How B2B Software Vendors Create New Categories

Over the past few years I have spent a considerable amount of time studying the best practices of category leaders in the Software-as-a-Service market. I have been particularly focused on market leaders in the business applications space – in categories ranging from accounting and finance to sales and marketing. Examples include Coupa (procurement), Zuora (subscription billing), Anaplan (financial planning), Hubspot (inbound marketing), (sales) and Terminus (account-based marketing). In the research, I’ve identified a common set of best practices that category leaders with $1 billion plus valuations follow in the marketing, product, and customer success strategies.

Category leaders do much more than build a great product. They take a bigger picture view at disrupting the status quo.  The software vendors achieving unicorn status and the highest market share take a disruptive approach to four areas: 1) technology, 2) process, 3) people, and 4) metrics.

#1) Technology

Reinventing the Technology Platform – Category Leaders don’t want to just plug-in to the customer’s existing ecosystem. They want to displace the existing tech stack and replace with their own platform.

#2) Process

Reimagining Business Processes – Category leaders don’t want to incrementally improving the current business processes. They want to fundamentally reinvent the way the work is done.

#3) People

Redesigning the Org Chart – Category leaders don’t want to just get a lot of people trained on their technology. They want to create new job functions, new career paths and entirely new organizations.

#4) Metrics

Redefining Success – Category leaders don’t want to just help customers achieve their existing goals. They want to redefine their KPIs and what it means to be successful.

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