We are all wired for “category”.  It’s how we think and manage in a crowded, noisy world.

Whether as a consumer walking into the supermarket (hint: it’s not organised alphabetically); or in a business environment looking at a spreadsheet (say for your marketing budget).  All those line items are categories, and within each of those, you also form an opinion on who is the category leader and, thus who you will assign the budget to.

We also create and delete categories all the time in our minds.  “Blu-Ray DVD” used to be important to us but is no longer relevant; the category has moved on.

So the core fact and realisation is that you and your product will always be in a category.

The second big “ah-ha” is that your category will morph and evolve over time.  It is a constant creative construction and de-construction. Think about the telephone to the cell phone to a smartphone.  And along the way, there are casualties such as “Personal Digital Assistants” that never reach critical mass and are not accepted as the “category”.

A category doesn’t start with a product.  It starts with a problem.  It was the ability to have mobile connectivity with my phone, but then evolved to solving the problem of all of my devices and functions across music, camera, email, web and search in one place and evolved into a new experience on the “smartphone”.

The way categories form and evolve is incredibly consistent. Paul Geroski won a Nobel Prize for his research on category formation, showing that new categories are not driven by customer demand because customers cannot accurately identify or describe their future needs.  Rather it is a “supply push” by innovators.  These early innovators, engineers, or entrepreneurs often are not the players who eventually lead the market and category.  Rather it is the “consolidators” who tell us a clear story and demonstrate the “dominant design”.

The consistent shape and evolution of a category is a slightly flattened bell curve (see road sign visual above), showing a few initial entrants, to take-off and rapid growth in the number of companies (especially as the dominant design emerges), and then a flattening of the curve as companies fail/exit, and the category leader fully emerges.

This un-orchestrated push of new tech and innovation at the outset thus becomes a ripe opportunity to describe the over-arching problem that is relevant to your audience. It is this problem-centric design, enabled by a clear story and point of view, that is the accelerant to new categories growing, scaling and being led by a dominant player.

Also Read: How Category Design drives productivity and efficiency

The “so-what” in all of this is pointed out in the book,  Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets.  The book’s large, multi-year dataset shows that the Category King (leader) consistently takes up and controls 76 per cent of the category’s economics.   This is then followed by a distant second and third player.

Think about the smartphone example. Apple as the clear smartphone Category King, has a share of net profit at 72 per cent (in 2022).  This has evolved and emerged from Steve Jobs (a great evangelist and Category Designer), giving us a point of view on what that “itch” or problem is:  a mobile phone, but also web interface and surfing, with touchscreen capabilities and bundling of music player and other functions.   It became the “dominant design” in the category, with everyone else following.

Change before you have to

So now carefully consider the category you are in and these three key routes to drive your thinking:

Is the problem, around which your category is centred, changing? How would this reframing of the problem and the category affect your own position and thought leadership in the category?

Think carefully and methodically as a category designer on how could or should the category evolve?  How can you reframe your “Point of View” to drive this evolution of the category?

Remember, it’s the problem that is critical here. Your Point of View cannot lead with your product; it needs to be crisp and compelling on what the problem is and how it is impacting your audience.

Secondly, consider the technology and solution landscape.  How are your solution roadmap and “Blueprint” evolving and pacing the category’s evolution?   Your Blueprint clearly shows your strategic intent to be the category leader from a solution standpoint, and thus what elements of it should be updated or accelerated?   What technology change or disruption could impact the category and, therefore, you as well?

If a re-framing of the problem and point of view emerges, is your Blueprint still cutting-edge and relevant?  Consider again the example of the cellular phone to a smartphone, with the operating system (OS) at the heart of that smartphone.

• Nokia’s use of Symbian was an eventual epic fail: clunky, hard to use, and in a very closed environment.  But then, so was Blackberry’s OS with an even more epic fail.
• Apple’s Swift development platform for iOS is considered the industry’s most intuitive (more so than the fragmented Android environment). It has consistently ensured that new apps and functionality are built out by technology companies for the App Store, refreshing Apple’s Blueprint.

So beyond your consumer/customer-facing products, is there a platform, programming, distribution or other Blueprint change that could impact the category?  What could you deliver in order to drive this evolution of the category?

Your ability to thrive depends on the tribe

Thirdly, beyond the Point of View and Blueprint, how is the “Ecosystem” around the category evolving?

Category Design thinking shows you that a category cannot exist around one company and needs an entire ecosystem of players. If you have truly mapped your category, then you have created a unique visualisation of the ecosystem and its constituents (with your company only being one slice of the entire category’s ecosystem).

Also Read: Peanut Butter vs lightning strike: What’s your GTM strategy?

Now consider what could disrupt, evolve, or extend the ecosystem.

Could routes to market or channels change and impact the category?   Could new bundling of services and capabilities impact the ecosystem’s dynamics?

What is the business model overlay for the ecosystem?  Symbiotic/marketplace/cooperative/value chain are four of the most common business models that we see clients working in and with.   What could change the business model?  Is this an opportunity or a threat?

Be the change

Build this category review and strategy cycle into your overall planning.  This significantly lowers your risk of being caught flat-footed on potential changes to your category and positioning within it.

And as you think about Category Design and the above three critical components to it, consider this fundamental truth:

You will always be in a category.

The question then is: Do you want to position or be positioned?

If you don’t define the problem and category, then someone else will. It’s your opportunity to lead, not follow!

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