very well if they were positioned in existing capturing a bunch of leads at the top of the funnel and categories. That shouldn’t be a surprise though. These working to convert them, account-based marketing new categories were aimed at a new type of buyer The Newcomer’s Guide to Category Design 14

and defined success in a new way. And each performed improvement way things have always been done? Part II: different functions that existing products didn’t address. • Does your solution represent a different Category Design For those reasons, trying to compare ABM tools to philosophy and/or radically new approach to Is Powerful, but demand-gen tools, or customer success software to solving a problem? help desk software would be like comparing apples • Does your solution require a totally different way Not For All and oranges – an unfair comparison that would have of measuring value or defining success? only led to confusion. To avoid such a situation, both Terminus and Gainsight set up new categories where • Does new language need to be created to describe they could define the terms of competition in their favor. what you do? Is your solution different or better? • Would putting your solution in the framework of an existing category create confusion for These examples should make one thing clear. If you’re potential buyers? offering is truly different from other solutions out there, then you’re probably in a situation where you • When presenting your solution to potential need to create a category in order to avoid confusing buyers, do you need to spend more time teaching comparisons with products that solve other problems. them about the problem you solve than how you stack up against competitors? But if you’ve simply made an incremental improvement to something that already exists – a new feature, lower • Is there a sense that momentum is shifting cost, or faster performance – that usually doesn’t towards a “new” way of doing things (that you warrant a new category. That’s just a better version of represent) and away from an “old” way of (that something that already exists. contrasts with what you do)? There’s nothing wrong with creating something better. • If your solution went away, would customers have But trying to develop a new category when you haven’t a tough time finding a similar product they could actually built something different will only hurt you by easily switch to? confusing potential buyers. You’re better off competing • Do enough people experience the problem you for a unique position in an existing category, one that help them solve to warrant a legitimate market? buyers are already aware of and have demand for. • Are buyers generally unaware of the problem you Here’s how to understand whether your solution is help them solve? different or better • W ould comparing yourself to existing solutions While those examples from Terminus and Gainsight are make things more confusing? pretty clear cut, assessing this for yourself isn’t always so easy. Here are some questions you can ask yourself to • Would a buyer have a tough time making the find out if your solution is better or different... right comparisons to your product on their own? Would you need to teach them about a new way • Are buyers unfamiliar with solutions like yours? of looking at things? Does your solution represent something entirely new? • Is there a lack of industry or analyst coverage about your type of solution? • Does your solution represent a departure from the status quo, something bigger than an incremental If you answered yes to most of these questions, it’s likely that you’re in a situation where it’s more appropriate The Newcomer’s Guide to Category Design 15

to build a new category instead of competing for just referring to your marketing budget. Not only does Part II: market share in an existing one. But having the right category design require you to develop a new message circumstances isn’t enough. Your team has to have the and evangelize it over a period of many years. You also Category Design right capabilities if it’s going to be successful at category have to spend energy keeping your product roadmap Is Powerful, but design. on track and convincing investors, employees, and partners to wait for the payoff. All of that takes resources Not For All Not for the faint of heart: category – money yes, but also in terms of time, attention, and designers need the right capabilities energy. “Category design requires sufficient runway, Just because you’re in a situation where category design too,” said Gina Hortatsos, CMO at LogicGate, where could make sense, does that mean you’re in a position she’s designing a category to stand out from the process to pull it off? Not necessarily. Executing category design automation space. “It takes time and a tolerance for is hard, and it takes a certain kind of company to pull mistakes and frequent pivots.” it off. Here are some points to help you assess whether Can you get your leadership team on board? you’re ready. By “on board,” I don’t mean “everyone nodding their Do you have patience and perseverance? heads because the CEO said so”. Your entire executive Category design is a long-term play. It’s not a one-time team has to be excited about pursuing the strategy and campaign or something you can focus on for a quarter commit to executing category design together. That’s or two. “People are skeptical. When you create a because category design is a business strategy that category, it is hard to get people to pay you for your requires effort and input from every department. If the solution at first,” said Lindsay Tjepkema. “Getting process is something delegated to a single department, them to change the way they are thinking is hard work then the effort will fall short of its potential. – especially when you are the first.” Do you have the right culture? It will probably take a few years for an emerging In my view, this is the most important factor. Your category to turn into a legitimate market. If you’re chance at category design might look great on paper, expecting your category evangelization efforts to pay off but if your team doesn’t have the right attitude, nothing sooner than that, you’re setting yourself up for failure. else will matter. You will have to move quickly. You will have to coordinate across departments, making Do you have courage? strategic decisions without succumbing to groupthink. There will always be cynics and skeptics. And when You will have to be able to rally each other when things you try to convince them about the need for your new get tough. And most of all, you need a culture that’s category, they won’t hesitate to tell you all the reasons willing to try new things and take risks. why you’re wrong. Sticking to your guns in the face of such people takes courage and conviction. Not everyone Do you have the right investors? will be a detractor, but the minority that exists will According to Kevin Maney, “If you have investors make sure they’re heard. Especially if you start to show who are cautious and want to only go after easily- signs of success. defined markets in a me-too way, you have the wrong investors.” While category design can greatly improve Do you have enough resources? your chances of success, it also demands patience as Category design doesn’t come cheap – and I’m not you build a new market from scratch. If your investors The Newcomer’s Guide to Category Design 16

are just looking for a quick win, they may not be ready We wanted to learn more about the problems our Part II: for the journey. customers have that are more extensive and pervasive Remember, your category also needs to be lucrative than the challenges that can be solved by Mass Category Design enough to satisfy your ambitions – especially if you’re Notification. And by listening to our customers, Is Powerful, but VC-funded. Gong is a great example of a company that we realized there was a bigger market opportunity ran into this restriction. While they were the clear to provide solutions to meet these needs. A more Not For All leaders of the Conversation Intelligence category, they consolidated way to keep people safe and systems found that space to be too restrictive. Ultimately they running. And that’s how we landed on critical event decided to step outside of it. management…If done right, it’s going to have huge returns on investment for our business.” Udi Ledorgor, the company’s CMO states, “In Gong’s Jeff and his team were clearly on to something and the case, we walked away from the legacy Conversation strategy proved to be right. Since the company started Intelligence category to create the revenue intelligence working on Critical Event Management back in 2016, category, which helped us get the attention of senior the stock is up several-fold and the company now has a sales leaders, who won’t typically take a call with a market cap over $5 billion. solution provider they perceive as being tactical, which is one of the problems plaguing the Conversation Prepare to be king – or someone If you have investors Intelligence category.” else will “who are cautious Category design doesn’t always require Will you be prepared to lead this category once it’s and want to only go the entire company to shift gears established? Or will you be merely preparing the way after easily-defined While some of the examples I’ve shared involve the for a competitor to take the crown once the category is entire company focusing on a new category, that built? You need to answer this before you begin. markets in a me-too doesn’t always have to be the case. In a more mature Consider the Salesforce example from earlier. Salesforce way, you have the company, you can design a category for a new product, didn’t just establish the cloud-based software category, wrong investors. even when one of your legacy cash cows sits squarely they prepared to build, grow, and lead the category ” in an existing one. from day one. While they started as a CRM company, Consider Everbridge, a publicly-traded SaaS company it wasn’t long before they introduced other types — Kevin Maney of applications to the cloud. Through continuous that built its business in the “Mass Notification” innovation and heavy marketing, Salesforce was able category. When the company set its sights on something to maintain its position as the “category king” even more ambitious, called critical event management, that as the category grew and other cloud-based software didn’t mean it had to give up its presence in an existing companies emerged. category. Instead, category design was something additive that helped the company expand what was Consider what Bill Macaitis, Salesforce’s former SVP of possible. Marketing, told me. “At Salesforce we always believed “We knew we would always be able to solve the our brand was the sum of every single interaction a problems that are inherent within the mass notification customer had with us. This meant we were constantly category, but we’re interested in solving bigger and evolving and re-inventing how we could delight our broader problems,” Jeff Benanto, a marketing director customers at every stage. There was no endpoint, just at Everbridge (EVBG), told me in this interview about a long journey of customer-centric touchpoints.” Hear the company’s category design process. more on this in this interview with Bill. The Newcomer’s Guide to Category Design 17

But if you look at a company like Skype, things didn’t turn Are you in or out? Part II: out the same way. Back in 2006, Sykpe introduced a way Remember, category design isn’t for everyone. for multiple people to conduct a video conferencing call According to Udi Ledergor, CMO at Gong, “To ensure Category Design – all without having to purchase expensive hardware or your category will grow to a lucrative size, you’ll want software. Skype already had hundreds of millions of users, to make sure that (a) you’re solving a painful problem Is Powerful, but and they could have become the category king of video your target buyers really want to solve, (b) your target Not For All conferencing. But today that honor belongs to Zoom. buyers have the budget and authority to pay for your Skype simply did not invest enough in innovation or solution, and (c) there are enough target buyers so you marketing to earn the crown. don’t run out of customers too soon. In addition, it goes Finally, ask yourself whether you would be pursuing almost without saying, you actually need to build and category design for the right reasons. Consider this promote the right product to solve your buyers’ pain.” 8 idea from Eddie Yoon, author of Superconsumers and Here’s my interview with Udi. At Salesforce we always growth strategist to category creators in the Fortune There’s a chance you’ve read the above and realize that 100 and leading VC-backed upstarts. According to category design doesn’t make sense for you. If so, good. believed our brand was Eddie, aspiring category designers come in two types: You’ve just saved yourself a tremendous amount of time “the sum of every single mercenaries and missionaries. and money by avoiding a project that was unlikely to interaction a customer “Mercenaries are Machiavellian,” Eddie told me. work out in the first place. “They see category creation as a means to an end, to But if you’ve gotten this far, my guess is that you’re had with us. This meant help them raise capital, build awareness, or improve experiencing a combination of excitement and we were constantly their valuation. The consumer and end-user don’t trepidation. Excitement, because I’ve just shown you really matter to them. My research shows that this a path forward that can help you avoid the “red ocean” evolving and re-inventing tends to fail in the long run. Missionaries, though, are of an existing category and build a new market for how we could delight more likely to sustain their success because they view yourself. Trepidation, because I’ve also shown you that category creation as a never-ending quest. this path isn’t a cakewalk. our customers at every They can’t stop dreaming about a future that is stage. There was no captivating, beautiful, and radically different – one But at the end of the day, if you find yourself solving that’s richly abundant and where everyone benefits. a new problem – a problem that your market doesn’t endpoint, just a long They can’t shut up about it or stop working on it, as know about and one that isn’t defined by an existing journey of customer- they are themselves the “super consumer” who is the category – then you don’t really have a choice. To ultimate muse and north star for the new category. succeed in any meaningful way, you do need to follow centric touchpoints. Ultimately, missionaries get that category creation is category design. The next section will show you what ” not a short-term play or a mere marketing strategy.” that process entails. — Bill Macaitis Recap: If your company isn’t offering something meaningfully different to the world, then category design isn’t appropriate. If that’s the case, you are betting off carving out a niche in an existing category. If you do offer something different, your team will need the right attitude, resources, and people if you’re going to succeed. Category designers need to be prepared to take and defend the leadership position in their new category. The Newcomer’s Guide to Category Design 18

Part III: A 30,000 Foot View Of The Category Design Process

Heads up: this is not a detailed, step-by-step, paint- As you’ll see in a moment, much of the messaging by-numbers guide to building a category. That would you create around your category stems from an require a lot more than the couple thousand words understanding of the problem and the people who we have room for here. My goal is to give you a broad experience it. Get this wrong, and the rest of your overview of what the category design process entails, category design efforts will suffer. Part III: so you can have a better sense of the work involved. If This is why category designers begin by spending time you’re interested in a more specific blueprint, both Play with existing and potential customers to really dig into A 30,000 BIgger and another book called Category Creation: the problem. This quote from Play Bigger says it best: How to Build a Brand that Customers, Employees, and “When you describe the problem better than anyone 9 Foot View Of Investors Will Love , by Anthony Kennada will provide else, people assume you have the best solution.” more specifics. You can think of the category design process as Consider this example, from Terminus’ book, ABM is The Category B2B10. It highlights the problems that can arise when involving four phases: marketing is focused on leads instead of accounts. Design Process 1. Understand your audience and their problem “Marketing research firm Forrester discovered 2. Create a category story and category name that fewer than one percent of all leads turn into WHAT YOU’LL LEARN: 3. Bring your category to life customers. Put that another way: 99% of what you’re doing now doesn’t work. It’s not turning This section will give you a high-level summary 4. Evangelize your category into revenue. Your CEO and CFO are looking at of the four phases of category design, with some marketing and wondering what is going on, and no specific examples of how category designers in B2B 1. Understand your audience and one is sure what to say except that leads are coming SaaS have gone through that process. their problem in, and website clicks are up.” Remember: category design is all about solving a new Without mentioning the solution yet, as a reader, problem, or solving an old problem in a new way. you can quickly see that there’s a major problem Therefore, an understanding of this problem serves that marketers face. And it’s obvious that Terminus as the foundation for everything else you’ll do with spent time understanding how marketers work. This category design. If you understand the problem well, definition of the problem is the perfect foil for the Category designers begin then the products you build and the messaging you category Terminus has been trying to build, called by spending time with create to market it will benefit greatly. More than that, account-based marketing. “ showing the market that you fully understand this There are plenty of ways to better understand your existing and potential problem is crucial to getting your new category off the customers, too. At BombBomb, one of the most helpful customers to really dig ground. exercises we did was a survey of our “best fit” customers into the problem. However, problems don’t exist without people. To (we defined “best fit” as having a high NPS score and ” reach a full understanding of a problem, you have having used our software for more than two years). to understand the people who are experiencing that When we asked these customers a series of simple — Eddie Yoon problem. You have to have a sense of how they describe questions about the problem we help them solve, the that problem, what pain it’s causing them, and what answers we received were tremendously valuable. they are currently doing to solve the problem. You may For example, we initially assumed that our customers even discover that your audience isn’t even aware that used BombBomb’s video messaging software to solve they have a problem. It will be your job to show them. the problem of “needing better results from email”. But after talking to customers, we found that it wasn’t better The Newcomer’s Guide to Category Design 20

email results they were after, it was better relationships pain) and to a future state (where that pain is solved). Part III: with the people they do business with. The problem we The strategic narrative comes from Andy Raskin, a top solve isn’t email per se. It’s the fact that bots, spam, and advisor to B2B SaaS companies. It presents a change A 30,000 the misuse of marketing automation have conditioned that’s already happening in the world and shows how Foot View Of customers to ignore and mistrust the communication this change will create winners and losers. The narrative The Category they receive from businesses. then presents your category as a tool that will help a But remember, your customers don’t always know potential customer emerge as a winner. Design Process what they want. “Customers will only tell you they According to Andy, “A category is a strategic narrative. want better,” Kevin Maney told me. “They’ll never see It’s a narrative about the new game that the winners a different solution.” As a category designer, the onus are playing (and why the old game is obsolete) that is on you to provide that. buyers embrace to make sense of their world.” Here’s If you need help defining the problem your category my interview with Andy. solves, here’s a quick guide. Both of these approaches are similar in that they speak A category is a to a specific type of story that humans are wired to strategic narrative. 2. Create a category story and respond to. It’s called The Hero’s Journey. It’s a concept “It’s a narrative about category name developed by Joseph Campbell, a professor and author Once you have a firm grasp on the problem you’re whose research has influenced a wide range of modern the new game that the solving (and whom you’re solving it for), you need to writers and authors, including George Lucas’s work on winners are playing come up with a way to talk about the new solution to Star Wars. (and why the old game this problem. This is where your category name and The basic idea is that a story’s hero is faced with a something called a category story come into play. disruptive change to his world. The only way he can is obsolete) that buyers Category story conquer this change is through some externally- embrace to make sense granted power. Once he wields this power, he’s able Let’s start with the category story, because it’s this to surmount these challenges and return to a restored of their world. exercise that will inform your category name. world that’s better than the one he left. Find more on ” A category story is what tells the world why a new the Hero’s Journey here. If you can capture this idea in — Christopher Lochhead category needs to exist. It might be the most important your category story, you’re on the right track. element in category design because it’s the idea upon Regardless of what approach you use to create a story which the rest of your messaging will be based. There around your category, it will need to accomplish the are a couple of ways to approach your category story: following things: the point-of-view and the strategic narrative. • Highlight the pain that your audience experiences The point of view is a concept that comes from Play from the problem you defined earlier Bigger. While marketers have long enjoyed introducing • Demonstrate how current approaches to solving things that are “new”, a point of view shows the world this problem don’t exist or are no longer adequate why a category needs to exist. It’s a short narrative (or “movie-trailer” as the co-authors refer to it), that • P oint to your new category as a new (and different) shows the market what the world will look like once this solution to solving this problem new category is established. It’s framed on that idea of • Create contrast between life before the category moving the world from a former state (that was causing and what life will be like after the category The Newcomer’s Guide to Category Design 21

• Cast a vision that can excite your customers, When your brand is defining its category story, you Part III: partners, and investors and serve as a north star may decide to pick an “enemy” to help drive contrast for your company strategy between existing categories and the new one you’re A 30,000 As a bonus, if you can show how the world is changing, building. “In the early days of building the “learning Foot View Of and how these changes give rise to the need for your experience platform (LXP)” category, we positioned category, your story will be especially strong. Check ‘learning management systems (LMS)’ as the enemy,” The Category out Andy Raskin’s The Best Sales Deck I’ve Ever Seen said Brad Zomick, a B2B marketing advisor and for more on this. previously VP of Marketing at Pathgather and Degreed Design Process (LXP category leaders). Generally, the category story is an internal document “Whereas the LMS was built around the needs of the or presentation that guides your company strategy and person administering the education, the new category serves as a foundation for your external messages. But we built was geared towards the needs of the learner. you can also develop an outward-facing version, too. That contrast created clarity for what our category Check out Gainsight’s guide to customer success as stood for and helped fuel our growth.” an example. “Getting your category story right is going to take time,” Remember that your category story isn’t just about you. Getting your says Anna Schena, Director of Growth Marketing at It’s not a pitch for your particular product or company, Narrative Science. “It is much, much harder than it’s a pitch for the category. One it’s been developed, category story it sounds, and will likely require several rounds of you’ll need to think through the right positioning, “right is going to iteration before it is right.” branding, and messaging to support it. take time, it is For context, Anna is building a category they call data Want to learn about the process we used at BombBomb storytelling. Their category story is based around to create our own category name and category story? I’ll much, much harder the idea turns a company’s data into plain-English share more on the Flag and Frontier newsletter. than it sounds. stories that people can more easily understand, all Category name ” automatically. — Anna Schena A category name is as simple as it sounds: it’s a short Sarah Elkins understands the challenge of creating a phrase that gives the category a reference point. category story as well. “It was very time-consuming for Examples are account-based marketing (Terminus), us,” she told me. “For a company that was very technical cloud-based software (Salesforce), and revenue we had to really focus on business language, and getting intelligence (Gong). people out of the technical weeds. That was hard. But it was worth it. I recommend pushing through the The category name does not need to fully describe what frustration.” the category is all about. Its main job is to point your audience’s thinking in the right direction. It will offer a But very much worth the time spent. I’d always new (and perhaps intriguing, provocative, or polarizing) recommend that people really focus on this step phrase that serves as a conversation starter. Finally, and push through the frustration. This is also where the category name provides consistency when talking buy-in becomes really important as you need people about your new category. Here are a few things to keep to push through this process with you. But it’s worth in mind when coming up with a category name. the investment. As I already mentioned, your category story will serve as the foundation for the remainder of • Avoid a category name that’s so broad that it your category design efforts, and you can’t afford to could apply to a number of different problems get it wrong. and solutions. Similarly, a category name should The Newcomer’s Guide to Category Design 22

not apply only to your company. Stay away from us, said Sarah. “We had to do a lot of work internally Part III: branded or trademarked terms. to convince people that picking the perfect name that A 30,000 • Consider whether the category name should everyone loved was never going to happen. That was build upon familiar terms or be entirely new. okay. You often see variations in the category name. Foot View Of Something too similar may be written off as Analysts often give categories names that are not the something your audience “already knows about.” ones used by vendors, for example. The most important The Category But something too foreign may be too difficult thing for us was to define the problem and create a point Design Process to grasp. “We ended up picking something of view. That’s what people should focus on.” that was similar to another term people in But the company didn’t choose a new category name our industry used,” said Sarah Elkins, VP, purely for semantics. Skyfii’s solution not only fused Demand Generation at Tasktop Technologies. together data from digital and physical sources (think “In the end, the name we picked best reflected airports, stadiums, retail outlets), its data scientists what people would call this category, and we were heavily involved in adding meaning to that data. went ahead knowing we’d have to do some work Neither of these characteristics was reflected in existing Remember that your to differentiate between the two terms.” Sarah categories. category story isn’t and her team ended up selecting value stream “ management for their category name, after Official vs. unofficial category names just about you. It’s realising that implementations of Agile and When I say category name, I’m not necessarily referring not a pitch for your DevOps were failing at scale. to the “official” terms that G2 and other review sites use. particular product or • Make sure the category name isn’t already used Sometimes, those official category names are the same in another context. Just because nobody in B2B ones used in conversation, like “project management company, it’s a pitch SaaS is using this term doesn’t mean it’s not used software”. When those line up with the category name for the category. in another industry. You’ll spend too much time you’ve defined yourself, that’s a bonus. But other times, ” battling for search traffic if this is the case. they diverge. For example, you won’t find “inbound marketing software” anywhere on G2, but that’s as — Brad Zomick • A category name that’s hard to pronounce or legitimate a category as any. remember. Your goal is to evangelize the category. Just like a good brand or product name, the The reverse is also worth considering. category name should be something that can stick Sometimes an “official” category name on G2 is never in your mind and be pleasant to say. used in practice, and you need to come up with your • Your category name doesn’t have to be perfect. It’s own. At BombBomb, we found ourselves in the “other unlikely everyone on your team will agree on it. If video software” category. This isn’t really a category, it’s close enough, then move on. It may also morph and it’s certainly not a term buyers are actively over time. Listen to the market – if it changes it to searching for. At the same time, our next best option an acronym, use the acronym. If it changes a word, was “video hosting software,” a category that covers a adapt. Defining the problem and category story is lot of unrelated solutions. Listing ourselves there would more important. lead to confusion for our buyers. To solve this, we’re actively working on a better term to describe what we While the category name may only consist of a few and our direct competitors do. Once that’s established, words, it may not be easy to land on one. “The name it will only help the entire category grow. of the category was a major source of contention for The Newcomer’s Guide to Category Design 23

3. Bring your category to life position. Ideally, this should live in a document called Part III: a messaging framework. Just like designers have a A category name and category story are just the visual identity guide, a messaging framework provides A 30,000 building blocks. Ultimately, the concepts you develop a reference for how to talk about your company and through those exercises need to be supported by your products in different contexts. Foot View Of your positioning, messaging, visual identity, product The Category roadmap, and pricing and packaging. Here’s how you’ll Depending on how radically you need to depart from need to think about each: the past, you might need full rework of your messaging. Design Process Be prepared, as this work will also take time to get right. Positioning But remember, you are trying to show the world that Positioning is simply the idea you want to conjure up in you’re different from anything else it’s encountered the minds of your buyers when they think about you. A before, and the words can go a long way to accomplish positioning strategy is often created in the context of that. Need help with this building a messaging how you’ll relate to competitors. framework? Here’s a guide for getting started. If the category Here’s how Andy Cunningham, one of the top Visual identity “potential is real, you’ll marketing and PR people in Silicon Valley, thinks about Chances are your visual identity may need some see competitors start positioning: “Now that you understand what category revisions to help establish your category design goals you’re in, what’s your differentiator? What is your role? as well. Maybe there are new attitudes your brand to emerge pretty What is your relevance? To me, that’s what positioning needs to reflect, or perhaps you want to upgrade to your quickly. Baking in your is. It’s the dot on the map inside that category.” Check visual identity as a way of signaling new intentions. For out my interview with Andy about positioning. some, this might represent a small change to colors or differentiation from the But category designers also have to answer the question: typography. beginning – preferably how is category leadership defined? “If the category For others, it might represent an entire rebrand. For one with a high barrier potential is real, you’ll see competitors start to emerge example, when Splunk developed a “data-to-everything” pretty quickly,” said Gina who also built the supply strategy, it created a new pink-and-orange livery to to entry – will insulate chain visibility category while at FourKites. “Baking in help announce the change. Remember, “Brands, or you somewhat. your differentiation from the beginning – preferably category leaders, die by a death of a thousand cuts,” ” one with a high barrier to entry – will insulate you says Anna Schena. “Small things that take away from — Andy Cunningham somewhat.” your brand, or the category you are creating, build over To help you build a position of differentiation based time. Even though they seem trivial, they can make all on your strengths, check out Andy’s book, called Get to of the difference.” Aha!11. It will help you find out if your company is wired to be a mother (customer-experience driven company), Product roadmap a mechanic (product-driven company), or a missionary Your product roadmap will do one of two things: it will (concept-driven company). At BombBomb, we found bring you closer to your category design goals, or it will out we’re a Mother, and we are using that to help us pull you in the wrong direction. Hopefully, though, your build future-proof our category leadership. plans for category design can serve as a lens through which to view your product roadmap. You can start Messaging with a simple question: does this work help us build Once you develop your positioning strategy, you’ll need the category, or not? If you’re not sure, then it probably to create the right messaging to help you establish that means you haven’t gotten enough clarity on what your The Newcomer’s Guide to Category Design 24

category is and what it means for your company. Go back which then fuels investment in your products and Part III: and reassess this work if that’s the case. evangelizing the category. With this flywheel effect, perception creates reality. A 30,000 Packaging and pricing But evangelizing the category involves more than Foot View Of For a SaaS product, packaging simply means the way presenting a logical explanation of the facts. You must you’ve broken your products into discrete offerings. ignite emotion, too. If you can trigger one or both of the The Category Why is this a consideration for category design? There core buying emotions (fear and greed), then you’ll have Design Process are two reasons. The first is that your goal as a category a much better chance of making the category a reality designer is to build the category first. That means you and being seen as its leader. may need to think through how packing and pricing will affect your ability to get your product in the hands You can think of the category evangelization process as of the right people. three on-going streams of work: creating content and executing lightning strikes. The second reason is more long-term focused. As the aspiring category king, it’s your job to define the terms Create content of competition. If you become the king, then whatever My favorite way to think about content comes from choices you make for pricing and packaging will likely Dave Gerhardt, CMO of Privy and former VP Marketing become the standard. For example, when Salesforce at Drift. It’s the idea of “sets and reps”. In this interview, offered month-to-month pricing plans, that was a novel he explained that just like a weightlifter needs to get in idea for software. But it soon became the norm for SaaS. his “sets and reps” to build strength, a category designer 4. Evangelize your category needs to talk about their new category day in and day out. Your category story needs to be reflected on your Once you’ve worked through the steps above, you still website, in your sales decks, throughout your marketing don’t have a category. You only have the raw ingredients collateral, on podcast interviews, and so on. In other needed to make one. You need to tell the world about words, if you’re talking about your company, you should your category, and you need to do that better than be talking about the category. To do this right, involve anyone else. That’s where the process of category your sales, marketing, and product teams to make them evangelization takes place. feel like they are a part of the process. There’s something you should know before you begin this Don’t stop there, though. Your efforts also need to be process of evangelizing your category. Perception is reality. supported by a category-centric content production plan. When you first begin, you will NOT be a category king. Create and promote blog posts, videos, webinars, podcasts, That’s because your category doesn’t exist yet. That’s social media content, guides, etc. that show the world why on day one, you don’t need to tell the story of what this new category looks like and why it needs to exist. present reality. What you do need to focus on, though, For a great example of this, take a look at WebPT, a is a future reality. On creating the perception that this company that’s designing a new category around cloud- category is already coming into its own, and that your based tools for physical therapy offices. “We built this company is poised to become its leader. tremendous education engine around the business side According to Play Bigger, the company that does the of our industry,” said WebPT Co-founder and Chief best job of describing a buyer’s problem will be assumed Clinical Officer, Heidi Jannenga PT, DPT, ATC. to have the best solution to it. That assumption leads “This has become core to our business and a key to new business. That business generates revenue, contributor to our growth. Through educational blog The Newcomer’s Guide to Category Design 25

content, white papers, guides, webinars, a robust annual If done well, evangelization tactics like this not only report, and other content, we’ve become a trusted and help build the category but will help you position your Part III: credible partner in the rehab therapy space – something company as its leader. Remember: when buyers see that A 30,000 I think is mission-critical when you’re carving out a you understand the problem the best, they will assume Foot View Of new, unknown category.” you have the best solution. Heidi continued, “We also host an annual conference Execute lightning strikes The Category called Ascend that’s open to anyone in the rehab therapy community – not just WebPT members – who Here’s the bad news. Even if you do a great job of Design Process want to learn how to improve business operations, their building content that promotes your category, it’s clinic’s bottom line, and excel as a therapy professional. probably not going to be enough to get the job done. Because we’ve focused on being advocates first and There are so many things competing for your audience’s foremost for the rehab therapy profession by putting attention, that in order to get them to sit up and engage out valuable educational content, we’ve become the in a new way of thinking, you’ll need to do something third-most sought-after resource for compliance and much louder to break through all that noise. billing in rehab therapy, behind only the Centers for That’s where “lightning strikes” (a term that the Play Medicare and Medicaid Services and the American Bigger team developed) come in. Lightning strikes are Physical Therapy Association. This has created a robust high-profile, high-effort, all-department blitzes that Writing and promoting funnel of prospective customers who already know involve a lot more than simply adding dollars to a and respect the WebPT brand because of what we’ve conventional marketing campaign. The goal is to shock “a book is one of the done in terms of education and advocacy. Because we’ve the world into seeing things in a new way and to see you most strategic things established that trust when they’re ready to implement as the inevitable category king. new technology, they think of us first.” Here’s the full you can do when interview with Heidi. The most famous example of a lightning strike is you’re trying to build a Salesforce’s No Software protest. The company stages Also, consider writing a book: this seems to be de a mock protest outside the venue where Seibel System category. rigueur for B2B category designers today. It’s what we (the leading on-prem CRM company) was holding ” did at BombBomb, and it’s been a huge asset in helping its annual event. Thousands of Seibel employees, — James Carbary us spread the word about the power of video messaging customers, partners, and analysts were forced to walk (check out Rehumanize Your Business12 by Ethan past these protesters, all of whom were demanding an Beute and Steve Pacinelli). Other examples include end to software as the world knew it. 13 Conversational Marketing by David Cancel and Dave 14 Here are further points on how lightning strikes differ Gerhardt, Inbound Marketing by Brian Halligan and Dharmesh Shah, ABM is B2B by Eric Spett and Sangram from traditional marketing campaigns: 15 Vajre, and Sales Engagement by Manny Medina, Max • M ore than marketing. Unlike an ad campaign, Altschuler, and Mark Kosoglow. lightning strikes will involve departments outside James Carbary, CEO of SweetFish Media and author of marketing. For example, you could turn a major 16 product release into a lightning strike that involves of Content-Based Networking , told me “Writing and promoting a book is one of the most strategic things you product, engineering, marketing, and PR. can do when you’re trying to build a category. I decided • High intensity. By their very nature, lightning to do just that with Content-Based Networking. I strikes require a high level of concentrated effort. actually just got a text from a possible customer telling Be prepared to break up your routine and commit me that he ordered a box of my books for his entire team to making them happen. that he wants me to sign.” The Newcomer’s Guide to Category Design 26

• Only a few per year. You can run a new marketing from Guy and Sangram, but he also learned from Dan Part III: campaign every month, but not a lightning strike. Steinman and Dave Isbitski, evangelists at Gainsight A 30,000 Expect to pull off two to four in a year. and Amazon, respectively. If you’re considering this play Foot View Of • F ocused on your category first. Lightning strikes yourself, check out these 10 tips on tech evangelism. are designed to help the world see the need for a Category design is a constant battle The Category new category. If all you’re doing is promoting your own brand, you’re missing the big picture. Category design is something you have to push forward Design Process every day – and for a long period of time. There will Bonus tactic: hire a chief evangelist always be distractions and “shiny new objects” that “When you are trying to create a category, having no tempt your team to go off track. It’s your job to ground voice behind the rallying cry makes it very difficult,” says your team back to reality and keep the company focused Derrick Thomas, a marketing manager at SaaSOptics. on your category story. “That’s why you need to have an executive or a point “Category design isn’t something you have to start on day person to rally around – someone to become your one and finish 20 days later,” says Mike Damphousse, a The essence of evangelist and protagonist. This is someone who is active partner at Category Design Advisors. “Category designs evangelism is basically, on social media and shouting your new category from an ongoing discipline of how to do business. It takes years “’Good news! There’s a the mountaintops. People follow people, not companies”. to build a category. In fact, the average is six to 10 years One of the most effective ways to do this is by hiring a to get a fully established category.” better way!’ You have dedicated Chief Evangelist. The most famous example Yes, you’re going to sound like a broken record, but a powerful, positive may be Guy Kawasaki, who evangelized Apple through that’s just part of the process. Your audience will need story to tell and one that the ‘90s and now does the same at Canva. More recent much more time to internalize the problem then your examples include Sangram Vajre (co-founder and Chief own team will, so stay persistent! You’ll be glad you did people really like to hear. Evangelist at Terminus) and my colleague Ethan Beute in the long run. (Chief Evangelist at BombBomb). It’s a new conversation There you have it. The process for building a category that people suffering According to Ethan, “The essence of evangelism is isn’t that complicated. But that doesn’t mean it’s easy. basically, ’Good news! There’s a better way!’ You have Nor is it something that a single person can do – in the problem tend to a powerful, positive story to tell and one that people order to get category design to work as a company enjoy having. really like to hear. It’s a new conversation that people strategy, you have to get your entire team on board with ” suffering the problem tend to enjoy having.” Prior to the process first. To find out how to do that successfully, becoming an evangelist, Ethan connected not only read Part IV: How To Get Buy-In From Your Team. — Ethan Beute Recap: You can think of the category design process as involving four phases: understand your audience and their problem; create a category name and category story; bring your category to life; evangelize your category. Category designers often hire chief evangelists to help with this phase. If you decide to pursue category design, prepare for the hard work it will take to keep your team focused over the long haul. The Newcomer’s Guide to Category Design 27

Part IV: How to Talk With Your Team About Category Design (and Get Them Excited)

Category design is a team effort. Not only does it affect to pursue it. They also need to have a solid relationship nearly everyone in your company in one way or another, with the CEO and the leadership team. Category design but pulling it off successfully also requires the support will require their commitment, and this person needs of every department. to be in a position where they can make that ask. If this “Category design will affect your job, whether you’re isn’t you, consider finding an ally who’s more suited to Part IV: in customer success, sales development, product, the task. HR, and so on,” Darin told me. “Take accounting, for For me, I was all but mandated to explore category How to Talk example. Category design can impact billing, spend on design – looking at ideas like this is part of my job marketing, expenses, and so on. Your accounting team description. But I didn’t try to go it alone either. As With Your Team will naturally ask questions like why are we doing this? someone very new to my company (I had only been at What’s this for? How much are we going to spend on BombBomb a few months when we kicked this off), I About Category this? Well, if you understand the “why” behind category also worked with my CMO, our President, and our CEO design, those questions become easier to answer.” on discussing this with our leadership team. I also had Before you can get there, though your CEO, your dozens of conversations with people throughout the Design (and Get executive team, and your department heads should be company early on, so I could better assess the culture, on board. But how do you go about that? Well, I’ve gone the state of the business today, and what our leadership Them Excited) through this exact process at BombBomb, and in this desired for the future. section I’ll share how we did it. 2. Start the discussion with your CEO WHAT YOU’LL LEARN: Looking back on what we went through, I can break Before I walk through the process of getting buy-in from I wrote this section based on going through this exact down our process into seven steps: your team, remember this one thing first: your CEO process at BombBomb. 1. F ind the right person to spearhead the has to be a core part of your category design efforts. I’ll show you why getting your team on board in the conversation I learned this early on, when Chris Orlob, Director of early stages of category design is the most important 2. Start the discussion with your CEO Sales at Gong, told me, “If you do not have your CEO part of the process. I’ll walk you through a specific plan 3. Build buy-in across your leadership team directly involved in your category creation efforts, it’s you can use to introduce category design to your CEO 4. Make the call probably going to fail.” and executive team, make the decision together, and 5. Create a task force While category design involves a heck-of-a-lot of then get your entire company involved with and excited 6. Bring your team along on the journey marketing, it’s ultimately a business strategy. It’s your for the process. 7. Create a feedback loop CEO who leads the business (not your marketing Throughout this section you’ll also find several pointers As you read through this process, keep in mind that team), so you cannot begin the process without her full from our two co-founders: Conor McCluskey, our CEO, this is a process that worked for our company. Your support and involvement. Hear more on why the CEO and Darin Dawson, our President. situation and your culture might be different, so feel needs to be involved in this interview I held with Chris. free to adapt this accordingly. Conor McCluskey, our CEO at BombBomb, told me, “Category design is a pivotal part of your plans for the 1. Find the right person to spearhead future. It can’t be a side project. As CEO, you need to get the conversation into the details of this strategy and have an informed Like any initiative, you have to start by figuring opinion of where you’re headed. That’s your job as a out who’s going to spearhead the category design leader.” exploration process. Whoever it is should have more But how do you begin this conversation with your CEO? than just a knowledge of category design and the desire Well, think of it more like a conversation, and less of The Newcomer’s Guide to Category Design 29

something you need to “convince” them of. Ultimately, “For me, the lightbulb that went off was when I realized Part IV: like any strategic decision, you’ll have better support that we were no longer the only company trying to long term if you help the CEO make the decision for make personal, one-to-one video a thing,” he shared. How to Talk With themselves. “Once I saw that the space had been validated by Your Team About Here’s what Conor advises. “Everybody comes to the competitors, and that there’s a major market taking CEO with tons of ideas. So if you’re trying to get your shape, I knew that we couldn’t afford to wait any longer Category Design own CEO to explore category design, don’t start by on category design. (and Get Them trying to provide the answer. Instead, ask questions. 3. Build buy-in across your Questions like: what do you think the future of our leadership team Excited) company will look like, and how do you think about our strategy? Making the call on category design needs to extend past You may even find out that your CEO doesn’t have a the CEO. Sure, your CEO can put down a mandate, desire to be a category leader, which will save you a but you’ll be much better off in the long run if your bunch of wasted effort. But once you know how she leadership team is supportive before the decision is thinks about those things, you’ll know how to frame made. You can’t just expect the conversation around category design.” “Don’t talk exclusively with your CEO and risk all people to get on At BombBomb, these conversations led to a few your capital there,” Conor told me. “At the same time, “ conclusions. First, it was clear that our business had you also need to build your case with the rest of your board immediately,” a strong desire to move into larger, more strategic leadership team. Because typically, once you bring up said Darin. “Instead, I accounts, and we had already made several investments category design, your CEO is going to talk to the other started this process by to help us get there. Secondly, we saw that our emerging executives to hear their thoughts. You want them to category was going to happen “with or without us,” and have a chance to think through this so they support having conversations we needed to make a conscious choice of how we were the discussion.” and asking questions, going to participate in that. Finally, we realized that Just like the conversation with your CEO, the worst the tenure and experience of our team could provide thing you can do when approaching your leadership helping our team see us with some advantages that could help us emerge as team is come in too hot, guns blazing, trying to convince for themselves that we the category leader. everyone that category design is the way to go. Ideally, might need to look at We then used these conclusions as a lens for discussing you want to let each person get there on their own. category design. Instead of looking at category design For now, focus on creating a situation in which your things differently.” in the abstract, we were able to talk about specific ways leadership team is open to and interested in the idea. it could help us achieve goals we already had in place. “You can’t just expect people to get on board — Conor McKluskey Remember, don’t expect your CEO to buy-in immediately,” said Darin. “Instead, I started this process immediately. Chances are, you needed some time by having conversations and asking questions, helping to work through this yourself, and that will only be our team see for themselves that we might need to look more true for your CEO. This was true for Conor, at things differently.” as he initially looked at category design as more of a Ask your leadership team some of the same questions marketing play. But as he read Play Bigger and had a you’ve presented to your CEO. For example, ask them chance to think through it, that changed. if they feel like the existing business strategy has them on the right path. Or if they feel like the company has The Newcomer’s Guide to Category Design 30

enough clarity on its direction, or if different teams are for too long; either make a formal decision to pursue it, Part IV: puling in different directions. See if there is a desire or decide that it’s not for you and move on. How to Talk With to play at a bigger level that isn’t being served by the To help make this process feel a bit more formal at Your Team About current way of doing business. BombBomb, I gave a presentation to our leadership If you’re crushing your goals and achieving the right team that was designed to help us make the decision Category Design kind of growth, then perhaps you don’t need to take on (either way) and move on. It wasn’t a presentation such a dramatic initiative. But if your leadership feels just on category design as a general idea; much of it (and Get Them like something is off, then it’s time to present category discussed how it related to our future at BombBomb. Excited) design as an option to explore. You don’t have to pitch If you’re building such a presentation yourself, consider it as the “right” solution yet, and in fact, you shouldn’t. breaking it down into these four sections. If you’d like to Remember, you want to help your team come up with see the one we used ourselves, please email me: an answer on their own. However, what you can do 1. Review what category design is to remind your is introduce category design as something worthy of team of what you’ve been discussing discussion. “I asked our whole executive team to read Play Bigger, 2. Show why category design is the right solution which is really the definitive work on the topic,” Darin for your specific business situation added. “And I suggested some podcasts on category 3. Outline what your future would look like if you design. Once they had a chance to digest that material, decide or decide not to pursue the strategy I started to ask questions like, “Do you think people 4. Present a specific timeline for making the final actually understand the problem that we’re solving? decision Do you think they know what we’re trying to do? How While all four of those points are important, it’s the is that hurting us? What’s the upside if we solve that?” second one that’s most critical. Category design might Darin continued, “Once our executive team was open sound great in theory, but if you can’t demonstrate how to the idea, I asked for their questions so we could think it relates to your current situation and why it’s going to through them together. I heard things like, ‘Isn’t this give you the best chances of success, this presentation just for sales and marketing?’ and ‘How are we going to won’t really matter. stay committed to this?’ And from those questions, we That’s because category design doesn’t fall into the were able to make sure that everyone on the team was category of things you can experiment with and test heard, which helped us secure buy-in.” out. It’s a commitment – one that you can’t easily You may also find it helpful to explore how other reverse course on and that will require time and companies have executed category design. Here’s where effort from everyone on your leadership team. Your you can find more than a dozen interviews with other team shouldn’t make the decision without carefully category designers. understanding why it’s necessary and what they are getting themselves into! 4. Make the call Once you’ve established that your team is open to a new Here are a few other tips on making this strategy, and given them some time to get acquainted presentation to your team: with category design, it’s time to have an intentional • Don’t rush into it. Give people on your team discussion around it. Don’t putter around with the idea time to consider category design before you have a formal discussion. When you present to your The Newcomer’s Guide to Category Design 31

leadership team, this shouldn’t be the first time • Own the challenges and risks. Your team will Part IV: they are hearing about this idea. At the same time, conclude on their own that category design How to Talk With don’t press your team for immediate feedback. Be won’t be easy. But if you gloss over that, you risk patient. Give them time to unpack what you’ve looking like you haven’t thought things through. Your Team About presented. This is a big decision for your company Instead, build credibility by being upfront about and requires a thoughtful approach. the hurdles you’ll face. In my own presentation, Category Design • Hear out questions and concerns. You’ll be I concluded with a slide that showed a picture of (and Get Them much more likely to get support if everyone on Mount St. Helens exploding. The caption read, your team feels heard. Better to get things out on “Category design is dangerous. You can use it to Excited) the table now, instead of midway into the project. destroy your enemies, but if you mishandle it, it You’ll probably hear points you hadn’t considered, can blow up in your face.” too. For example, a few people on our team were • Have fun. Just because you’re talking about worried this would be a “flash in the pan” that something serious doesn’t mean you can’t enjoy didn’t stick, which I hadn’t considered. With that some laughs along the way. Especially if your team knowledge, I can work on ways to ingrain this way gets into a heated debate, a bit of levity can go a of thinking into our work. long way. • Provide a timeframe for deciding. Once you’ve 5. Create a task force made the pitch, agree on a specific date for regrouping and making a final decision. Don’t Your next job is to create a team of people who can push this too far out, or you’ll lose momentum. dedicate themselves to helping your company move We decided at our quarterly offsite, just a couple forward on category design. You might assume that the of weeks afterward. category design discussion can simply be a part of your • Be clear on the timeline and next steps. If your regular leadership meetings, but I don’t recommend it. team doesn’t know what will happen next, it’s hard Here are three reasons why. for them to feel confident in moving forward. You A task force can devote more attention to category don’t have to have every last detail mapped out, but design. A special-purpose task force gives the category providing a high-level overview will go a long way. design process more weight. If it’s merely an agenda If you’d like a walkthrough of the category design item among other discussions, then it’s not as likely to blueprint we created for our team at BombBomb, get the attention it needs during your regular leadership send me a message and I’ll be happy to walk you meetings. through it. A task force is more efficient. Your leadership team • Don’t present until you’re sure of the outcome. might be too large to have productive discussions Just a good lawyer doesn’t take on a case unless around category design. I recommend a group of she’s confident she can win, you don’t want to have around 5-7 people (make sure your CEO is one of them). this discussion unless you’re fairly sure your team You’ll want representation for each department, but a will be on board. Ideally, they already will be, from group small enough to move quickly. the individual discussions you’ve had well ahead A task force ensures you have the right people. There of time. might be people you want to bring into the category The Newcomer’s Guide to Category Design 32

design discussion who aren’t on the leadership team. a video to the entire company every Friday about what Part IV: Creating a task force gives you the flexibility to add the we’re working on,” said Darin. “Category design became How to Talk With right people to the mix. one of the pieces I started to communicate in those At BombBomb, we created a group of seven leaders updates. I try to be very upfront about the fact that Your Team About who work on product, sales, creative, marketing, and this is going to affect their job (in a good way) and it’s Category Design operations. Both our CEO and President are part of this something they need to pay attention to. group, and we have just one marketer (me). Remember, HubSpot is another great example of a company that (and Get Them you can (and should) bring up major updates and cares about “internal evangelism.” “If you’re going to Excited) decisions with your leadership team. But save the heavy create a category that’s going to last years and years, lifting and for your task force. you need a catalyzing event that allows everybody in your company to understand what the story is,” Kipp 6. Bring your team on the journey Bodnar, the current CMO and an early employee, told The decision to pursue category design should happen at me in this interview. the executive level, but once that’s done, you must involve “You need to have this source of truth that people can your team in the category design process. It’s a necessity. look to. For HubSpot, that was Brian and Dharmesh Consider all the activities I outlined above: executing publishing the Inbound Marketing book. Then it was I knew that category lightning strikes, creating content, reworking your the creation of partnerships with some other folks for design would be a whole messaging, and so on. Category design is too big for the Inbound event which we still host every fall here “ just a few people to pull off. Bring your team on board in Boston. Then, I think it’s the job of everybody in the company initiative – early on if you want to have their support later. company to say, ‘Hey, this is our mission.’” something that would “I knew that category design would be a whole company Keep in mind that you’ll probably get mixed feedback fundamentally change initiative – something that would fundamentally change from your team at first. “Some people have been excited. how everyone thought how everyone thought about the business,” Darin Some people have pushed back. Some have said that explained. “I also knew that if we were going to pull we’ve always been doing this already,” said Conor. “That about the business. this off, we had to get commitment across the board. just reiterates the importance of the CEO continuing to ” Your team might follow you initially, but if they’re not push the momentum. I have to remind our team that — Darin Dawson bought-in, they can be a drag on the whole program and this is what we are doing, we are saying yes to certain you won’t see the success you’re looking for.” things and no to other things, and I have to continually bring our team back into alignment. That’s just part of Getting your team on board is also your obligation as being a leader.” a leader. Category design represents a major company If you do encounter people on your team who are strategy, and any good leader will help show their team having a hard time getting behind category design, a vision for the future and a plan for getting there. If you’ll want to address that situation right away. Not presented in the right way, category design can help instill only will it be harder for your team to execute category confidence and excitement for where you are headed. design if someone isn’t on board, but it may also be At BombBomb, we started this process through the a sign that there’s a more fundamental issue that the “Friday Update” videos that Darin sends to the entire employee needs help with. company each week. “Once I have my teams bought in at “If someone remains skeptical or is just having a hard the leadership level, I expect them to carry that message time getting behind this, I would be more inquisitive to their teams and help them understand it. I also send The Newcomer’s Guide to Category Design 33

and curious about how things are going for them,” said engage and share what they are learning and thinking Part IV: Darin. “There has to be something beneath the surface, about. Creating this feedback loop is so important How to Talk With and you want to make sure you address the root issue.” because it helps everyone feel part of the journey. Your Team About 7. Create a feedback loop In addition, creating channels for your team to provide feedback helps you see which departments are already Category Design You’ll also want to consider how you can make on board and which may require some more attention. category design a process that your team feels a sense “I spend a lot of time thinking about areas of the (and Get Them of ownership of. It’s not about your task force simply business where I need to get more buy-in,” said Darin. Excited) handing down the direction from on high. For example, “If I can see that one department isn’t reading the book, think about the process you might use to develop your asking questions, or showing engagement, then I might category story. need to help them along. “It’s important not to just share your Point of View, but Figuring out when to keep things to your task force and inspire people to think of it as their Point of View too,” when to share with the company will take some time. says Anna Schena. “For us, we had several people tell ‘our But I’d recommend erring on the side of sharing too story’ in their own words, and why it meant so much to much. This is a big journey you’re going on together, If you’re going to create them, and it accelerated buy-in exponentially faster than and having your team feel like they are part of it can go a category that’s going if we had just myself or leadership evangelize it.” a long way to make this strategy a successful one. “ Furthermore, fostering a culture of category-design Consider how Sarah Elkins looks at this. “The internal to last years and years, throughout your company will help you improve your launch needed to also include a more detailed roll- you need a catalyzing thinking. If your team understands the process and out plan both internally and externally,” she told event that allows where you are trying to head, they’ll be more likely me. “We created separate plans for GTM teams and to come up with questions that need to be addressed internal teams (engineering, finance, etc.). The GTM everybody in your and ideas you hadn’t considered. If you constrain the teams needed much more details on personas we were company to understand category design process to a select few, you’ll only limit targeting, messaging, etc. Just communicating the POV yourself. That’s why our CEO has continued to stay would have left too many questions unanswered about what the story is. involved, even as we’ve stepped into the trenches of how to use it in real life.” ” building our category. Conor told me, “Staying involved Once your team is up to speed on where you are headed, — Kipp Bodnar in the execution of this has been awesome because you’ve already done a lot of work, but you’re just at the it puts me right in the midst of what our frontline beginning. Now the real work begins. “As leaders, once people are hearing and thinking about. For instance, we launch something, we have to keep reinforcing it, we recently went through a category design discussion keep telling our team why,” Darin told me. “If you don’t, with our customer success team, and I was able to hear you can lose commitment. People will have questions their feedback directly. That gave me a new perspective along the way, and you need to stay responsive to that on things.” and really try to lead by example. At BombBomb, once we shared our initial category If you’re interested in following our journey at design plans with the team, we also challenged them BombBomb, you can follow me on LinkedIn or to be a part of the process. Not only did we offer to buy subscribe to my category design newsletter. everyone a copy of Play Bigger, we also asked them to The Newcomer’s Guide to Category Design 34

Consider these two approaches if challenges our customers face in using video better Part IV: your team needs help imagining what than anyone else. That’s why the onus is on us to drive How to Talk With category design looks like the market forward and give ourselves the best chance of becoming the long-term category king. Your Team About If your team needs help understanding how and why Anna and the team at Narrative Science chose category Category Design category design might apply to your specific situation, design for similar reasons. “For us, the choice to create consider these two approaches. I learned these from a category was around technology innovation within (and Get Them Daniel Palay, a B2B marketing consultant who has the larger data and analytics space,” she explained. “We designed categories in both marketing automation built products that have new technology that no one Excited) technology and supply chain and logistics software. has seen before, and it didn’t fit into any neat ‘boxes’ of analytics software that people buy today. So we decided THE STRATEGIC IMPERATIVE to define our own category.” According to Daniel, “The strategic imperative is an approach for when you have something different. So THE TACTICAL WEAPON different, in fact, that it’s hurting you in the marketplace The tactical weapon approach allows you to build a new The strategic imperative because of how difficult it is to make direct comparisons category position by creating contrast with an existing against competitors.” In other words, if the only way one. “Sometimes it’s easier to firebomb an existing “is an approach for when in which your company is going to stand a chance at category than dominate it,” said Daniel. “If there is you have something winning deals is to break free of existing categories, some common element shared by all of the main players then not pursuing category design is going to cause a in an existing category, find a way to position that as a different. So different, lot of pain. weakness rendering the entire category obsolete. The in fact, that it’s hurting This is exactly why we chose category design at category design process becomes about determining you in the marketplace BombBomb. As you may or may not know, we help its replacement.” business people build and foster relationships through Drift is one example of this approach done well. because of how difficult the use of personal, one-to-one video. Instead of having Early on, Drift was just another player in the live chat it is to make direct to rely on typed-out text or scheduling a Zoom call, category – a market that soon became crowded and we allow you to get “face-to-face” by sending video commoditized. Drift needed to stand out from these comparisons against messages in virtually any channel. competitors, but it couldn’t just do that by trying to competitors. While this is a growing category (our customers now convince the market it had a “better” product than ” send about 100,000 videos every day), it doesn’t have everyone else. — Daniel Palay a name yet. Historically, we and our competitors have Instead, Drift chose to develop a new category by been placed in the “video hosting” and “other video creating a contrast with website forms and marketing software” categories on G2 – neither of which are a good automation software. By claiming that requiring fit. Unlike most companies, trying to carve out a niche customers to fill out forms (and having to wait for in an existing category would only create confusion and a reply) was an outdated way of interacting with serve to penalize us. customers, Drift drove awareness and demand for the In other words, we have a strategic imperative to new category it was creating, called conversational design this category. We are already in the best position marketing. This new category is all about immediate to emerge as its leader. Our team has sent over half interactions with customers, mainly through the use a million one-to-one videos, and we understand the of intelligent chatbots. The Newcomer’s Guide to Category Design 35

Whether you align more with the strategic imperative or Category design helps your customer success team Part IV: the tactical weapon approach, category design shouldn’t provide customers with a clear idea of the problem How to Talk With be a decision you make capriciously. It needs to pursued they will help them solve. And when the right because there is a specific business outcome that you expectations are set, churn is likely to be lower. Your Team About could not achieve by competing in an existing category. • Partnerships. Businesses can only afford to Category Design Remember: category design helps invest in so many relationships. If you can use (and Get Them every team win the process of category design to demonstrate that you’re poised to become the leader of a new Excited) It goes without saying that category design helps your market, you’re more likely to attract high-value marketing and sales teams win. But the reason it’s partnerships. Those partnerships can be used called a business strategy is that it helps nearly every to add to your momentum, helping make your department succeed. leadership potential a reality. Here are a few examples: • Product. Remember, category design provides • Finance. A big part of finance’s role is to attract a lens for where your company needs to head investors. But attracting the right investors and the problem it wants to solve. That lens can can be pretty tough if you don’t have a great be extremely informative to product decisions. story to tell. Yes, past financials are a part of Asking yourself “does this decision move us closer that story, but in a growing startup, what to building and dominating our category” can investors are really looking for is future growth. provide tremendous clarity. A company poised to create and lead a new Furthermore, “Category design can also provide category will usually look more attractive than product managers, designers, and engineers with a one competing for a slice of an existing one. boost of excitement and creativity,” says Anna Schena, “Talented people love the chance to live up to a According to Bruce Scheer, a longtime B2B challenge and be recognized for their efforts. Category sales and marketing consultant and the CEO design delivers the opportunity for both.” of InspireYourBuyers.com, “Category design • Employee retention and recruiting. This one communicates to investors that you have a unique shouldn’t be a surprise. People want to stick with market insight – that you see the blindspots in teams that are doing new and exciting things. the problem being solved and have a solid plan to Category design shows them that you have big address it.” plans and aren’t just conducting business as usual. • Customer success. What’s the bane of customer Likewise, having such a strong vision can help you success’s existence? Churn. And a big driver of churn attract better talent to your company. is when customers sign up for the wrong reasons. • Leadership. Category design provides a “north star” Perhaps they were confused about what the on where your company needs to get. It can (and software was intended to do. Or about who it was should) provide guidance on strategic decisions. for. Or why it will help them succeed in the future. Having such clarity can only help your leadership team to be more effective. The Newcomer’s Guide to Category Design 36

This is a guide, not a rulebook outside of the business world. And most of all don’t be Part IV: afraid to experiment – nothing legendary was done by There are only a handful of B2B SaaS companies that merely repeating the actions of others. How to Talk With have legitimately created new categories. And none Your Team About of them, at least to my knowledge, followed the exact Earlier I mentioned how having an “official” category steps of another company. They had to chart their own name on-site like G2 isn’t a requirement for category Category Design course. And they had to make up a lot of things as they design. But that doesn’t mean you should overlook a went along. resource like this. In fact, one the reasons I asked G2 (and Get Them about working on this series together is that they play Excited) So I’d like to conclude this section by saying that you such an important role in helping buyers understand should use this reference as a guide, but don’t follow it the differences between related products. To help you blindly. Every situation is different, and what worked make the most of their platform, take a look at Part V: for one company might be a disaster for your own. Look How To Get Your Category Listed on G2. for inspiration both within B2B SaaS and in places even Recap: Category design will fail if you don’t first get your CEO and executive team on board. You’ll be more successful with that if you begin by asking questions and inviting discussion. Once you’ve made the decision to pursue category design, you need to share those plans with your entire team. Create a feedback loop to make sure you’re hearing from employees and involving them in the process. Finally, category design helps more than just sales and marketing; it can help every department in your company by providing clarity on the company’s goals and the path to get there. The Newcomer’s Guide to Category Design 37

Part V: What Every Category Designer Needs to Know About G2

If you’re in B2B SaaS, you probably already know the what they’re looking for because products are over- important role that G2 plays in the software buying categorized, then a review site like G2 won’t be very process. After all, millions of buyers visit G2.com every helpful. According to Kara, “We take this aspect of our month, where they’ll find over one million software methodology very seriously to ensure that buyers are Part V: reviews. So you might be asking yourself, “As a category able to make true comparisons between products.” designer, what’s the best way to take advantage of this To find out which products represent unique feature platform?” To understand this better, I spoke with Kara sets, G2 starts by listening to its team of industry What Every Kennedy, G2’s Director of Product Research, and I used analysts, who are regularly speaking with vendors Category what I learned from her to write this section. and buyers, attending industry events, and generally I’m focusing on G2 specifically because it isn’t a “pay to keeping a finger on the pulse in their given market. play” platform where only deep-pocketed companies As they see categories emerge or evolve, they make Designer can get coverage. Their philosophy is to help buyers recommendations to adapt their category taxonomy. select the right software using reviews from their peers, But as I mentioned earlier, G2 is not driven solely Needs to Know not from paid analysts. I also prefer G2 because they by analyst coverage. They rely on feedback from are quicker to reflect what’s actually happening in the their community, too. Both vendors and buyers About G2 market, compared to other software review sites. have channels to make recommendations for new In a moment, we’ll talk about how to get your own categories, and that feedback is listened to closely by category added to G2. But before we do that, we need G2’s researchers and leadership. WHAT YOU’LL LEARN: to first look at G2’s process for adding new categories. Find out how G2 evaluates B2B software The process for requesting a new categories and what it looks for when a How G2 adds new categories category addition company makes a request for a new category The first thing you need to know about G2’s Let’s explore how to request new categories on G2 while addition. If you don’t yet meet those criteria, categorization process is that it’s defined by feature we’re at it. I’ll show you some steps you can take to get sets. A new category must represent a distinct feature to that point. set that is unique from other categories listed on the Build something category worthy site. In other words, if you’re approaching category The process for having a new category created on G2 design only as a branding and messaging play (which starts with the software you are actually building. We take this aspect of you shouldn’t), there’s very little chance G2 will create Remember, G2 will only create a new category if a new category for you. a product has a unique set of features that aren’t “our methodology very Even if there are multiple names that buyers use to represented in existing categories. That’s just another seriously to ensure refer to a category, G2 will present just one of them way of saying that new categories need to represent new that buyers are able to on its site. Alternative category names or references solutions, not “better” versions of existing products. will simply be listed within the category definition – if With that out of the way, let’s talk about another make true comparisons they’re listed at all. criterion you need to meet: having enough competitors. between products. Because products are categorized based on their Encourage competitors ” features, G2 does not allow vendors to pick and choose Yes, you read that right. Even if you offer something — Kara Kennedy the categories they are listed in. This might sound unique and have all the language in place to define this like a penalty, but it’s actually in the best interest of new category, G2 still won’t be ready to create a new both buyers and sellers. After all, if a buyer can’t find category. You also need to have competitors who offer The Newcomer’s Guide to Category Design 39

something similar. In fact, G2 looks for categories that Apply Part V: have at least ten companies in the space. That means Once you meet the criteria of having a unique feature What Every that early on, your main job is to grow the category itself set and enough competitors, the process of requesting (competitors and all) before you focus on promoting a new category is pretty simple. Whether you’re a G2 Category Designer your particular brand. customer or not, you can just visit the vendor portal Needs to Know Sangram Vajre of Terminus put this better than I at my.G2.com to submit a request, or contact the team could: “There is a new type of leadership that I call at [email protected]. There’s no guarantee they will About G2 “belongship.” It’s about building a community first. honor the request, as about 40% of submissions are Get laser-focused on problem market fit and instead either rejected (or backlogged, in the case of emerging of a customer event, do an industry event that brings markets). But new categories are added when they competitors together. Why? It will bring analysts, make sense. For a few recent examples, check out the the media, influencers, and collective set of future Robotic Process Automation, Video Email, and Digital Get laser-focused on customers together all at the same place. If you do Adoption Platforms categories. this right, with a clear focus on giving in an authentic “problem market fit and and kind way, you have a chance to not only create a Promote instead of a customer category but rather become a category leader.” Here’s Once your new category is listed, your work isn’t done. event, do an industry event my interview with Sangram about category design. In fact, it’s just beginning. Now, you need to double List on G2 even if your category isn’t ready down on your commitment to evangelizing the that brings competitors category and emerging as its leader. To start, consider together. Why? It will Better to have some presence on G2 rather than no running a PR campaign announcing your new category. presence at all. Generating reviews for your product You can also reach out to G2’s research team on creating bring analysts, the media, will only help drive awareness and legitimacy for what an announcement video. influencers, and collective you’re building – which are building blocks for growing Also keep in mind that G2 tends to rank highly for the category itself. If you know a new category needs “[category name] software” search terms. Once your set of future customers to be built, but there aren’t enough competitors yet, new category is listed, promoting this category name together all at the same then G2 may list you in a “Other” category that serves out in the market can only help you. The more buyers place. If you do this right, as a catch-all for products that don’t fit into primary who search for this term, the more buyers who will find categories. your listing on G2 itself. Finally, don’t forget to invest with a clear focus on giving For example, at BombBomb, we’re listed in the “other in driving more reviews for your listing. Once that G2 in an authentic and kind video software” category. It’s not where we want to Grid is built, you’ll want to see your brand in that top way, you have a chance to be long term, but it allowed us to generate nearly 300 right quadrant! reviews on G2 and to be included in the Global 100 not only create a category Best Software Companies list! In the meantime, we are Think beyond the category name but rather become a working on developing the right name for our “real” Remember, while category names in G2 are important, category and we’re sharing that discussion with G2’s they aren’t the entire picture. Salesforce built the cloud- category leader. research team. based software category long before G2, and at this ” point, that’s too broad a category to be listed there. — Sangram Vajre The term “inbound marketing software” is yet to The Newcomer’s Guide to Category Design 40

be listed on G2, despite the fact that HubSpot built Ultimately, category design is a business strategy, not Part V: a distinct category from “inbound marketing”. And a plan for getting listed on a review or analyst site. What Every despite Gong’s high-profile effort to move past the Remember that, and you’ll do just fine. “conversational intelligence” category and into a new Category Designer one (which it’s calling “revenue intelligence”), they are Needs to Know still listed firmly in the latter. Even Ryan Bonnici, G2’s CMO, reminded me in this About G2 interview that, “as B2B marketers, we often get too caught up in features and functionality, and we don’t focus enough on the problem [that we are] solving for.” Recap: If you want G2 to create a new category on its site, your product needs to have a unique set of features that aren’t captured by existing categories. On top of that, there should be at least ten companies that can also fit into this new category. If you don’t meet these criteria, begin by building something category worthy and by fostering a community of other businesses that can help bring the category to life. The Newcomer’s Guide to Category Design 41

Category design is a strategic way of thinking about Hortatsos, James Carbary, Jeff Benanto, Kevin Maney, Conclusion & building your business. It requires you to think for Kipp Bodnar, Lindsay Tjepkema, Mike Damphousse, yourself. While I hope you found value from the Mike Volpe, Ryan Bonnici, Kara Kennedy, Sangram Acknowledgements examples and processes I’ve shared in this series, Vajre, Sarah Elkins, Stu Heinecke, Udi Ledergor, and I also recommend that you don’t follow them too Wayne Arthur. closely. Successful category designers chart their own Thanks to Conor McCluskey, Darin Dawson, Steve path. My expectation isn’t that you follow this guide Pacinelli, and Ethan Beute at BombBomb for not only to the letter, but that you use it as a source of ideas being champions of category design but for being and inspiration for your own journey. Good luck! some of the most thoughtful and passionate people For more resources on category design, subscribe I’ve worked with. to my category design newsletter, Flag & Frontier. Additional thanks to Gianni Quintana, Giuseppe You can also send me an email at john.rougeux@ Marzio, Haem Roy, Ishita Priyadarshini, JK Sparks, bombbomb.com, or follow me on LinkedIn. Marc Fuentes, Mitch Soloway, Rob Abhey, and Steve I wish I had room to include everyone I’ve shared Watt for providing crucial feedback on a (very) rough ideas with about category design. Everyday I come draft of this. across someone who’s thinking about the discipline Thanks to David Jones for the kick-ass ebook design. and is able to show me something new. Thanks to the following business leaders whose Special thanks to Christopher Lochhead for providing knowledge and experience provided much of the countless hours of advice and coaching on category source material for this series: Andy Cunningham, design, encouraging me to pursue this discipline long Andy Raskin, Anna Schena, Bill Macaitis, Bruce before anyone else, and for introducing me to his Scheer, Cassidy Shield, Chris Orlob, Daniel Palay, beloved chickens. Dave Gerhardt, David Cancel, Derrick Thomas, Gina The Newcomer’s Guide to Category Design 42

1 10 The 22 Immutable Laws of Marketing, by Al Ries and ABM is B2B: Why B2B Marketing and Sales is Jack Trout. HarperCollins, 1993. Broken and How to Fix It, by Sangram Vajre and Eric References 2Play Bigger: How Pirates, Dreamers, and Innovators Spett. Ideapress Publishing, September 3, 2019. 11 Create and Dominate Markets, by Al Ramadan, Dave Get to Aha!: Discover Your Positioning DNA and Peterson, Christopher Lochhead, Kevin Maney. Dominate Your Competition, by Andy Cunningham. Harper Business, 2016. McGraw-Hill Education, 2017. 3 12 Why it Pays to Be a Category Creator, by Eddie Rehumanize Your Business: How Personal Videos Yoon and Linda Deeken. Harvard Business Review, Accelerate Sales and Improve Customer Experience, 2013. https://hbr.org/2013/03/why-it-pays-to-be-a- by Ethan Beute and Stephen Pacinelli. Wiley, 2019. category-creator 13 Conversational Marketing: How the World’s Fastest 4 Science Daily, “Thinking inside the box: Growing Companies Use Chatbots to Generate Leads How our brain puts the world in order”, July 24/7/365 (and How You Can Too), by David Cancel 20, 2016. https://www.sciencedaily.com/ and Dave Gerhardt. Wiley, 2019. releases/2016/07/160720094600.htm 14 Inbound Marketing: Get Found Using Google, Social 5 Media, and Blogs Positioning: The Battle for Your Mind, by Al Ries and , by Brian Halligan and Dharmesh Jack Trout. Warner Books, 1981. Shah. Wiley, 2009. 6 15 Crossing the Chasm: Marketing and Selling High- Sales Engagement: How the World’s Fastest Tech Products to Mainstream Customers, by Geoffrey Growing Companies are Modernizing Sales Through Moore. Harper Business Essentials, 1991. Humanization at Scale, by Manny Medina, Max 7 Altschuler, and Mark Kosoglow. The Innovator’s Dilemma, by Clayton Christensen. Harvard Business Review Press, 1997. Wiley, 2019. 8 16 Superconsumers: A Simple, Speedy, and Sustainable Content-Based Networking: How to Instantly Path to Superior Growth, by Eddie Yoon, Harvard Connect with Anyone You Want to Know, by James Business Review Press, 2016. Carbary. Lioncrest Publishing, 2020. 9Category Creation: How to Build a Brand that Customers, Employees, and Investors Will Love, by Anthony Kennada. Wiley, 2019. The Newcomer’s Guide to Category Design 43

About the Author John Rougeux is VP Marketing Strategy at BombBomb, where he’s leading the company’s efforts to build the Human-Centered Communication software category. He’s the owner of Flag & Frontier, a marketing consultancy and resource hub dedicated to helping executives pursue category design. John also hosts the #categorycreation series on the B2B Growth Show. Get in touch with John by following him on LinkedIn or send him a message at [email protected]. For more resources on category design, visit flagandfrontier.com 44