Category creation is one of those terms du jour that agencies and branding “gurus” like to throw around when enticing disruptive innovators to engage with them. Our take at Park & Battery: buyer beware. Let’s break it all down, explore what true category creation is, when it’s relevant, and what’s required to get it right.
Changing the game or just a new label?
Category creation is a brand strategy that involves carving out a completely new space in the market, positioning a brand not just as a leader, but as the pioneer of a whole new category of products or services. More than just launching a new offering within an industry, it’s about inventing a new market in which your brand is blazing the path forward. Brands like Salesforce with “cloud CRM” or HubSpot with “inbound marketing” didn’t just disrupt their industries – they transformed them.
Category creation is about more than introducing a new product or service – it’s about positioning that offering as fundamentally different from anything else available, to the point where it demands its own category. This isn’t just product marketing, it’s about redefining the playing field. You’re not simply a better version of an existing solution; you’re something entirely new.
Brands like Salesforce, which created the “cloud CRM” category, or HubSpot, which spearheaded “inbound marketing,” are often hailed as the poster children of category creation success. They didn’t just disrupt their markets, they redefined them.
However, true category creation requires significant investment—not just in product development, but in market education. You’re asking your audience to understand and embrace a new way of thinking about their challenges and solutions.
But true category creation demands more than innovative products. It requires heavy investment in educating the market and convincing your audience to see things your way. That’s a heavy lift, which is why many companies stumble.
“Creating a new category means you have to teach your audience a new way of thinking – and that takes time and money.”
When B2B category creation works wonders
There’s no denying that category creation can deliver massive benefits for brands that do it right. Here’s why some brands chase this strategy:
- Uncontested Market Leadership: If you’re the first to create a category, you get to define the standards and narrative. Salesforce didn’t just launch cloud CRM – they became synonymous with it. Competitors are forced to follow the rules you set.
- Higher Valuation: Investors love a visionary. If you’re not merely competing but creating a whole new market, you can command higher valuations. A brand that defines a new category paints a picture of limitless growth, which investors find hard to resist.
- Longevity and Stickiness: Category creators often maintain longer-term dominance. By establishing a new category, you create a moat around your business, making it harder for second-movers to dethrone you.
Why B2B category creation could backfire
Despite its allure, category creation isn’t for everyone. It’s a high-risk, high-reward strategy that can easily flop if not done right. Here’s why some brands regret going down this path:
- High Costs and Risks: Creating a category requires more than a clever tagline, it demands substantial investments in market education. Convincing an industry to adopt a new mindset can drain time and resources, and there’s no guarantee it will pay off.
- Potentially Slower Adoption: Convincing people to embrace a new way of thinking takes time. Category creation is a marathon, not a sprint, and the slow pace of adoption can frustrate brands that need faster results.
- The Gimmick Factor: Not every product deserves its own category. Sometimes, brands push category creation as a gimmick to stand out, but without enough substance behind it, customers quickly lose interest. If it’s all flash and no substance, the market will see right through it.
A tale of two P&B category creators
We’ve recently helped guide two remarkable brands through successful category creation, shaping their markets with innovation.
Truepic and its technologies enable people to transparently see where and how content – primarily photos and videos – was originally created, as well as what specific edits have been made since creation. When we engaged with Truepic, they were positioned as an award-winning virtual inspection tool – but they (and we) saw them as having the potential to be even more. Recognizing the greater cultural need and opportunity around synthetic media (deepfakes, AI-generated content and more), we helped them create the Digital Content Authenticity (DCA) category.
Why category creation? In the new world of AI-generated content, there was no clear leader in protecting authenticity – nor anyone with the technology, expertise, advocacy or passion to take on this issue of our times. When it came to validating the authenticity of content, the obvious question was: if not Truepic, then who? They truly were and are establishing a new and mission-critical category for the future of digital communications. Watch this video Truepic created based on our work together and you’ll see what we mean.
MacroHealth is the first and only provider of Intelligent Health Market as a Service (IHMaaS) solutions, making buying and selling healthcare radically simpler and more effective. MacroHealth empowers payers to create their own intelligent health networks that seamlessly connect healthcare buyers to their entire ecosystem of providers in one integrated platform. More than a singular point solution, MacroHealth breaks new ground by bringing everything and everyone together in one solution.
Why category creation? Big, hairy, audacious, painful challenges sometimes call for bold and singular fixes that no one else looks for. Noted entrepreneur and co-founder of Y Combinator Paul Graham calls the conscious (or unconscious) avoidance of these beasties “schlep blindness.” MacroHealth is owning the schlep of solving the incredible complexity for its customers – and, in the process, America’s skyrocketing healthcare costs. Their unique solution demands a category. (For another great B2B example, read about payment innovator Stripe in Graham’s post above).
To create or not to create?
Category creation can be a powerful growth engine for brands with the right vision and resources, but it’s not a universal solution. For some, it’s a game-changer that leads to lasting market dominance. For others, it can feel like a costly gimmick that fails to gain traction.
The key is knowing whether your product truly needs a new category or if it’s better served by refining its position within an existing one. If your solution is disruptive enough, and you’re ready for the long haul, category creation could put your brand in a league of its own. Just remember: it’s not about being first. It’s about being first with a vision that changes the game.
