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