Having reviewed April Dunford's book, Obviously Awesome, on product positioning, it was about time we tackled the positioning problem at a more strategic level. How do you position your company in a way that gives you a lasting competitive edge? What about the market? Can you take your positioning efforts to a higher level and reposition the market segment you will compete in? Christopher Lochhead, Al Ramadan, Dave Peterson, and Kevin Maney, the authors of this month’s book, Play Bigger, think that you must. They argue that companies that can create new segments within the market stand to take in most of the profits, eventually becoming one of the companies that shape our daily lives as Apple, Google, and IKEA have done.
Is category creation another shiny concept Americans have invented to describe an already existing phenomenon, or does it truly serve a purpose? In this case, the concept of category creation refers to a strategic initiative to position a product as the sole player in a segment of the market. The authors of Play Bigger define it as such:
"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."
The authors regard category creation as a strategy to develop businesses that will dominate their respective segments for generations to come. This belief is based on a simple premise:
"Change the way people think, and they will change their buying behavior."
What motivates the category creation efforts is the fact that category kings grab 70 to 80 percent of the profits and the market value of the category they created. As an entrepreneur, you stand a much better chance to dominate the market by defining a new category around your product instead of competing in a category defined before. Category kings can dominate the market because they define a problem for the first time, and their names become synonymous with the solution to those looking for one.
The critical point about category creation is that it is not something you can choose to ignore. If you don't design the category you are operating in, somebody else will do it for you, forcing you to play according to the rules you did not set.
Play Bigger argues that you need to have a point of view (POV) and execute a series of "lightning strikes" to successfully create a category.
POV is not a marketing text to advertise the features of your product. POV is the overarching narrative you build to define and draw attention to a problem, positioning your product as a unique solution. It aims to tell the world how your product is not just better than but different from the other players in the market. It starts with educating the masses about a problem they didn't know they had. Then comes your vision for a new category to tackle this problem, revealing what you think would be the ideal solution. Finally, you describe a future without that problem, detailing how your solution will have changed the world.
The second tool, the lightning strike, refers to a set of marketing actions you undertake to make your POV the talk of the town. A lightning strike might be a dedicated event like an Apple product launch where you announce your POV in a dazzling way. An alternative would be an act of piracy to steal the show at a trade fair or a conference. The idea is to concentrate all your resources on promoting a problem and saturating the communication channels with your proposed solution. The lightning strike informs the world of an urgent and inevitable new category, conditioning them to accept your product as the solution.
Personally, one thing Play Bigger has achieved is helping me understand why people like Peter Thiel and George Gilder were infatuated with monopolies. The kind of monopoly these people alluded to was nothing like the monopolies of old, such as a mining concession given by the government to an oligarch or a company becoming the sole provider of communication services in a country. It dawned on me that the "competition is bad, monopolies are good" mentality was based on category creation. Thiel and his comrades believe “the best companies create their own sectors.” These companies are “natural-born monopolies.”
On a side note, that annoying habit of thought leaders to coin terms or acronyms for every little thing has something to do with category creation, too. Every time you coin a new word, you are actually defining a new problem. By doing that, you essentially become a category creator people like scholars, journalists, or podcast hosts can turn to. Who better to talk to than someone who defined a problem for the first time?
Play Bigger does a great job of driving home a few key points.
Category creation is a great way of training people to start feeling a need.
Category creation takes a holistic approach as it involves simultaneously positioning your category, company, and product.
You will cover more ground if you develop a category-creating product rather than another "me-too" product. Being different rather than just better is the way to go.
Play Bigger has a telos, an end state it wants to achieve, which involves proving the worth of category creation as a discipline. Therefore, every example or statement in the book is curated to elevate the image of category creation. At times, the authors are basically engaging in boxscore punditry, attributing anything good to successful category creation and anything bad to failure to properly design a category.
According to the authors, if a company increases its market share, it must be thanks to successful category creation. But when it comes to Gillette's failure to reap the benefits it expected to unlock by creating the battery-powered toothbrush category, they attribute the failure to being too late to define the category. Category creation is their panacea, the silver bullet to solve every problem. The authors seem to believe that you have to create a category, regardless of whether there is a need for one.
The book's jargon leaves a lot to be desired. Coining new expressions (lightning strikes, thunder claps, strike master controller, chief hijacker, frotos) every few pages can get tiresome, especially when the expressions are neither interesting nor catchy. Maybe we don't need to coin a new word for every stage or every transient role in a process.
The book was written by marketing gurus, so it is no surprise that marketing jargon is strong in this one. However, you sometimes get the feeling that the authors are pushing it a little bit, even when their theory doesn't fit the case perfectly. It is as if they have hammers in their hands and are looking for nails to hit on the head.
The authors have confidence in their theory, having seen success in their respective companies, and a brashness to go with it. However, their pompous attitude seems really out of place at times. Listing "ten reasons you shouldn't read the rest of this book" or telling the reader to "... put the book down, because you are not our audience..." This over-the-top marketing swagger seems hard to justify in a topic like category creation, even if your name is David Ogilvy or Don Draper.
The authors apparently worked for SAP at some point, offering consultancy to help the German giant create a new category of cloud-based ERP, which it could dominate from day one. The partnership did not work out for some reason, and the authors seem bitter about it. They keep mocking the company throughout the book, going so far as to say that it has "old-man balls." The authors seem to appreciate edgy and confrontational characters like Marc Benioff but using a book for thrash talking is another level. I'd love to learn about the other side of the story and hear from the SAP executives why they did not buy into our fantastic four's vision.
Category design or creation is one of the most transformative steps you can take for a company. Nail it, and you can enjoy the benefits for decades as long as you keep creating new categories. Play Bigger does a good job of underlining what category creation can achieve for a company and lays out an actionable plan to make it happen. The unpleasant style of the authors is just a small annoyance compared to what you stand to gain from the book.