Play Bigger

1. Category Kings Dominate Markets and Capture Most Value

Category kings are the explosive and enduring companies that create great value over time—Amazon.com, Salesforce.com, Facebook, Google.

Winner-take-all dynamics: In today's networked economy, companies that define and dominate new categories of products or services capture the vast majority of the market value. These "category kings" typically earn 76% of the market capitalization in their categories.

Creating new markets: Category kings don't just build better products; they create entirely new markets by solving problems people didn't know they had or couldn't previously solve. Examples include:

• Uber: On-demand transportation
• Airbnb: Peer-to-peer lodging
• Salesforce: Cloud-based customer relationship management

Network effects and data advantages: Category kings benefit from powerful network effects and data advantages that make it increasingly difficult for competitors to catch up over time.

2. Category Design is the New Strategy for Business Success

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.

Three key elements: Successful category design involves simultaneously developing:

1. A great product
2. A great company
3. A great category

Conditioning the market: Category designers don't just build products; they actively shape how the market perceives problems and solutions. This involves educating customers, partners, and influencers about the new category.

Different, not just better: The goal is to create something fundamentally different, not just incrementally better than existing solutions. This requires identifying and articulating a unique point of view on how to solve important problems.

3. Developing a Powerful Point of View (POV) is Crucial

A POV has to shift people's minds so they reject an old way of thinking and come to believe in something new. It has to reach people on an emotional level.

Articulating the problem: A strong POV clearly defines the problem a company is solving, often one that customers didn't previously recognize or thought was unsolvable.

Emotional resonance: Effective POVs engage people emotionally, making them feel the urgency of the problem and the excitement of the solution.

Guiding strategy: The POV becomes a north star for the entire organization, informing product development, marketing, sales, and company culture.

Key elements of a powerful POV:

• Simplicity and clarity
• Provocative or contrarian stance
• Emotional appeal
• Vision of a transformed future

4. Lightning Strikes and Mobilization Drive Category Creation

A lightning strike is an all-consuming event, concentrating a company's resources to break through the noise and start to condition the market.

Focused impact: Lightning strikes are carefully orchestrated events or campaigns designed to dramatically increase awareness and demand for a new category.

Mobilizing the organization: The impending lightning strike acts as a forcing function, aligning the entire company around category creation efforts.

Components of effective lightning strikes:

• Clear target audience
• Compelling content and messaging
• Coordinated across multiple channels
• Timed for maximum impact

Ongoing momentum: Category kings follow up initial strikes with a series of "hijacks" and smaller strikes to maintain momentum and reinforce their category leadership.

5. Continuous Category Expansion Fuels Long-Term Growth

There comes a time when every CEO of a category king realizes that her current position is the biggest inhibitor to growth.

Expanding category potential: Legendary companies continually redefine and expand their categories to unlock new growth opportunities.

Flywheel effect: Successful category expansion creates a virtuous cycle, where increased scale and market leadership fuel further innovation and growth.

Examples of category expansion:

• Amazon: From online bookstore to e-commerce giant to cloud computing leader
• Google: From search engine to digital advertising powerhouse to AI and autonomous vehicle pioneer
• Facebook: From college social network to global communication platform

6. Gravity and "Kidding" Are Major Obstacles to Category Design

Gravity doesn't want you to chase a zero-billion-dollar market. Gravity pulls hard toward an existing market that's already defined and that customers already understand.

Gravity: The natural tendency for organizations to focus on incremental improvements and existing markets rather than creating new categories.

Kidding: The illusion of category creation when companies are actually just making minor adjustments to existing products or markets.

Overcoming these obstacles requires:

• Strong leadership commitment to category design
• Willingness to cannibalize existing businesses
• Dedicated resources for new category development
• Patience and persistence in the face of uncertainty

7. Category Design Principles Apply to Personal Career Growth

Position yourself or be positioned.

Personal category creation: Individuals can apply category design principles to their own careers by defining unique problem-solving niches.

Developing a personal POV: Crafting a compelling personal narrative and point of view helps differentiate oneself in competitive job markets.

Strategies for personal category design:

• Identify underserved problems or emerging trends in your field
• Develop unique skills or perspectives to address those problems
• Articulate your distinct approach through personal branding and thought leadership
• Continuously expand your "category" by taking on new challenges and learning

Last updated: November 10, 2024