Why You Need to Choose or Design Your Category (incl. Case Study)
Inspired by the book Play Bigger by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney, here’s an overview of the idea of Category Design, the benefits of Creating your Category, the Steps to Category Creation and an example of how we applied this at Helio, the division of CircleUp which was acquired in February of 2023.
What is Category Design?
Here’s the premise: Before Uber, users would have told you they wanted to call a cab… Before Airbnb, users would have told you they wanted to book a hotel room… Before Dropbox, users would have told you they wanted to send Zipped files…
But then these brands created their own categories. “Ride sharing,” and “Travel community,” and “Cloud storage.”
Better put: “Category design is the discipline of creating and developing a new market category, and conditioning the market so it will demand your solution and crown your company as its king.”
What do you gain by creating a new category?
The team at Play Bigger (the inventors of category design) analyzed the Fortune 100 fast-growing companies list from 2009 to 2018. Using the Category Design Scorecard, they found only 19% of the fast-growing companies were actually category creators. But stunningly, the category creators captured the vast majority of the growth: 51% of the prior three years’ cumulative revenue growth and 80% of the prior three years’ market capitalization.
Steps to Category Design
Establish a point of view of your category. Frame a powerful problem, articulate a compelling vision, and most importantly, communicate the core compromises, trade-offs, and problems inherent to the way the category is today, such that the consumer will be open to a new and different approach.
Re-imagine the category without compromise. Cast a compelling future – free of these fundamental problems compromises and tradeoffs inherent to the category. Articulate how the category looks in its true glory where the consumer is transformed, partners are proud participants and the company generates an abundance of benefits – rational, emotional, and aspirational as well as financial.
Develop a radically different offer and business model. How does this new category get delivered to the customer, both through a breakthrough product/service/offer, but also through a breakthrough business model? How does this product innovation + business model innovation come together in a way that 1 + 1 = 11?
Widen the moat widens with a data flywheel. How does the company generate data about customer demand/preferences that creates a unique opportunity and advantage to anticipate the future of the consumer demand and any category shifts?
Deliver epic customer outcomes. Depth & degree of customer outcomes: Does the company generate satisfied and ecstatic customers? Are they so happy they evangelize product + service and renew?
How to Create Your Category
Identify the problem. Articulating the problem and your unique technology or market insights is the first step of your category design journey.
Develop a category blueprint (pt 1 – old world, pt 2 - new world). Sharing your category vision requires a visual blueprint and ecosystem that maps out the people, processes, and products required to fulfill the category's potential. Your blueprint represents what solution you have today and what you will build in the future to solve the category problem.
Name the category. Defining the name of the category is a big step to helping the world understand the container for the problem. The category name is often comprised of the market type, the nature of the problem, and the audience who has the problem. It’s a name that will evolve over time as your category expands.
Create your point of view. Sharing your category vision with a powerful point of view (POV) is the next step. Your POV frames the category problem, explains the ramifications of not solving the problem, presents your vision for the future, and declares your unique answer to the problem.
Mobilize the entire company. One of the most powerful steps in category design is mobilizing the entire company, and in some cases the entire industry, to solve the category problem. Mobilization is the step that unifies every single person in your company around your company, product, and category goals.
Execute lightning strikes. Lightning Strikes condition the world to see what you see. Lightning strikes target the cognitive biases of the entire category ecosystem helping you to anchor your agenda, create group-think, drive conformity and commitment to picking your company as the category king. The Lightning Strike playbook aligns every function of your business to work together as a signal unit in a concentrated period of time.
Spin the flywheel. Your category journey is ongoing and your category flywheel will gain momentum with every lightning strike. This flywheel allows you to expand your category potential, expand the scope of problems you solve, and creates long term unfair competitive advantage.
Category Design Case Study — Helio, Universal Data for the CPG Industry
When I took over as VP of Marketing and Sales at Helio (I started as Head of Sales and Partnerships), a division of CircleUp, one of our biggest challenges was helping the market understand how our data and technology differed from other data and software providers in the Consumer Goods Sector.
We didn’t quite compete with SPINS, Nielsen or IRI, the leading point-of-sale data providers, but Helio did include point of sale data in the platform. We didn’t compete with Numerator, the leading consumer panel data provider, but our platform did include consumer review data. We didn’t compete with Pipe Candy, but the platform did include e-commerce data. We didn’t quite compete with Jungle Scout, but the platform did include Amazon data… You get the picture.
At the end of the day, each of these platforms create different kinds of value for members of the CPG ecosystem. Our problem was that if we were compared to any one of them, we’d likely lose the business opportunity because our platform wasn’t focused on being the “number one platform for Amazon e-commerce data” our focus was being the most complete resource for emerging consumer brands, products and trends in the United States in order to help Investors find brands to invest in and Innovators to find brands to glean inspiration from… given the problem we were solving for our customers, it was critical that we develop a shared vernacular through which they could evaluate our platform… AND that required that we invent a new category of data product that the CPG industry had never heard of before.
So we went about using the framework set forth by the Category Pirates in order to develop our Category with a Market-Validated Point of View. ***Note: it took us about 6 months selling Helio in the market in order for us to glean the insight that we needed to develop our own category in order to stop competing on problems we couldn’t solve and feature sets we’d never build.
Here’s what we did:
Step #1: Establish a point of view of your category.
Here’s where we went with our POV: The consumer goods industry has fundamentally changed. The way people consume is vastly different than how it was just three years ago and the way new products are brought to market are fundamentally different as well.
No data provider in the world is capturing this data all under one roof (POS, Consumer Review, D2C, Amazon, Social), therefore literally everyone in the consumer packaged goods industry is either spending too much or flying blind.
Existing tools miss the mark in three distinct ways:
They are Too Narrow - you can buy a tool for offline, online, social, web, etc. but no tool brings all of these together under one roof.
They are Too Slow – Antiquated approach to data aggregation – these tools depend on antiquated approaches to attribution that leave emerging attributes or key trends out o the picture until they’re already established norms.
They are Too Hard to use – antiquated technology makes them miserable to actually use.
Which means the time to act for our clients to use these key data points to invest and innovate ahead of the pack is now, but acting requires the rise of a new category of data software…
Step #2: Re-imagine the category without compromise.
In a world where no compromises are made for our customers, this new category of data software for the CPG industry would have to include:
Broader data sources: Data should be captured from all channels relevant to consumer goods industry today – web, social, online, offline, retail, food service, e-tail (e.g. Instacart, Woo Commerce, Drizly), media, Amazon, and anywhere else brands show up online or offline today.
Earlier reporting of daataa: Data should be refreshed daily because new brands are born daily, die daily and become disruptive daily.
Smarter tooling and methodologies for data capture, processing and reporting: Antiquated methodologies for data aggregation, entity resolution, trend prediction, and market performance are irrelevant; new tools should take a machine approach to executing this vision and create a data flywheel whereby models become smarter as more data is added to the platform and more users interact with the platform so all users benefit.
Step #3: Develop a radically different offer + biz model.
Table stakes for this new category will include a business model that supports customers being able to access data in a new way that doesn’t hamstring them to antiquated biz models or licensing approaches:
All channels. Businesses are not single channel, why would any relevant data provider limit your visibility by channel?
All categories. Consumers don’t consume in a single category - trends from adjacent categories are crossing over faster than ever, why would any data provider keep you blind to emerging trends that will impact you tomorrow?
All the time. Consumers consume daily, why would any relevant data provider limit your visibility to emergent trends based on when they deem it relevant to publish new data, often times weeks, months or quarters after consumption actually took place?
Step #4: The moat widens due to data flywheel.
Solutions should have business models that provide distinct competitive advantages whereby the usefulness of the tool increases over time and widens the advantage-moat between those using and not using, which is why we must capture:
Brand data directly from the source (e.g. ground truth financials from the brands — e.g. Credit & Venture business units could provide)
Consumer data directly from the source (e.g. ground truth transactional data from consumers – e.g. Delphia could provide)
User-generated data from the platforms (e.g. Helio interactions by Retailers, CPGs, etc. could be sources)
Step #5: Deliver epic customer outcomes.
As a result of access to this new category of software, customers of the product will realize incredible outcomes–
Invent and create better products for consumers;
Respond to existential threats to their businesses ahead of time;
Find and invest in epic trends and brands (4-10x or greater returns) regardless of founder pedigree; therefore creating a healthier, more vibrant, and more attractive ecosystem, growing the pie for all!
After we’d completed Steps 1-5 above, we continued with the exercise of Designing and Naming the Category:
Identify the problem.
“You are being disrupted. There is an army of little brands eating your lunch. They are popping up in unexpected places. And you’re learning too late about this. But it’s not your fault–existing solutions are too narrow, too slow, and too hard to use. But regardless of having the right tools or not, your future is staked on the investments you make today. You need tools that can help you see the bigger picture, faster, so you can make the right decisions now.”
*** Note: we used hours of recorded calls to really get the voice of customer (VOC) to establish this pain concisely on our customers’ behalf.Develop the category blueprint.
For us, this was simply a drawing of the CPG ecosystem before (in the 80s and 90s when the majority of leading data products were being built) and now (in the 2020s where post-pandemic the landscape for how consumers interact with CPG brands was forever changed.Name the category.
This was a leadership and GTM-team wide problem to solve, we started by making a list of about 30 potential category names, ultimately we narrowed it down to one that felt representative and inclusive of the problem we solved and the differentiation of this data category versus other data categories in our industry (POS, Consumer Panel, Social Media Monitoring, etc.)
"Universal Data for the CPG Industry”Create your point of view.
This is roughly what we arrived on as a result of the category being Universal Intelligence and Helio fitting perfectly into that category.
5. Mobilize the entire company
Along with the executive team, key leaders throughout the product and GTM organization and others, we discussed Category Design at our company all hands, went over our process and findings and shared what we landed on. Once this was done, we began including in our marketing materials, sales pitches, on our customer support website and more!
6. Execute Lightning Strikes
We further mobilized the company and the market by publishing our Universal Data perspective including State of the Industry reports in industry trade publications (e.g. New Hope), via Podcasts (e.g. CPG Guys) and at industry trade shows (e.g. Expo East, Expo West). Tradeshow strategy included guerilla marketing strategies, having the team dressed all in the same purple jumpsuits so we appeared as an army of Universal Intelligence people, and more. Here’s an example of one of the marketing assets that was built and shared with the industry as a result of this work:
What do you think? Do you see the value in Category Design for your business? Could you see this being helpful?
