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