How do you market a company that is selling something fundamentally new and different?
This week on The Inbound Success Podcast, John Rougeux of Flag & Frontier talks about category design.
It’s not a tactic for every company, but when used strategically, category design can drive truly remarkable marketing results.
John digs into who category design is right for, how long it takes, what a category design go-to-market plan looks like, and how to gain organizational support.
He also shares examples of companies and marketers who’ve successfully created new categories.
Highlights from my conversation with John include:
- John is an experienced category designer who has also owned and exited a business.
- He says that compared to traditional inbound marketing strategies, category design requires a much larger lift when it comes to educating the market.
- Every business has a choice to either compete in an existing market or create a new market.
- If you’re creating a new category, you have three choices: 1) try to fit your product within an existing category; 2) ignore category in your marketing and focus on the product’s features and benefits; or 3) create a new category. John says options 1 and 2 don’t work.
- When considering whether category design is right for you, you need to honestly evaluate your product and determine whether its simply a niche within an existing category or something that has truly never been offered before. If its the latter, then category design is really the only logical solution.
- Category design takes time. John says you should expect to spend six to nine months just designing the category behind the scenes, and then once you roll that out publicly, it can take another few years before it really takes hold.
- Category design needs to be a business initiative, not simply a marketing strategy, because it affects product roadmaps, sales and more.
- When executing a category design strategy, it is critical to focus marketing messaging on the problem that your audience is experiencing and the outcomes that they will experience as a result of your solution rather than how the product itself actually works.
- The companies that have been most successful at category design have evangelists whose job it is to go to market and talk about the problem and why there is a new solution.
- Its also important to build a consistent conversation around your new category. That might mean holding a big event (like HubSpot’s INBOUND or Drift’s HYPERGROWTH) or building a community, like Terminus’s FlipMyFunnel.
- If your company is venture-backed, it is also important to get your investors on board with the idea of category creation so that you have the funding to support the strategy.
- There are examples of category design all around us. Some of the bigger and more visible ones are minivans and music streaming services. The category wasn’t created overnight, and in many cases, people don’t even realize its a new category, but we see it is as fundamentally different from the status quo, and that is what successful category design looks like.
Resources from this episode:
- Visit the Flag & Frontier website
- Email John at John@FlagandFrontier.com
- Visit John’s personal website
- Purchase a copy of Play Bigger
Listen to the podcast to learn more about category design, when it makes sense, and how you can use it to dramatically improve your marketing results.
Kathleen Booth (Host): Welcome back to the Inbound Success Podcast.
I’m your host, Kathleen Booth. And this week, my guest is John Rougeux, who is the founder at Flag & Frontier. Welcome, John.
John Rougeux (Guest): Hey, Kathleen. Thanks for having me on.
John and Kathleen recording this episode.
Kathleen: Yeah. I’m really excited to have you here for completely selfish reasons.
I am deep, deep into the weeds, trying to learn everything I can right now about category creation because it’s something that I’m kind of working on for a little project at work. And I stumbled across your name.
I think it was in a LinkedIn post mentioned by Sangram Vajre at Terminus, and he mentioned you as somebody who’s doing a lot of work on category creation. And I immediately thought, oh, I need to have him in on the podcast. And here you are. I am so excited, so welcome.
John: Thanks. Thanks. I actually want to come back to something that you said a minute ago. You mentioned this was a little project for you, so I’m going to pick your brains about why it’s not a big project.
Kathleen: I think I might just be downplaying it.
John: Okay, all right.
Kathleen: It’s a huge project.
John: All right.
Kathleen: Yes, yes. It is a giant. In fact, it’s probably bigger than I think it is. No, it’s-
John: Well, Sangram told me a few weeks ago. He said, “If you’re not doing something that scares you a little bit, then you’re not setting your sights high enough.” So I think you’re on the right track there.
Kathleen: Yeah, no, I think my whole career has been a succession of choices that consistently terrify me. So hopefully, that means I’m on the right track to somewhere. So you have an interesting story.
You started out or your career really grew in B2B tech, and you worked in some companies that were looking at category creation as a potential strategy and it seems that that wet your appetite and led you to where you are today.
Can you just talk a little bit about your background and how it got you to where you are now and what you’re doing now with Flag & Frontier?
About John Rougeux and Flag & Frontier
John: Yeah. Yeah, happy to. So the thing that I like to tell people is that I always wish that I knew about category design earlier in my marketing career. I think it would have helped me be more successful and make better choices and think through the strategy of what I was working on at the time a lot more thoroughly.
So the reason I say that is in 2013, I co-founded a company called Causely. And I won’t get too far down into the weeds of what Causely does and the business model, but we were basically using cause marketing as a way to incentivize people to take action.
And specifically, we were looking at incentivizing referrals on social media. And at the time, I was looking at marketing through a fairly narrow lens, like a lot of people do maybe when they are kind of earlier in the middle of their marketing careers.
We were looking at things like you know how do you improve the performance of an advertising campaign? How can you write a better better blog post? All of those kind of tactical things. And I didn’t realize at the time that what we were doing was something categorically new.
People didn’t have context for what that meant, what they should compare it to, what value they should expect, what things should it replace or not replace? And so we had a reasonable trajectory.
We scaled the business to a few thousand locations. It was acquired. But when looking back on it, I know that if we had had this lens of category design of how do you describe something when it’s different than anything else out there, I think we could have gone even further.
And so when I joined a company called Skyfii in 2018, I had started to kind of understand what that meant, so I had read Play Bigger. I read some, the works by Al Ries and Jack Trout that talk about how if you can’t be first in a category, design any category you can be first in.
And at Skyfii, that business, it’s a publicly-traded SaaS company out of Australia and they found that they were participating in a fairly commoditized space. Or I guess to be more accurate, the perception was that they were a competitor in a fairly commoditized space.
And their business had evolved past that and the product did all sorts of other things that were much bigger than the category the market thought they participated in, but they didn’t really have a framework for talking about that.
And so we went through a repositioning exercise where we defined a new category that better reflected what they were all about and and how people should kind of relate to that.
And that was a really, I think, powerful and challenging exercise to think through. We’ve got something new in the market, but how do we describe that? How do we tell the right story? How do we tell the right narrative so that people know how to relate to it?
Why category design is a fundamentally different approach to marketing
Kathleen: This is so interesting to me. There’s so much I want to unpack here.
I guess, starting with something that you kind of started with, which is that there is this typical marketer’s playbook, right, where people come in and they think, “Oh, we need to top, middle, and bottom of the funnel. We need to create content and attract people,” this and that.
And when it comes to category creation or trying to market something that is different than anything else people are used to, that playbook doesn’t really work.
Because as I’m quickly learning, especially looking just at the top of the funnel, traditional top of the funnel marketing, it’s like well what is that problem that people are having and they start to look for a solution. A
nd the challenge you have is that if the solution you’re offering is something they’ve never heard of, it’s such a steeper climb to try and gain their attention. It’s like they don’t know the right questions to ask even, if that makes sense.
John: No, that’s absolutely right. And I always like to mention a really thoughtful post that Mike Volpe, the founding CMO of HubSpot wrote a few years ago because it lays such a great groundwork for any discussion around category design.
And the blog post simply says that look, every marketer has two choices on their strategy. They can pick an existing category and try to carve out a niche within that category. Maybe they can dominate that category. But basically, they have to pick a space and then do the best they can within that space.
Or they can try to design a new category. And when you look at kind of the underlying product or business model and you really take a close examination of what it is and whether it’s different or whether it’s something better, you almost don’t have a choice.
If you’re doing something that is new that people don’t have a framework for, you really have three choices. So I want to pack these for you. So choice number one is you can try to shoehorn this new thing you’ve built into an existing category. And we’ll come back to why that doesn’t work in a second.
Number two is you can just talk about the products, like features and benefits but not really think about a more underlying narrative for that. And then number three is you can design a new language, a new framework, which is called category design.
And so here’s why number one and number two don’t work. So again, number one is if you try to shoehorn something new into an existing category. The reason that works against you is that people will make the wrong comparisons for what you’re supposed to do, how you’re supposed to be priced, how you deliver value.
That just works against you. Secondly, if you just try to talk about the product itself but don’t provide a larger context, you’re not giving people, you’re not giving them really any framework, and it makes it difficult to understand what you’re all about and why they should be interested in you.
I’ll give you a great example. A friend of mine works at a company and I won’t mention the name of the company, but they combine two different categories kind of in an existing platform.
So one of these is VoIP, Voice over Internet Protocol communication software, very established, known space. The other thing they do is they have these marketing automation functions that they add to their software to at least in my view very disparate types of software, but they combine them together.
And so far, they haven’t really given their buyers a context, a category for what this thing means. And so they’re basically letting people to their own devices to understand and come up with their own conclusions about what that is.
And that just puts a lot of work on your buyers when they have to think about who they should compare you to when they need to think about what department is this even for, or what products does this replace or not replace?
That’s generally too much work for people when they’re trying to understand something new. And like you said, Kathleen, if you’re not telling them what questions they should ask, then chances are they’re just going to be too confused before they’ll even really be interested in having a conversation with you.
Kathleen: Yeah, and there’s two other aspects to what you just said that I think are really interesting, which I’m beginning to appreciate more with the work that I’m doing. One is that human nature is such that people want to slot you into something that they already understand.
They don’t want to have to think outside the box. So when people hear about something new, that their natural inclination is to try and categorize it in with things that they already know. And that’s a hard thing to battle because you are literally battling human nature.
And the second thing is if you do allow yourself to be put into a category that already exists that maybe isn’t really truly what you’re doing and you are actually successful in selling your product, you will wind up having a lot of problems with churn once you do sell it because people are still going to be thinking that you are like that other thing that you’re not actually like.
And they’re going to be looking for your product or your service or whatever it is to solve for them in the same way that other thing does, when in reality your thing does not solve those problems.
So it’s like you’re setting yourself up for a very long horizon of failures that you might not see at the outset, but it’s kind of a you’re failing before you’ve even begun.
John: Yeah, that’s a great point. And yeah, people do… They tend to… The world is so complicated, and there’s so many things that we have to deal with and try to understand that we use this rule of thumb of categorizing things.
Sometimes we do it explicitly, like smartphones are a great example of a category we all know about and buy them and we know why they’re different than a mobile phone. Sometimes we just do it implicitly.
We don’t necessarily have the language or the terms to describe that category, but we know that we try to group likes things together because it makes it easier to understand the world.
Kathleen: Yeah or we use analogies. So many times, you hear things like, “Well, that’s just the Uber of,” and then they list a different industry. Or, “That’s the Airbnb of something else.”
John: Yeah, that’s right.
Kathleen: And so we’re constantly trying to put these things into comfortable mental frameworks, which I think is fascinating. So you mentioned there were three things. The first two, I think you covered. And then the third is really designing a new category.
John: The third is designing a new category. That’s right. That’s right.
When does category design make sense?
Kathleen: So how do you know… I guess the first question is how do you know when that’s the path you should be taking?
John: That’s a great question because I’ve heard from some people that they have this idea that every company should try to design a category, and that’s really not the case. It applies to some companies. But for many other companies, like if you’re developing a CRM, a better version of a CRM, don’t try to build a new category around that.
So yes, so the way you would look at that is there’s no formula you can put into Excel and calculate and churn all this out, but it really comes down to does the thing that you’ve built, does it solve a problem that has not been solved before? Or does it do so in a way that the world isn’t familiar with?
So is there a new business model behind that? Is there a new delivery mechanism behind that? It really comes down to those two things. And maybe if you want to look at it at a more fundamental level, you could ask yourself do the existing categories that my market is familiar with, do they accurately capture the type of thing that I’m offering?
If they do, then one of the reasons you may want to choose to carve out a niche in an existing category is that people are looking for established products in established categories. People are looking for marketing automation software, they’re looking for smartphones, they’re looking for video communications tools like Zoom, like we’re using today.
And so, if you say, “Hey, we have the right tool within this category for this specific market or for this specific need,” that can be very powerful. And arbitrarily forcing yourself out of that category just because you like that idea of category design is going to work against you.
Now, that being said, again to kind of flip it around, if you find that the categories and the language that are used to describe existing products your market is familiar with just don’t capture what you’re doing or they limit it in some way, then ultimately you need to find a way to break out from that and that’s what the process of category design is all about.
What does it take to create a new category?
Kathleen: Now, one of the things that I’ve come to appreciate just the more I look at this is what a big lift creating a category is. As you said in the beginning, this isn’t a little project, right? I would love it if you could just talk a little bit about sort of expectation setting.
If somebody is listening to this and they’re thinking this really sounds like it could make sense for me, from your experience and what you’ve seen and you’ve talked to people who’ve been involved in category design, how long does it take before you can really expect that the market will recognize a new category?
John: Yeah. It’s a pretty long-time horizon. And so I mentioned Mike Volpe at the beginning of the call and I’ll mention him again and Kipp Bodnar, the following CMO of HubSpot mentioned the same thing I’m about to tell you.
And they told me that when they first started talking about inbound marketing, it was like standing in the middle of a town square on a soapbox just shouting into the wind with nobody paying attention.
And that was the case for two to three years before that phrase really started to work its way into the lexicon of marketers.
Salesforce, they pioneered, not so much CRM but cloud-based software. And even today, they still talk about other applications to cloud-based software that’s 20 years later.
And another example might be… So at Terminus, they talk about the account-based marketing gospel. And maybe this kind of hints to the challenge of how difficult it is to build a category. Sangram used to be there, I think he was their head of marketing if I’m not mistaken.
He’s definitely a co-founder, but his role is chief evangelist. And so they recognize that to really get people to be aware of and to understand and use this terminology around account-based marketing, they’ve had to invest very heavily in evangelizing that market or that message out in the market.
Kathleen: Yeah. The other story that I’ve always found interesting… I followed all the ones you just mentioned really closely. And then the other one that’s been fascinating to me is Drift because they came on the scene.
And if they’re listening, they may take issue with what I’m about to say, but look. A big piece of what their product does is live chat, website live chat, and then they have chatbots. Well, those things have been around for a while.
That was not anything new, but they were really smart and they coined it as conversational marketing and they really focused more on, not so much the how and what the technology does, as what it enables the business to do, and kind of wrapped a methodology around existing technology in a way that made it feel fresh and new.
And it was pretty genius. And I feel like they actually moved really quickly by comparison to a lot of the other examples I’ve seen. So it’s interesting to me why in some cases, businesses are able to gain traction faster than others.
John: Yeah. I would have to think that a lot of it has to do with the culture and how quickly or rapidly that business has gone through change in the past. And the other thing we should probably discuss is just the timeline of everything that happens before you share your new category with the world.
I was talking with… There’s an interview I did with, let’s see, Anna and Cassidy at a company called Narrative Science. And they expected just the category design process itself to take about six to nine months. This is before they released language out publicly.
And at Skyfii, that was our experience as well. And for that situation, that company, I think they were founded in 2012 or 2013. So they were five, six years into the business and there had already been a lot of discussion around the space that they started in, which was Wi-Fi marketing or Wi-Fi analytics.
And so anytime that you’re going into a space where the culture already kind of thinks and has a mental model for what their business is, the process of reworking all of that and getting everyone on board, especially the leadership team and perhaps even investors, getting them on board with that new message in a new way of thinking about the business, it takes time. And I would argue it should take time.
Because if you rush the process and you ask your team to start using maybe even radically different language about what you do, people need time to really think through that and maybe they need to push back or challenge you a little bit or ask questions or provide suggestions.
There’s just this change management process you have to go through. And if you rush through that, people are not going to feel like they’re a part of that process. And then ultimately, that’s going to undermine your efforts in years one, two, three and further as you’re asking your team to help you share that message.
And at Skyfii, Skyfii is publicly traded in the Australian market and so they have investors and they have a public… They’re very thoughtful about the message they put out into the market. And so they really wanted to take the time to make sure that message was right and that it made sense.
And so, yeah, it took us, I don’t know exactly how many months, but yeah, around six to nine months to really start that discussion and then get to a point where we were comfortable with the category name and the underlying narrative to support it.
Why category design needs to be a company-wide effort
Kathleen: Yeah, and I think there’s… To me, one of the most important things is consistency because you kind of said if everybody is not on board and everybody isn’t speaking from the same playbook, all it takes is one or two people to diverge and talk about your thing and language and terms that puts it squarely back in with all of the other things out there that… And it destroys your effort.
John: Yeah. Well, and this is probably a great segue into another really important point about category design, which is that it’s not a marketing project.
Sometimes, it can be spearheaded by marketing, and marketing will often do a lot of the legwork, but it’s not something that’s relegated or exclusive to marketing. It has to be something that that CEO is involved in.
It affects the company vision and is affected by the company vision. They kind of play off of each other. It affects the product roadmap. It affects what the sales team says. It affects what you might tell investors. So if your CFO is in charge of investor relations, he or she, they have to be on board and educated on the message.
That’s another misconception I heard a few times and it was… Personally, I thought it was a marketing initiative when I first read about it. But the more I dove deep into it and the more people I talked to, I realized it’s actually a bit more of a business initiative, more so than a marketing one.
Kathleen: Yeah, that’s a great point. Having that buy-in top to bottom, it’s really important.
John: Yeah. What’s been your experience at Prevailion in kind of leading your team in that discussion?
Kathleen: So it was interesting because I came in really excited to make this a category design play. And shortly after I came in, we hired a head of sales, who also had some experience with category design and saw that that was a really strong play for us.
He and I had both read Play Bigger, and we just kept talking about it until we basically beat the rest of our leadership team down into buying copies of the book. They’ve all now read it. They’re all super excited about it, and it’s great because it’s given us a common language and framework around which to talk about what it is we’re doing.
So we’re still really early stage, but I think we have that excitement and that buy-in in principle at least is there. And now, we’re at the stage where we have to figure out our plan.
What does a category design strategy look like?
Kathleen: So along those lines, let’s talk a little bit about somebody who’s listening and they think, “Yep, this makes sense for me. Okay, I’m going to set my expectations. I understand I need to get top to bottom buy-in.”
What are the elements that you’ve seen in your experience from the companies that you’ve studied that have done this that contribute to successful category design efforts. In other words, what would be a part of a company’s plan if they were looking to move forward with this?
John: Yeah. So I’ll mention two things that come to mind. So one I touched on a moment ago, but it’s making sure that the CEO and the leadership team are involved and to the extent that they feel like they have a stake in the success of the project.
What I mean is it’s not enough for them to say, “Sure, that sounds great. Category sounds great, Mr. or Mrs. CMO. Go for it. Let me know how it turns out.” That’s not sufficient for getting buy-in. So getting them to be a stakeholder and have a real level of participation, that’s absolutely key.
And there’s an interview I did with Chris Orlob of Gong.io, where we talk about that in more depth. So if you want to link to that, I’m happy to-
Kathleen: Yeah, that would be great. I would love that.
John: Yeah. The second thing is category design, it’s all about talking about a problem that you’re solving and less about the product. And so one thing I always like to say is that problem… Let’s see, so your solution, your product. Solutions don’t exist without problems, right? And then problems don’t exist without people.
And so you have to go back and understand the people that you’re trying to work with and serve, and understand the problem you’re trying to solve and the language they use to describe that problem, and the context for which they’re trying to solve that problem or maybe they’re not even aware that it is a problem or they think it’s unsolvable.
The point is you have to really understand the problem first and use that to lead your messaging. If your category is all around, here’s why this specific product is so great and it’s called this category, you’re kind of missing the point.
When you look at the language and the marketing that companies like Drift, for example, do, 80% of it is on the problem. Drift likes to talk about how the buying process has changed. Buyers are not interested in waiting hours or days or weeks for someone to respond to them. They want a response now. And you even see that word, “now”, used.
Kathleen: Yes. That word, that one word… I went to HYPERGROWTH. I think it was not this year, but the year before. I went this year too.
Kathleen: The year before, their whole keynote at HYPERGROWTH was all about the one word, “now.” And it was so powerful, the way they distilled that down I thought, really, really simple but effective.
John: Yeah, yeah. And they’ve written a book around conversational marketing. If you’ve used Drift products, you can kind of see some tie-ins but it’s really about the problem that they’re trying to solve.
And people smarter than me have said lots of times that if you can articulate that you understand the problem better than anyone else, then people will assume you have the best solution.
You don’t have to work so hard to talk about every single little feature or benefit that you offer. Showing that you understand the problem creates empathy with your audience, and then again, they’ll assume that you have the best solution to address that problem.
Kathleen: Yeah, that’s interesting that you talk about that because I think that’s a really easy mistake for marketers to make, which is to say that, especially when you talk about B2B technology, it’s really easy to fall into the trap of talking a lot about what the product does, how the product works. And I think many times, that’s facilitated or even encouraged sometimes by the customer asking, “What does the product do? How does it work?”
Kathleen: And yet, I think the challenge as a marketer is to try to really get ahead of that and take control of the conversation and steer it towards not only the problems as you say and really deeply understanding them, but the outcomes that come from the use of the products.
There’s problems, and then there are what is the outcome for the user? How does it make their life better? How does it change them for the better? If you think of those as two different poles, and in the middle, lies the product and all the stuff it does, if you can keep the conversation more at the periphery on those poles, then I think you can be really successful. But that’s tough.
John: No, I’ve never heard it described that way, but that’s a really clear way of describing that. And it’s funny you mention that because I was having the opposite experience just this week. I was there was looking for a new email client for my computer. And that’s a pretty established category. There’s a million email clients. And in that context, you don’t need to talk about the problem of communicating with people.
John: You know what email is. You don’t need to talk about the outcome so much. There were a few features I was looking for and I was trying to find a client that had those features. And so you can talk about that a little bit more upfront when the category is established and people know what the category is, what it isn’t, what it’s supposed to do.
But to your point, Kathleen, if that category doesn’t exist and you’re really trying to sell a vision around solving a problem, emphasizing what the problem is and then emphasizing the outcomes are really what’s necessary to get people interested in just having a discussion around this new idea.
And then from there, they’re probably going to ask, “Okay, this sounds really good. Tell me about that product itself. What does it actually do?” Then you’re in a perfect position to go into those details because they’re ready for it. And they get the larger idea.
Kathleen: Yeah, and that’s where I think the traditional framework of top, middle, and bottom of the funnel comes back into the discussion, right? When you do get towards that middle to bottom of funnel stage, you can get into the weeds of how it works. And I know in our case, for example, it might not even be the same person we’re having the conversation with.
Our ultimate buyer isn’t going to ever care so much how it works. They’re going to hand that part of the decision off to somebody on their team and say, “Validate this for me.” And it’s almost like we’ve talked about it. We just need a spec sheet, but that…
It’s kind of like when you’re going to a conference and you get the convince your boss letter, but in reverse. We’re selling to the boss and the boss needs a convince their engineer letter that they can just hand to them and say, “Here, take this. It’s in your language.
It’ll answer all your questions.” Right? To me, that’s the steps that we need to go through, but if we get too stuck in the weeds of convincing the engineer early, we’re never going to get to convince the boss.
John: Yeah, that’s right. That’s right.
Building your category design go-to-market plan
Kathleen: Yeah. Well, have you seen… So there are those foundational elements of how you talk about what it is you’re doing, how you talk about the category, how you begin to gain share of mind. And then there’s the actual go to market. And I’ve seen a lot of information written.
For example, in the book, Play Bigger, which we’ve mentioned a few times, which is kind of like the Bible for category creation and other places. They talk about the concept of a lightning strike, which is just really a big kind of splashy go to market. It could be an event. It could be some other, something else that really makes an impression on the market and gets it talking about your thing.
What have you seen or have you seen anything that has worked really well as far as like quick, well, I don’t know if quick is the right word, but very high impact kind of strategies for really making an impression on the market?
John: That’s a great question. I’m not sure that I’ve seen a ton of really great examples beyond the few that we’ve discussed. So back to HubSpot, I don’t recall a big… They have their INBOUND event, right?
I don’t recall that having a huge kind of blow up the world moment at the time when that conference first came out, but they’ve certainly been consistent and they made it a very conscious decision not to call it the HubSpot User Conference or even put the word HubSpot in there. It was about inbound, something bigger than themselves.
I’ve seen Terminus, they have focused on this idea of a community of people who are interested in account-based marketing. Sangram told me they started with a fairly small event, relatively small event. And they’ve kind of built it from there. But that’s more of an ongoing exercise, I guess, an ongoing process.
Drift has their HYPERGROWTH conference. They came out with a book called Conversational Marketing. That’s probably the biggest kind of high profile thing they did that was explicitly around that category.
I think one of the things around lightning strikes is that, at least the way they’re described in the book, is that they feel like they could be appropriate for a VC-backed company, or maybe a publicly traded company who’s launching a new category and wants to really make that big splash and can afford to do that.
I would say if you’re earlier on and you don’t have millions to drop on a big event or a massive campaign of another nature, it seems like other companies can can be successful with more of a process-driven approach of who are we trying to get to care about this category? What are they interested in? Where do they spend their time? And how can we just have these conversations with them on a repeatable basis?
Because, like we were talking about earlier, it’s not like once you name your category, the whole world suddenly cares about it and there’s all these… Gartner doesn’t give you a ring and say, “Hey, I guess we’re going to create a Magic Quadrant because we saw your lightning strike.
That’s good. This is so great.” Everyone who I’ve talked to anyway, who’s done it well, has had to dedicate consistent resources over time to really get people to understand it and think about it.
Kathleen: Yeah. You’re talking about something that strikes very close to home for me because I’ve looked at those examples too and I had an opportunity… I’ve interviewed Kipp Bodnar. I’ve interviewed Nikki Nixon, who was one of the first leaders of the FlipMyFunnel community for Terminus. I interviewed Dave Gerhardt at Drift. So I’ve had a little bit of an inside peek into some of those companies.
We didn’t talk about this topic specifically, but what did strike me about all of those conversations and all of those examples is, as you say, consistency but also not just consistency, volume.
There’s a difference between, “Hey, we’re going to consistently blog once a week, and it’s going to be a great blog,” and that’s just an example. All of these companies not only have been super consistent, but they have turned the volume dial way up in terms of the amount of content they’re creating around their category.
I think every one of them has written a book actually, because Brian Halligan and Dharmesh Shah wrote the book, Inbound Marketing. You mentioned the book that Drift wrote. Sangram has written a couple of books.
I don’t know if that’s a requirement or it’s just a coincidence, but I think it certainly has helped. But it’s also a reflection of that turning up the volume. We’re not just going to write a bunch of blogs and use this keyword on them. We’re going to write the book on our topic and really own it. And to me, there’s something to that.
If you’re going to do a category creation play, you don’t necessarily have to have the biggest budget in the world. Maybe you’re not going to throw a HYPERGROWTH type conference, which is a cool conference.
But you are going to need to really be prepared to just saturate the market with content, flood people with educational content around what is that problem you’re solving, why it matters, why it’s new, and why the new approach is better than the old one.
John: Yeah. And that comes down to having patience and the right time horizon. And like you were asking about earlier, if your expectation is that category design is something maybe you can do for a few months and then you can go about business as usual, that’s a wrong time horizon.
And it will take months or probably years for people to really get what you do and talk about it, independent of conversations with you. And you have to have the content to support that, whether that’s an event or a blog or a book or a podcast.
And I think you also have to make sure that your investors understand that vision. They understand that you want to create something big, you want to create a category that you can dominate and design to your favor.
And then if you do that, five to 10 years from now, you will be in a very good position. But also understanding that the first few years will have a different trajectory than someone who’s just really trying to scale growth right off the bat at a very high level.
Kathleen: Yeah, I feel like you just brought the conversation perfectly full circle because we started talking about how important buy-in was, top to bottom. And you can think of top to bottom as like CEO to the bottom of the organization. But honestly, if you have investors, that’s really the top.
Your board has to be totally bought-in because you’ll get a ton of pressure. I mean we do have investors. We just got a series A round, so I’m dealing with this right now. And we’re very fortunate that we have a really bought-in board, but I completely agree with you.
It’s also fascinating, you mentioned earlier analysts. That’s another thing. If you’re working with the analysts, what are the expectations you should have there?
Because I recently read a quote that was like, “Gartner will never create a new market if there’s only one player in it.” Right? Because what’s in it for them to build a Magic Quadrant for one company? They’re not going to do it.
So by definition, if you truly, truly are creating a new category, your thing is new and different and not like anything else and you “don’t have any competition” which is like the bad words to ever say… Because even if you don’t have competition, you have perceived competition.
There’s nothing in it for an analyst to say, “Well, this is a new category because a lot of work to produce a Magic Quadrant or a Forrester Wave.” They’re not going to do it for one company.
So that goes back again to the conversation around time horizon. So it’s such an interesting play and not for everyone certainly. You mentioned a couple of really good examples from the marketing world, Drift, HubSpot, Terminus.
Can you think of any examples from outside of the marketing technology world that are really great examples of category creation? So if somebody is listening and they want to kind of look out in the wild and see who’s doing this well, who would you point to?
Examples of category creators
John: Yeah. Yeah, that’s a great point. Once you understand what category design actually means, you start to see new categories all over the place. So I’ll mention two.
So in high school, Kathleen, I drove a minivan. It had wood siding, I hated it, and it was just the dorkiest car you could drive. But at the time, I didn’t know-
Kathleen: We have to come back and have a conversation about that in a minute.
John: So at the time, I didn’t know that minivans were actually representative of a new category in the market. And I can’t remember when they first came out.
I think it was maybe the mid-80s, and I mean there were these full-size work vans, but people didn’t conceive of this van that you would use to haul your family around. It was a completely new category. And it continues to be… I’ve come full circle. We’ve got a minivan today, another one.
And so anyway, that’s kind of a great example. You see that in automotive all the time, so hybrid cars. The Prius was a great example of designing that category. Tesla now for electric cars, SUVs as well. So that’s one.
And then another one is, I was actually thinking about this on the way to work this morning, the way that Apple and Spotify have really created, I guess, a new category around how music is distributed, I think, is another interesting example. And I think it’s a… The reason I bring it up is category design isn’t so much about a specific name or a specific taxonomy or a word that Gartner has capitalized. It more has to do with the business model and the way people look at a space.
So when Apple launched iTunes, they completely changed the way music was distributed from buying a full album to buying individual songs and to needing to have the physical copy of the media to having a digital copy you could take anywhere. And now, I would argue that maybe Apple or iTunes created that category. They are the first to do that.
But I would also argue that it’s really Spotify, I think, if I’m not mistaken, I think their user number is larger than Apple’s for Apple Music, they’re the ones who have actually designed the category. They’re the ones who said, “This is what streaming music looks like. This is what you’re supposed to pay.
This is about how many artists or songs we’re supposed to have available. This is how we’re going to curate music to you.” And that’s a completely new way of using music or listening to music. I don’t know what the official name for that category is. Maybe it’s just called streaming music. It’s not something I’m an expert on, but that was a very long answer to your question but those I think are two that come to mind for me.
Kathleen: Yeah, I think you’re absolutely right. I do feel like we’re surrounded by category creation. And it’s happening even faster than I think it used to because of the pace of technological change. We just don’t necessarily recognize it as such.
But when you have that framework through which to think about it, you do start to see it everywhere and it’s really interesting to watch. And I think it’s kind of like the whole frog that boiled in the water analogy, which is actually a terrible analogy when you really think about what you’re talking about. But the notion that-
John: Who’s actually tried that by the way? Do you know anyone?
Kathleen: No, God, I hope not. That’s like, don’t they say serial killers start by torturing animals? No, no, no. Do not boil any frogs.
But the whole idea being it’s happening to us. We are experiencing category creation. It’s just that it’s happening at a pace that we don’t like see it. It’s not like a yesterday it didn’t exist, and today it does.
That by the time the category has happened and has become commonplace, it just feels like it’s been there all along kind of. It’s really interesting. I think there’s probably a whole psychological aspect to this that hasn’t even been mined in a way that it could.
Kathleen’s two questions
Kathleen: But all right, shifting gears because I could talk about category creation forever, but we don’t have forever. Inbound marketing. We talked about really what the podcast is about, and I love talking about category creation as part of it.
Because when you talked about consistency and HubSpot and Drift and Terminus, really they were all phenomenal examples of companies that really did inbound marketing well. So when you think about inbound marketing as it is today, is there a particular individual or company that you really think is killing it?
John: I’m going to say that it’s really like a style of inbound marketing that I think is starting to get a lot of attention and it’s this idea of having an evangelist be a voice for the company. And the reason I think this is so interesting is because, like our world is, there’s so many messages we get from brands today, both on the consumer side and on the B2B side, that I think people have a real… They started to see that you can have a brand say anything, right? It’s a construct.
But when you have a person who’s a real human being talking about the vision and the values and what their brand represents and how it might be able to help, to me, that’s a much more authentic way and it’s just very relevant in the world today because I feel like people just crave more human-to-human interaction.
So a three examples of that. We’ve mentioned a couple already, so Sangram and Terminus does that very well. Dave Gerhardt does that. He doesn’t have the title of evangelist, but he’s much more of the face of the company I think even than David Cancel or others. And then, Ethan Beute at BombBomb is doing that really well.
John: I know you had him on a previous episode, and yeah. I know there’s others out there, but those are the three that come to mind. I see their content very regularly. They all do a different job. They have their own styles. They have their own voice, but they’re very authentic. And I think they’re adding a lot of value for the respective companies through what they do.
Kathleen: I totally agree. Those are three great examples. And picking the right person or settling on the right person to fill that role is such a critical decision for the company. It has to be somebody that truly, deeply understands, as you said, the problem that the audience is experiencing, but that also can come across as charismatically and passionately believing in that shift that needs to occur to create that new category. So it’s an interesting mix of skills that you look for when you try to find your evangelist.
John: Right, right. So does this mean you’re going to step up and be the evangelist at Prevailion?
Kathleen: I don’t know. We actually… I’m really lucky. And one of the reasons I joined the company is that we have this amazing team of really smart people, who are also very invested in participating in marketing. So our CEO is unbelievable. He could sell ice to the Eskimos, not that he would.
That makes him sound like he’s a smarmy sales guy. He is so smart and he really has been in the market a long time and knows it, and he’s also incredibly well-spoken. So while I would love to get up and talk about it, I think I’m really lucky that I have an executive team that is full of people who could probably fill that role better than I could.
John: And you know what? I don’t think it’s entirely an either or situation. Some of those companies I’ve mentioned, they have someone who’s maybe has the largest following or the loudest voice, but there’s others on the team who can contribute to that. And I think that’s what’s really exciting, is it’s not just one person, but you can have a whole series of people on your team evangelize for the company.
And I don’t know about you, there’s something about when I just see the people behind a product that I’m thinking about using. I feel so much more comfortable having that conversation and and exploring what they do than I would if I was just reading pure brand messages.
Kathleen: Absolutely. It all comes down to trust, right? And if you feel like you can trust that person who is the chief spokesperson, somehow or another there’s a halo effect from that that shines down on the brand. And it really saturates the brand with that feeling of trustworthiness, that makes you want to buy from them.
John: Yeah, that’s right.
Kathleen: Yeah. I love it. Well, digital marketing is changing so quickly. This topic of category creation is so fascinating because conceptually it seems like something that will stand the test of time, but then how you implement it obviously will change over time. With everything changing so quickly, how do you personally stay up to date and stay educated on all things marketing-related?
John: Yeah. For me, both listening to and hosting podcasts has been a big driver of my growth. And so conversations like this one with you are really helpful because you and I could swap ideas. The episodes I’ve done…
So I co-host a series on the B2B Growth show around category creation. I also did a series on FlipMyFunnel. That’s given me the chance to talk to people who have done more category design work than I have and learn from them in the process.
And for me, that’s been so much more valuable than anything I could read or stumble across in a newsletter, not that those things aren’t valuable. But having one-to-one access to experts, there’s few things that are… I’m not sure if anything is going to beat that.
Some of those conversations have led to ongoing relationships, where I’ve been able to ask questions and dive deeper into other topics. And so that’s where I found the most valuable use of time, is just having conversations. I love to read, love to listen to podcasts, but anytime I could just talk to people and listen to them and then talk through my own ideas, man, I’d do that every day if I could.
Kathleen: Amen. I just filmed a LinkedIn video about this, about how I learn. And the number one way I learn is through hosting this podcast, which when I say that to people, I know that that’s not something that’s going to be feasible for everyone. Let me just spin up a podcast so that I can learn.
But it is the most amazing vehicle because you get to meet such incredible people like yourself, pick their brains, really get into detail that you can’t get into in other ways. And it’s amazing how much I take away from it. Second for me is I love to listen to Audible business books on 2X speed as I do my commute.
John: What are you listening to right now?
Kathleen: I am finishing Crossing the Chasm. And then before that, it was Play Bigger, From Impossible to Inevitable, and I come back. I’ll listen multiple times to books because I feel like you absorb more the second time.
Kathleen: So yeah, lots of good ones. There’s never too many books to read or never too few books, I should say. I always have more.
John: Right, no shortage of content, yeah.
How to connect with John
Kathleen: Thank you. That’s what I was trying to say. Well, if somebody has questions about category design and they want to reach out, learn more about what you’re doing, or ask you a question, what’s the best way for them to get in touch?
John: Sure. So you could email me at John@FlagandFrontier.com. So that’s J-O-H-N@FlagandFrontier.com. You can also just put in John.Marketing in your browser, and it’ll bring up a really simple page with just my contact info. Sometimes that’s easier to remember.
Kathleen: So smart. That’s great. I love that.
John: I can’t believe no one bought that domain, but it was there so why not?
John: It’s easier than spelling my last name. And then you can find me on LinkedIn as well. I won’t attempt to spell my name here, but if you want to link to it in your episode-
Kathleen: I’ll put that in the show notes, absolutely.
You know what to do next…
Kathleen: Great. Well, I have really enjoyed this. I’ve learned so much. I feel like I probably could have made this podcast three hours long, but nobody wants to listen for that long. If you’re listening and you liked what you heard or you learned something new, I would really appreciate it if you would take a minute, go to Apple podcasts, and leave the podcast a five-star review. That is how other people discover us, and that is how we get in front of a bigger audience. So take a minute and do that.
And if you know somebody else who’s doing kick-ass inbound marketing work, tweet me at WorkMommyWork because I would love to interview them.
Thank you so much, John. This has been fun.
John: Yeah, my pleasure, Kathleen. And hopefully, we can have another conversation later on as you go further into your own category design process.
Kathleen: Yes, about that and also about the minivan that you drove in high school.
John: All right, sounds good.
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