To understand the world, people need organizing principles. Categories do this for products. Categories give your prospective customers, your team, your investors, industry analysts, potential employees, and others a common way to understand where you fit. In every category, there is a well-known leader or category king. This player claims the majority of value in the category. If one considers the category “taxi alternatives” almost everyone immediately identifies Uber as the category king. How do you position your company as a category leader or king? What is your category strategy?
Speaker 1 (00:57):[Inaudible]
Speaker 2 (00:57):
Hi everybody from wherever you’re joining us in the world. Good morning. Good afternoon. Good evening. Welcome to this. Pandemic Punditry is a mini series marketing independent MC. We are thrilled to have Charles gold join us. He’s going to talk about creating a category leader, a very sort of relevant you know, area of marketing. And it also nicely dovetails with user experience that we talked about with Rick Mernissi last a week. So let’s, let’s let’s welcome, Charles. He’s a full time CMR. And he and I actually worked together 19 years, 19 years ago. We just discovered it’s been that long. And so I’m very excited to have Charles on board. He’s a expert product marketer. He is an advisor to CEOs and entrepreneurs. He’s done a lot of work in category marketing and branding.
Speaker 2 (01:53):
So he’s a complete package when it comes to marketing. And what is really fascinating about jaws is that he speaks on this subject a lot and he is very much a a business person’s marketer. So he understands, you know, this is not about the pretty pictures. It’s a lot about sort of positioning your product to, to, to take over the world. Right. And Charles has done that a few times. So, so we are really excited to have you Charles welcome depending on quantity, Charles, I’d like to be here. Thank you for having me. So, and sort of a little bit of a context setting for, for our listeners and they, they have a wide range of people joining us, usually from all across the world, some of whom, you know, may or may not know much about marketing. So, but, you know, just, and then suddenly may not be as well versed as you are about category marketing in particular. So if you could just, you know, maybe take a few seconds or minutes and, and paint a picture of what exactly is category marketing. That will be very helpful, I think. Yeah. So, so I mean, just to, to boil it down, a category is a way of understanding the world. So the way the human mind works, you know, when you see a thing,
Speaker 3 (03:00):
You try to put it in a bucket so you can understand what it belongs to. That’s what a category is. So when, when we talk about category marketing, we talk about where you fit in the world to help your customers, your prospect, your partners, your employees, your board, understand how to think about you. So the, the, the, the interesting thing about category marketing is deciding where it is that you want to fit. Bearing in mind that the category is often in the customer’s mind, right? It’s the way the world thinks about thinks about what you do, and then figuring out how you’re going to stand out within the category. And that’s really all the category marketing is.
Speaker 2 (03:46):
Okay. So, so this would be, I mean, I guess given the, sort of the profusion of most of these new technologies and the fact that, you know, marketing today, you know, on the demand with digital marketing, there’s a lot of noise out there everybody’s, you know, claiming to be various things. Can we do various things? The chatter is at an all time high. So it is category marketing, marketing a way to sort of, you know, distinguish or give meaning to who you are and where you actually should be playing it. I mean, I mean, I know it’s more than that, but, but it is,
Speaker 3 (04:22):
It’s fundamental to the success of literally everything else you do in marketing. So from, you know, there’s, there’s always a marketing circuit. There’s always a lot of talk about the latest marketing channel or how to get more out of Twitter or how to improve your search results or conversion rate optimization, or how to get better PR or all of this stuff. But all of those, all of those channels are ways to get a message out unless, and until you really understand who you are and how you’re going to stand out, none of that stuff has context, and you can spend a ton of money getting really poor results unless you’ve got, you know, who you are, how you’re different, the problems you solve all baked in. That’s why this is so critical upfront. You know, a lot of times when I talk to startups, CEOs, and founders, particularly no offense, anybody on the calls, tactical founders, they want to get right to, but how are we going to get to the top of Google? Or, you know, how are we going to do advertising? I want to spend money on Facebook ads or LinkedIn ads or whatever it is. And I would say, you know, let’s pause from let’s, let’s do a little bit of identity check. Who are we? What are we doing here? How are we going to separate ourselves? What’s our message. Then let’s go spend some money, right? Because that’s when that money is going to turn from an expense to an investment.
Speaker 2 (05:49):
So what you’re saying, you know, things like Twitter, Facebook, all, those are a means to an end, right? So, but the, the, the, the first thing to figure out is you, what are you, who are you, and who are, who is the customers that you’re targeting? Why are you so important to them? What are the problems you’re solving? You know, these fundamentals at some point, right? Is that what we’re talking about here
Speaker 3 (06:09):
To me? Hey, I’ve got this new company. I want to buy a billboard, I would say to you, cool lobby. That’s awesome. What are we going to put on that billboard? Where are we going to put the billboard? Right. you know, who are we trying to reach? Because until you figure that stuff out, you know, you’ve kind of got a E I mean, maybe it’ll work, but I’d rather be certain, or at least more certain sure. Before you start spending money on demand generation or awareness activities,
Speaker 2 (06:43):
But, okay. So one of the questions, I mean, we had, you know, the discussion is that, you know, you know, a category leader really well, right. I mean, because if you say alternative, you know, taxis, you know, Uber is the person, right. Airbnb, these are all sort of category leaders in their, in their domain space. Right. and I, you know, one of the most interesting things in this book that you recommended that we read, reread the bigger ones that, you know, some of the biggest companies out there actually started in the worst of economic times, which is what sort of via in right now. Right. So that’s why I thought this would be a very useful conversation given the reality of where we are with this pandemic. Right. So for example, I think you know, Google was, was right after the, you know, the early two thousands when Google started was right after the.com crash.
Speaker 2 (07:29):
Right then Airbnb was in 2008 when the middle of the, you know, the financial meltdown. Right. So Airbnb started then you know, who would have been thinking that people would even travel in, in 2008 when everything was imploding? Right. similarly I think even the very first sort of example that they use in play bigger was this whole, you know, the bird’s eye and that the company, birds eye frozen food that started in the middle of the great depression. Right. So is there a connection between, or is in this particular time that we find ourselves in, is category marketing a lot more important? I mean, it’s always important, but is it even more important now?
Speaker 3 (08:11):
Yeah, I think it is. And I think there’s two big reasons for that. One of them is strategic and the other one is tactical from a strategic perspective. Look, we’re living in a really weird time. Like nobody knows exactly what’s going to happen, but it would be a really good bet that new categories and new category Kings are going to emerge out of this new needs that we didn’t think we were going to have either from a B2B or a, B to C standpoint are going to emerge. And the category Kings are going to dominate. Those categories are going to emerge. So strategically you know, it’s very important for us as entrepreneurs to be thinking about, you know, where, where are we gonna land a year from now? Where are we going to land two years from now, whenever we come out of this.
Speaker 3 (09:02):
And what’s that going to look like? What new needs will live emerged, right. And choosing how you position your technology or whatever it is you’re offering to take advantage of the market trends and to fulfill a need incredibly important strategically right now. I mean, categories, category, design category strategy is always important, particularly important in a market that’s fluid right now, I would say basically, all markets are fluid globally, which is something that gee, I hope we never see again. Right. but that’s, that’s, what’s going on that tactically it’s important because resources are constrained, right. So, you know, very few organizations have fat marketing budgets right now. And so being, you know, having an arrow that you can shoot and, you know, really precisely at the target is even more important. Right. So, you know, having understanding who you are, who you serve, how you’re different becomes extremely important because you can’t, you can’t afford your waste. Right.
Speaker 2 (10:13):
Right. And so, so how would okay, so let’s, let’s sort of ask a lot of sort of a philosophical question maybe, or a conceptual question, any, okay. So you have a finite amount of categories I’m assuming, correct me if I’m wrong. And then how could, you know companies, let’s say you’re a startup, you’re having a, you’re doing sort of a Greenfield, then yes. I can see somebody saying, okay, here’s how I’m going to go, you know change the world. But if you’re an existing business, you know, be struggling for a couple of years, you’re looking to set up, you know, pivot to do something different. I mean, can, can those companies also sort of remake themselves and position themselves in, in a new category? I mean, is this something that anybody can do or is it just limited to certain companies, certain criteria? I mean, I think
Speaker 3 (11:02):
You can do it. It really starts with three things, right. And like, forget about fancy marketing terms, like category design. There’s three things that you need to know about. Right. You need to know what problems you’re solving. And I don’t mean world hunger. I mean, like super concretely, what is the thing that somebody is struggling with, that you’re going to help them with. Right. The second thing you need to understand is how you were different, how your approach to solving the problem is different. Okay. And the third thing that you’d understand is what the competitors are offering, right? So, and competitors might be like another widget, like your widget, or it might be doing nothing, or it might be solving a problem manually. I mean, there’s lots of different ways. So rather than competitors, in terms of another company, think about what is the customer’s alternative.
Speaker 3 (12:02):
Always be thinking outside, in think about like what the customer’s mindset is, how they, when they wake up in the morning, they’re not like, Hey man, I got to buy me some more technology. They wake up to this day, I got a problem. Right. How am I going to solve that? You know, my budget’s been caught. I laid off a bunch of people like, you know, how am I going to solve this problem? That’s what they’re thinking about. Put yourself in that mindset. Right. So if you do that and you really have a good understanding, then you can think, then you can start thinking about categories and you can say, you know, what’s, what are the existing categories that are out there around what I do? And then, then you can say, well, is there, do I just, am I just another one of the vendors in that category?
Speaker 3 (12:51):
And if that’s the case, then maybe it’s time to be a little bit, a little bit worried. Right. But if you’ve got something that’s different, you can start thinking about, is there a way for me to resegment this category right. And say, okay, well there’s three ways to solve the problem. And within each of the three ways that a few different vendors and in this one sub segment, we’re the best because we solved the problem this way in the best way possible that saves you money, you know, allows you to go faster, does stuff you couldn’t do before, whatever the setup properties are. Right. So that’s one way to think about it. Is, is there an existing category that you can resegment the other way to think about it is you know, is there a new category that needs to get created?
Speaker 3 (13:40):
Like, you know, you mentioned Uber and Lyft and all that stuff before. Right? So, so that was a new category. I mean, they could have resegmented taxis and say, I have a better way to be taxis, or would they say there’s no, there’s like this other thing that’s going to emerge. And the, the play bigger book talks a lot about creating new categories. That can be really expensive. So I have a little bit of a difference with the authors that, you know, they sort of think you should always be creating a new category for me. I think if there’s an existing category that you can play in and resegment, that’s oftentimes more, more cost effective and more efficient, unless what you’re doing is truly novel. I’m like, would whatever ever do? Well, one other caution that I will say for anybody on the call is please never say, we’re the only people who do what we do. A market of one is not a market and you will wind up very sad. Right. So figure out where the market might not be other vendors, the market might be other alternatives, right? Like, so, you know, Uber, didn’t say, we’re the only one to do what they do. We say, they said, look, there’s a lot of ways that people need to get around the city. They can do taxis. They can walk, they can run a bike. Right. We, you know, we have a new way of solving the problem. Right.
Speaker 2 (15:01):
Right. So, so it doesn’t necessarily mean that you look, you might be the only player that sort of thought of it approaching it in a particular way, but that doesn’t mean the customer, if you look outside in the customer may have other options. So that, that is part of your competitive sphere sphere, as well as the fact that you’re not the only solution. Right. So your solution
Speaker 3 (15:22):
Open the aperture enough to be able to see the way the world looks at it. A lot of technology entrepreneurs, particularly tech, technical folks, you know, they’re so fascinated with their feature or the way that they’ve built, the technology that they think is super exciting. I’m here to tell you the customer does not care at all.
Speaker 2 (15:49):
Speaker 3 (15:52):
One or two of them do, but the broad market does not care. They care about their problems and how you’re going to solve them.
Speaker 2 (16:00):
Right. So the so the I think that the, another sort of sort of giveaway ahead is, you know, there seem to be a link between sort of user experience design which was, you know, sort of a heart in the two thousands and, and continues to be a, and then category designed, right. I mean, they seem to be intertwined or, or an off shore or an off ramp. Can you just touch a little bit of that because we had a speaker earlier this week, talk about user experience design and the value of that. Are there linkages between the two or do you see links?
Speaker 3 (16:34):
I mean, the main linkages I see are you know, category designed like the, the, the, the, the, the Venn diagram that connects this in the middle probably is brand, right? So the brand is the, your brand is the way the world sees you. Right. the category is a way to sort of define your brand a big part of the way a brand becomes experienced and becomes a real, tangible thing. Not some PowerPoint slot is the customer’s experience with it. Now, if it’s a technology product, it might be, you know, how they do a free trial. If it, it, it could just be your website or the way they experience your message. It could be your BDRs, your, a business development rep. When they’re calling in to accounts, how do they tell the story? It could be your customer service organization or your customer success organization when someone has a problem, or they’re trying to figure something out.
Speaker 3 (17:36):
All of that experience is what makes the brand tangible, right? Like when people think brand locked down, like marketers, like want to think about brand as being colors and fonts and that kind of thing, but, but a brand is experiential. And if you think about the brands you love or the brands you prefer, if you don’t love any brands, a lot of that has to do with the experience you have when you encounter them the logo and the colors and all that kind of stuff that just reinforces it makes it memorable,
Speaker 2 (18:14):
Touched on a very good point, which was this whole, even the BDRs, right? Even the salespeople and the customer support people enhance your brand, right? I mean, the way you experience your brand, as you said, experiential brand and brand is an experiential exercise then. Yeah. It makes sense that all of those things sort of woven together and are projecting the same message, right? So I think some people, I think in tech, especially in the companies I work with, they put a lot of effort on the look and feel of their website and the collateral. But if somebody ever calls them up it’s disaster, right? There’s nobody to pick the phone up. The followup is terrible. Like the, everything that follows is a, is a terrible exercise. So you can project something to the world, but if you don’t back it up with concrete, and I think this is where, you know, there’s, you know, this whole idea of, if you’re doing a category, that’s not saying you’re in this category, but the whole company design has to be there. It backs it up. You got to have buy in. You got to have people focused on that. I think all of that makes sense, right? I mean, this is a holistic exercise. This is not a, this is not a putting a lipstick on a pig exercise.
Speaker 3 (19:22):
So, so that’s, that’s a really important point. And I’m really glad you raised it. Category design is not a marketing thing. It’s often led by, you know, a person like me, whose job has marketing in their title, because it’s our job to think about the market. Right, right. It’s done marketing without market. But it’s a company thing, right? So the product needs to align, right? The brand experience from how sales tells the story needs to align. When you’re CEO is asked in a media article, what do you do? Right. They need to describe it in that same way. Otherwise you wind up, you know, there’s only so much a company only has so much kinetic energy to spend, right. And if all that energy is spent going in one direction, you get great results. If that energy is stent going back and forth here and there and Yon at the end of the day, you will have spent a lot of energy, but you want to make nearly as much progress.
Speaker 2 (20:26):
Right. Because you’re everywhere. I mean, they are trying to figure out, you know, a single momentum and not everywhere be everywhere.
Speaker 3 (20:34):
Right. That’s right. That’s totally right. So I’m, I’m glad you raised it is a company exercise. And so when I’ve done category design for organizations, it’s been an exercise that I’ve done with the executive team. So a lot of times, you know, I would bring to, to the party, a set of slides, a set of analysis, a set of recommendations, but it’s a lot of hard work of discussion amongst the key stakeholders. And then once you’re aligned how you roll that out to the whole organization. So everybody is telling the same story, but I’ve got the, I’ve been monopolizing the time I know you have
Speaker 4 (21:12):
Speaker 3 (21:14):
19 year gap in communication, catch up,
Speaker 4 (21:20):
You guys caught up, I’ll get my chance to talk. One of the things we see a lot on LinkedIn with people with CVS and everything, where everybody claims to be a growth hacker, et cetera. Right. But I believe there was an HBR article early on probably 10 years ago, where Eddie, who he wrote an article saying that category creation is the ultimate growth strategy. I mean, and from everything you’ve said so far, it sounds like you would
Speaker 3 (21:46):
That’s right. I completely agree with that. Right. So the growth hacker thing is one of those things that always makes my head want to explode. Right. Because it’s all good. Like all those tactics are good, but they’re only good as far as you know who you are, who you’re serving, what their alternatives are and why you’re different. It all goes back to that. And then all of a sudden, all of that growth hacky kind of stuff has context, right? Without context, it might work. Maybe, probably not the baby I’d rather have like dumb, do the hard work to kind of figure it out and have that message drive the demand generation activities. And the, and then then growth hacking has context and it can work. So category is really context in some sense, Oh, totally the, yeah, that’s right. You said that much more articulately than I do. I’m very good at that.
Speaker 4 (22:59):
Let’s take Netflix as an example. Right. So obviously Netflix created a category in streaming media and they owned it. But part of the morning that was, they were brave enough to sort of cannibalize their own business in, in a sense. So why do brands lack the courage to create and design their own market category? Why, why are not more brands doing that?
Speaker 3 (23:22):
It’s scary. Right? Like what they did was really like, you know, I it’s it’s, you know, it’s the, it’s the innovator’s dilemma really. Right. so if you’ve been doing a thing for a long time and a certain way, and it’s worked out pretty good for ya, it’s hard to say, you know what, we’re going to do something it’s even harder to say, we’re going to do something different that might eat the lunch. The thing that I’ve been doing for a long time. Right. you know, it’s hard to say, we read the stories about Netflix. Cause you, you know, you read the sort of backward looking chronologies and while it was always going to be about streaming, we just had to do this DVD thing along the way. Maybe,
Speaker 4 (24:07):
Speaker 3 (24:09):
He gets told by the winners. So, you know,
Speaker 4 (24:11):
Let me ask you a question. If you were in that Netflix critical meeting where they decided to let’s say cannibalize their own business, would you have voted? Yes.
Speaker 3 (24:22):
I would like to think that I would have. And, and the reason why the Netflix one is a, is a, is a PR is a, maybe an easy example from the standpoint that if the technologies were going to come, right, someone was going to eat their lunch. It might as well have been them. I mean, you can, you can use the counter example, the obvious counter example, which is blockbuster. I recently read that there is one remaining and it’s an Alaska. Yes, yes. I didn’t read the same thing. So why? Because they were, they were afraid to eat their lunch. The other reason why some companies don’t do it is depending on their relationship with their investors, whether it be public investors, that’s the bigger problem or private investors, you know, if you got quarterly results to live up to, you got to have even more courage to say we’re really going to do something very different.
Speaker 3 (25:23):
Right. And I don’t remember, but I suspect blockbuster was public at that time. Right. I mean, Eastman Kodak is one example. Right. I mean, they never caught onto the digital revolution. So, you know, somebody else ate their lunch. Right. I mean, that’s right. I mean, there’s so many companies that you could use to sort of make these arguments of companies that haven’t actually created the category and gone for it. Right. So is this, is this something that companies should always be doing? I mean, even let’s say company’s been around for four or five years, should they do like a rain check on, on their category? I mean, on a frequent basis, are we still in that category? Should we, you know, are we are the assumptions that we made when we started the journey? The same as we are now? I mean, is this something that companies should do like a health check?
Speaker 3 (26:08):
Yeah. I mean, for me, it’s not that they should do it every four or five years. You should always be doing it. You should have the monitoring, the evolution of the category. It’s a continuous process. Right. because particularly I’m looking at a tech guy. So like, I, that’s, what I understand the tech landscape is always evolving. New players are coming in, new approaches are coming in. And so, you know, being able to really evaluate where you stand and, and adjust accordingly is extremely important. But you know, companies do start going to evolve. I, you know, I can, I often have with people that are like, well, yeah, but what if this doesn’t pan out? And you know, what, if this isn’t a real change in the market, you know, important to important to understand that, that there will always be naysayers and that, you know, taking the, the, the, the winning argument is always the one that comes from outside end.
Speaker 4 (27:06):
Oh yeah. I have a couple of followup questions. One obviously is when you talked about the winning argument, given that it’s marketing’s role to find the market, is it marketing’s job to make the winning argument?
Speaker 3 (27:23):
It’s marketing’s job to, it’s a great question. And the way I would answer it is I’m pausing. Cause I want to answer, I want to be very precise in the way I answer this. It’s marketing’s job to surface the information and make a recommendation that the executive team, and if appropriate, the board can buy off, it’s not marketing’s job to always have the answer it’s marketing’s job to get to the answer. Right. So, you know, it it’s oftentimes I find myself in the sort of consulting job of being the process facilitator where like, I, you know, I’m just trying to surface the data and drive the process to a conclusion. Obviously I’ve gotten the opinion, but my opinion alone isn’t enough to carry the day on something as important as what category you’re in. Right. I need the buy in of my CDL. I need the buy in of my head of sales. I need to buy in other key stakeholders and I may need to buy it on the board if we’re going to make, if we’re going to take a really big swing. Yeah.
Speaker 4 (28:32):
Yeah. So that actually leads me to a really nice follow up question is that, and you touched on investors before also, how can you get the investors on board with something like a new category design?
Speaker 3 (28:43):
So it really has to start, it has to, with most invested, it begins and ends with the data, right? So if you can present to them the opportunity and frame it up in the right way. And by the right way, that means having the data behind it, being able to make some reasonable projections about what it will mean for you financially. Being very clear on about what the investment is going to be in order to, you know, resegment a category or build a new category or whatever it is you’re wanting to do. That’s the best way to do it if it, if it if it’s anything, but data-driven, the conversation can go any, which way. Right. So okay. So the question would become for me that comes to mind is, I mean, from a tech company standpoint,
Speaker 2 (29:42):
Some of this stuff seems really straightforward. In fact, maybe because you and I both have a tech bias, right. But if you’re an FMCG company or a restaurant chain or a hotel, a garment manufacturer, right. A fashion house, blah, blah, blah, is category leadership still relevant?
Speaker 3 (30:00):
I believe it is. So in that play bigger book, I feel like I’m Schilling for that book. But on that one, one of the things that they frame up in there is that 80% of the market capitalization in any given category goes to the category cake. Yes. 80%. So if the market is worth a billion dollars, 800 million of that capitalization goes to the leader in that category. Everybody else has to split up that 20%. So you tell me where you want to be. Right. And that goes in just about any category you can imagine. So, so yeah, I do think it’s important if you’re outside of tech again, tech is my world, but it seems pretty obvious that the category, like, you know, that a Starbucks is worth more than a pizza.
Speaker 2 (30:55):
Right, right, right. So I think so you could, you could narrowly define your category, right. It could be a very niche category. So is, is there a relationship between this concept of niche marketing and category marketing? Are they sort of in tension with each other or are they complimenting each other? I think they’re complimentary, but when I think about a niche,
Speaker 3 (31:18):
I do. And again, my, my bias is always to think outside of them. When I think about a niche, I think about a segment of customers that are served in a particular way. Right. so it, it, for me, that concept is, is plays very well with the category. And by the way, category doesn’t need to be huge. A category doesn’t need to be in our coffee houses or something. Right. It can be very small and you can still make a ton of money. In fact, you know, they say there’s riches and niches. There are,
Speaker 2 (31:55):
That’s why I was asking the question. So there is, which has yet,
Speaker 3 (31:58):
Right. Yeah, absolutely. Absolutely. Find it under served market and serve them better than whoever’s doing a crummy job.
Speaker 2 (32:07):
So, so really, I mean, if, if I was sort of maybe summarize all of the wisdom that you’re, you’re bringing forth and in the insights that you’re sharing, it’s a lot about, sorry, using the category sort of to define who you are, you know, your identity, right. What are you, who are you serving, you know, outside in, you know, what, what is the customer looking for and how are you presenting that in the best possible way. Right. And then essentially, you know, getting all of your company aligned or across that category, right? So you are
Speaker 3 (32:40):
Aiming to be the category King. I mean, we can talk about how big or small that that buy is, but, but as you were saying, you could, it can be big. It can be very small and it can be very niche, but you are going to dominate. I gave the dominate that parameter, you want 80% of it. Right. That’s the other thing that goes along with that is that when you are the category King, you also have, depending on how you want to frame it up, monopoly, power pricing, power, right. Which means that your margins are better. And if your margins are better, you have more money that you can reinvest. And if you can make more money, you can reinvest, you can pull further ahead or you can choose other categories that you want to dominate. So this is a flywheel, right? If you’re the category King, you can charge more, which gives you more money to reinvest. Correct?
Speaker 4 (33:35):
Yeah. I have a question. So obviously we’re all talking about the flavor of the book and obviously Christopher, you’re up here, this one of the, you know, writers of the book. And I think recently in one of his podcasts, he’d said in a pandemic, some people compete in existing market categories, but legends create the role. Are you seeing any legendary marketing right now?
Speaker 3 (33:58):
Would it be sad if I said I’m not?
Speaker 4 (34:01):
Yeah, that would be really sad.
Speaker 3 (34:03):
No. I mean, I just, to be completely honest, two things, one I’m like pretty much in my own little world and I’m pretty focused on, on, on building a category King of our own. But, but secondly I think we’re, I think it’s early on, I think it’s really early on I have talked to some companies that are doing some very interesting things that are taking in taking advantage of the wrong word that are seeing emerging trends that are caused by the pandemic that are building product and business models that will serve them well. But it’s so early to say that it’s legendary. I don’t know. Ask me again.
Speaker 4 (34:49):
Okay. I have a followup question. You said, you mentioned you’re busy building a category King of the road, right. Can you kind of walk us through a process of how you building that category King?
Speaker 3 (35:02):
Sure. So so I work for a network security automation company. There’s a number of other companies that are in our category. We are in the process of resegmenting that category to focus much more on where we see the market going. So we see the market going much more towards agile and cloud. And so we’re positioning ourselves as being the only agile company in our, in our medic category. We believe that got the functionality and the capabilities to deliver on that category King kind of promise. And so we’re pushing very hard in that direction. And so we’re early, early in that, early in that journey. But really optimistic about where that goes. I just wanted to quickly clarify a point you made earlier, you said to say only is not something you should do, but in this case, the category thing is sort of only either is that you can, I just want to make sure there was no contradiction in what you’ve gave. So, so if, if you’re, if you’re saying you were the only one who solves a problem, then it might not actually be a problem. If you’re saying the only, you’re the only one who solves a problem in a particular way, you’re the category King, it, it, or you can be
Speaker 4 (36:33):
Got it. Okay. So we’re all tech people. So, and we’ve talked a bit about some of the older examples, but one of the newer examples that people obviously caught is how HubSpot build the inbound category challenge. Do you have any thoughts on that?
Speaker 3 (36:48):
It was brilliant, right. I thought part of what they did that was brilliant was in the way that they executed on the strategy. So by, you know, sort of framing up that, that they were the Kings of inbound and then building a bunch of content that drove people inbound. They’re both, it’s both self-referential and self-reinforcing as well as they allowed themselves to educate people on what it meant to be an inbound marketer to get inbound marketing certified, to get all this stuff right. To where they became synonymous. With that, with that category right there. I agree with that.
Speaker 4 (37:42):
Moving out of tech a little bit, let’s talk about Elon Musk. So he’s obviously, you know, build category several times over, what is it about him that allows him to go do that?
Speaker 3 (37:55):
I mean, well, I certainly there’s some personality elements there. You know, I, I mean, I, I think he, he is a guy who he has a lot of vision, right. And he’s able to sort of see the, the resonant themes that are gonna matter to people. And then to drive really, really hard internally with his teams to do things that are different. And then frankly, it’d be flamboyant you know, in the market and to be bold and some of his claims, which by the way, have a double
Speaker 2 (38:36):
Edged sword sometimes for him, you know? And so, so, you know, you get, you do get some brand value from a founder or a CEO who’s willing to be, you know, kind of that out there very much like Mark Benioff of Salesforce. Right. I mean, he was also constantly out there, right. I mean, pushing his brand and his vision. That’s right. That’s right.
Speaker 4 (39:04):
That’s really interesting for me, because I think it’s something that I would consider lobbying. You should chime in here. We said, so there is specific leadership traits. It sounds like, you know, CEO or a founder that is required to fundamentally then, or ultimately end up becoming for that company to become a category King.
Speaker 2 (39:28):
Sorry, I didn’t mean to cut you off. I was going to sort of give a contract counter point to that one with the VM-ware example. Right. So they sort of stumbled on this whole virtualization. They had no idea. Right. I never, there were scientists in some sense, right. Techies. And then, then it’s suddenly sort of the light bulb started to go off. As people started to download a free version that Whoa, we may have a business. Right. So, you know, sometimes you have a visionary saying, Hey, we’re going to go to Mars. Right. And then some things, people sort of come up with something and they don’t even know that till sort of, you know, a light shines on them. And they’re also examples of people who come up with stuff that could be a category leader, but they don’t spend the time to do the category design.
Speaker 2 (40:09):
Right. And then it ends out to be nothing. Right. I guess what I would say is it’s a, not a necessary condition to have a CEO or a leader at the top, like that it can be an accelerant. It can help. But I don’t necessarily think that’s required. Yeah. Okay. So maybe there’s only a limited number of Steve jobs. Is it on Musk around or anything you could have bluster without substance, right. That, that, isn’t always helpful. So Charles, in the last sort of three, four, five minutes we have left if, if you were a sort of a startup anywhere in the world and they’re sort of, you know, ringing their hands going, Oh my God, what do we make sense of this new world? You know, everything seems to be not bended. And you know, how can I become a category leader because I’m, I’m basically trying to keep my head above water.
Speaker 2 (41:04):
Yeah, I think I have a good idea. I mean, should start up sort of in its early days, sort of figure out what category they are and say, Hey, look this, you know, when you do all the work in category design and you find out that, wow, actually I thought I was unique, but I’m not then should they pivot pick up or find another niche for them to go and do something? I mean, is there a point of reckoning for them? It’s like, I wouldn’t want to be prescriptive. Right. So I think it’s, it’s very situational.
Speaker 3 (41:35):
But what I would encourage leaders now, and frankly, always to do is, you know, take a breath, take a walk, put on your mask if you’re going outside, but take a walk. Right. and think about it and really think about the market you’re in and think about what assumptions you hold that might be, you might want to question think about what customers or prospects or partners or whatever that you can use to sanity check. But you know, that’s that’s an ongoing process that, you know, it, a lot of times I meet founders who were very dug in and they’re very confident about what it is they’re trying to do. And I’d say that the one, this is the entrepreneurs that I’ve been as I’ve seen, be most successful are the ones that are not dug yet, but the ones that are open and always questioning and really trying to really understand and then tack their plans. Accordingly, that’s not saying you need a strategy of the day, but it is saying like be open and take some time and get away from your computer or whatever you’re doing and go for a walk, meditate, whatever it is a thing you do to like clear your head, you’ll be better. You’ll be a lot better
Speaker 2 (42:57):
And, and really takes six to 10 years. Right. I mean, for this whole thing to sort of happen, it’s not going to happen overnight. Right. I mean, it’s not none of none or very few things in businesses overnight. Right. So, I mean, this is something that you do, you, you know, work hard, execute, and then, then you become a category leader. It’s not something that you sort of
Speaker 3 (43:15):
No, the most overnight successes take 10 to 20 years.
Speaker 4 (43:20):
That’s why they said zoom is a nine year old overnight success.
Speaker 3 (43:25):
That’s right. The conditions needed to be perfectly. Right. And when they work, man.
Speaker 4 (43:30):
Yeah. So just to touch on one other point, Charles, which obviously we haven’t touched on at all, at least even in the playbook, the book where they talk about obtaining the marketing sites, they say like, it’s kind of an intersection of your person’s knowledge, passion, and a little bit of serendipity, right.
Speaker 3 (43:49):
A little bit with serendipity. Yeah. A hundred percent luck is a thing, but if you’re open minded and can see the possibilities even at a time like today where there’s obstacles all around, there’s new paths to be had. But if you’re, if your mind isn’t open and you’re not looking and asking the questions, somebody else going to grab them a hundred percent,
Speaker 2 (44:16):
Right. I mean, it’s, it’s that whole poker analogy, right? Everybody’s dealt a hand and at that point, your luck is equal. I mean, some people may get a good hand. Some people won’t get a a very bad hand, but it’s how you play the hand. That really matters. I mean, how you essentially play the odds and if you improve your odds to good category design and good sort of business sense, then then you know, you win more often than you would lose
Speaker 3 (44:45):
That, that, that would be my take a hundred percent.
Speaker 4 (44:49):
Just a final question from me. He said, I learned reading somewhere that the category designers take advantage of existing cognitive biases. Do you agree with that?
Speaker 3 (45:01):
Yeah. Yes, absolutely. Like, you know, a large part, like brand positioning category design, like we tend to like our, our, we tend to think of that as something that we do, I’m going to brand this, but the brand or the position exists in the prospect’s mind. It’s how they see the world. That’s why this listening and being openminded and asking questions and talking to people is so important because if you can uncover what people’s biases are, and I don’t mean bias a negatives, any bias in a, you know, people tend to think this way. Then you can position into that. And, and capitalize on the way people already think today, changing people’s minds hard. I like to say that, you know, most things aren’t sold they’re bought, right. And if you’re buying something, you’re buying it because of the way you’re thinking. Not because, you know, somebody is hammering you with emails or giving you a talk track. Right.
Speaker 2 (46:14):
I always said that, you know, salespeople should rebrand re categorize or retitle themselves as bio facility.
Speaker 3 (46:21):
That’s right. I couldn’t, I literally just had that conversation with our sales organization yesterday. Right.
Speaker 2 (46:28):
Because I’ve done a LinkedIn article. You can, you can share, send, send from my LinkedIn to them. So it’s all in there. But so what, what, what do you say to people who, you know, use this Apple analogy all the time that, you know, the customer does not know what they want, we’re going to tell them sort of thing. Right. when Steve jobs is us. So, I mean, because you just mentioned something that was, you know, you know, listening to the customer, and then the question is they’re like, well, they don’t like, you know, I think Ford was another person, right. If I asked them what, what they would want, that they received more horses. Right. Instead of the model T right. So, I mean, how do you sort of bridge those two? You know,
Speaker 3 (47:04):
Well, I mean, the first thing I’d say to you is there’s not that many Steve jobs and your N and no offense sent me on the call, but you’re probably not the next Steve jobs. Secondly, you know, what, what Henry Ford said is that propel, right. What they want to do is get places faster. Right. And he gave them a way to do that. Right. Right. And so listening to them means understanding what their need is. Not necessarily listening to the way they want to.
Speaker 4 (47:38):
Speaker 3 (47:41):
Yeah. I mean, look, if you think about Uber, like everyone thinks taxi suck, nobody likes taxes. Right. Right. Like, I, I don’t know. I wasn’t there, but I can’t imagine that they were thinking, well, let me just create a different taxi. They said, what’s a better way to get people around. And they figured out this two sided marketplace type. Yeah. Great. Got to go. I’ll meet you. You’re done with your questions as well.
Speaker 4 (48:06):
No, I actually have another question, which sort of counteracts what Charles said. I believe John Rizzo of flags and frontier, he said in a recent podcast that if you are creating a new category, you have three choices. One is to try and fit your product within an existing category. And the second was, he said, ignore the category. You’re marketing to your marketing in and focus on the products, features and benefits or three create a new category. And then John went on to say, option one and two don’t work. What are your views? I think he’s wrong.
Speaker 3 (48:45):
I think he’s wrong. It, you know, I don’t think the only alternative for you out there is to create a new category. You can just think,
Speaker 4 (48:54):
Let me segment
Speaker 3 (48:55):
That’s right. I agree with Charles on a hundred percent on that. And they, by the way, like if you’ve got an unlimited marketing budget, which I don’t think exists, but if you’ve got one, maybe you can create a whole new category, but it gets very expensive and the probability of success goes down. Yeah. Agreed. Okay. Charles, I think we are sort of at the end of your time, probably a little bit, a few minutes extra you know, it’s been an absolutely fascinating discussion. I mean, I, I, I think the three of us could go for a lot longer, but I’m cognizant of your time and everyone else’s as well. So thank you for joining us today was being an absolutely fascinating discussion. And so, I mean thank you for taking the time to sort of eliminate us about a very, sort of a very relevant topic, especially in the middle of a pandemic, which is a category marketing. And then the the, all of the wisdom that you’ve passed on is completely applicable. I believe to all of our listeners. [inaudible]
Speaker 4 (49:58):
No, just wanted to whisk Charles all the best while he’s building his own category of games. Yeah.
Speaker 3 (50:04):
Thank you very much. Look, I I appreciate you guys allow me the opportunity. I enjoyed the conversation and hope everybody out there found it valuable.
Speaker 4 (50:13):
Thank you. Thanks again.
Speaker 1 (50:27):[Inaudible].