What is Category Design?
Category design is the discipline of creating, naming, and developing a new market category, with your company as its leader. Instead of fighting to be the best option in an existing market, category design makes your company the only obvious option by defining the problem, the language, and the answer on your own terms.
Category strategy and category design
Category strategy is business strategy. It settles which market you intend to lead, and how you defend that position once you have it. Category design is the work that produces one and puts it into use.
The two get confused with things a level down. Marketing strategy is how you connect with customers — identity, values, taglines, tone. Positioning is how you separate your product from the alternatives a buyer is weighing. Both are ways of getting somewhere. Category strategy is the decision about where you are going, and a company that settles its taglines before it settles what business it is in ends up executing an unmade decision very well.
What category design actually means
Most companies enter a market someone else has already defined, like "CRM software", and compete on the terms that come with it: speed, price, one more feature than the last release. Every bit of market share has to be bought, and the next competitor can buy it back the same way.
Category design starts one step earlier. It asks which problem deserves a name, then names it, and makes your company the obvious answer. The pitch changes from "we're better at X" to "X is the wrong thing to measure, but here's the right one", and you stop being just one option on a shortlist. Instead, you become the benchmark the others are compared to.
The idea was popularized by the 2016 book Play Bigger, which argues that category leaders take most of the value their category creates: in the authors' study of venture-backed tech companies, about three-quarters of it.
Why does category design matter?
When you own a category, you write the narrative, and with it the buying criteria everyone else is judged by. You can set your price by the problem you solve rather than by a spec sheet, and investors and analysts treat you as the reference point for the market. A competitor can copy a feature in a quarter. One who copies your category ends up describing it for you.
What does category design look like in practice?
Red Bull sold a small, expensive can on what the drink did for you rather than on how it tasted, and stocked it in clubs, on campuses, and at ski resorts instead of next to the colas. Supermarkets eventually gave "energy drinks" a shelf of their own.
Apple didn't invent the MP3 player. While rivals advertised gigabytes, Apple sold the iPod as "1,000 songs in your pocket", then opened the iTunes Store, where a song cost 99 cents and took one click to buy. Buyers stopped counting gigabytes and started counting songs.
Uber never called itself a taxi company. It sold on-demand rides: the car comes to you, you watch it arrive, and you get out without reaching for a wallet. Taxis ended up competing on Uber's terms.
Closer to home: when Hypecast came to us, "Corporate Audio" wasn't a category anyone was buying in. We named it and built the strategy around it. Within a year, revenue had more than tripled, and Hypecast has since acquired a competitor. Read the case study
How do you design a category?
- Fact-finding: interviews with leadership, customers, and people who know the company from outside, plus research into the market, until the problem is clear from the buyer's side as well as yours.
- Leadership sessions: the findings go in front of the leadership team, and the team settles the one position it is prepared to defend.
- The North Star document: the category, the problem you own, and why your company gets to define it, written so that product, marketing, sales, fundraising, and hiring can all work from it. What a North Star document is
- Follow-through: the category exists once other people use its name or narrative, starting with your own sales team and ending with customers, analysts, and press. That takes months, not weeks.
When is the right time for category design?
It's usually time once buyers start comparing you line by line with your competitors, and you find yourself giving up margin just to win the deal. For a founder, that's often an investor asking how you're different from a better-funded rival. For a scaling company, it's the discount that has quietly become part of every deal. And for an established company, it's a market you used to lead turning into a commodity around you.
Who can help with category design?
Forward Momentum is a management and brand consultancy based in New York, working globally, that specializes in category design. Our approach, North Star Momentum, covers the whole sequence above: fact-finding, leadership sessions, the North Star document, and the months of follow-through that make the category stick. Engagements run from the $8,000 Positioning Stress Test to full-service category design. See them all on our Pricing page.
Frequently asked questions
Is category design the same as branding or positioning?
No. Branding and positioning work inside a category: they decide how you look and how you compare. Category design decides which category you are in, and branding and positioning follow from it.
Does category design only work for startups?
No. Established companies use it to get out of a market that has turned into a commodity, or to launch something new that doesn't fit the category they're known for.
How long does category design take?
The strategy takes three to six weeks, depending on how much of it happens in person. Putting it into use takes months, which is why our engagements include six or nine months of follow-through.
Is category design just a new name for a marketing campaign?
No. A campaign runs for a season and promotes what you already sell. Category design changes what your product is compared against, and it has to show up in product, sales, fundraising, and hiring, not only in marketing.
Is category design the same as demand generation?
No. Demand generation, despite its name, doesn't really generate demand; it fills your pipeline with demand that already exists. Category design, however, creates new demand, for a problem buyers hadn't named yet, and gives your demand generation a story no competitor can run on.
If you'd like to know which category your company could own:
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