Category creation is a business strategy where a company defines, names, and educates the market on a brand-new solution class instead of competing for market share inside an existing industry. Rather than positioning against existing competitors, category creators introduce a new way of thinking about a problem and make the old approach feel outdated.
This guide covers when category creation makes sense, how to execute it step by step, and why most attempts fail.
What is Category Creation
Category creation is a business strategy where a company defines, names, and educates the market on a brand-new solution class instead of competing for market share inside an existing industry. The concept was popularized by the 2016 book Play Bigger by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney.
Instead of positioning against existing competitors, category creators introduce a new way of thinking about a problem. The goal is to make the old approach feel outdated.
Three elements typically come together when a new category emerges:
- Context: A shift in technology, regulation, or buyer behavior that changes the environment
- The missing gap: A problem that existing solutions fail to address
- Innovation: A novel product and point of view that reframes how customers think about the problem
When all three align, a company can define a market rather than fight for share in one.
Category Creation, Design, and Positioning
You will encounter all three terms used interchangeably, but they mean different things.
Positioning assumes a category already exists. You are choosing where to stand within it. Category design, on the other hand, is the work of building the category itself, including the name, the point of view, and the market education. Category creation is the result of that work.
Many founders conflate positioning with category creation. If you are comparing yourself to existing vendors, you are positioning. If you are teaching the market that a new problem exists, you are creating a category.
Why Category Creation Beats Competing on Features
When you compete on features, you accept the existing category’s rules. You inherit its pricing benchmarks, its buyer expectations, and its incumbent leaders.
Category creators set the rules instead. They define what matters, which means competitors have to play catch-up on their terms.
The Play Bigger authors argue that “category kings” (the companies that define and dominate a category) capture a disproportionate share of the economics. Beyond market share, category creation offers two practical advantages:
- Pricing power: You set the value framework. Buyers cannot easily compare you to alternatives because the alternatives are solving a different problem.
- Reduced feature wars: You are not evaluated on a checklist against incumbents. The conversation shifts from “which vendor has more features” to “do we believe in this new approach.”
When to Pursue Category Creation and When to Skip It
Pursue category creation when:
- A technology or market shift has created a genuinely new problem
- Existing categories force you into unfavorable comparisons
- You have the capital and patience for multi-year market education
Skip category creation when:
- An existing category accurately describes your solution
- You need near-term revenue and cannot wait for market adoption
- The “new problem” is a minor variation of an existing one
If an established category fits your product, competing within it is often faster and cheaper. Category creation makes sense when the existing categories actively hurt your ability to sell.
How To Create a New Market Category
Identify the core customer problem
Start with the problem, not your product. What pain does your customer have that existing solutions fail to address?
The problem has to be significant enough to justify a new category. A minor inconvenience does not warrant market education. Interview customers and document the language they use to describe their frustration. That language often becomes the foundation of your category name.
Reframe the problem with a point of view
This step is sometimes called “rejecting the premise.” You challenge the baseline assumptions of the current industry.
HubSpot did this when they argued that outbound marketing (cold calls, ads, interruptions) was dying. Their point of view: buyers now research online before talking to sales, so marketers should attract buyers with content rather than interrupt them. That reframe made the status quo feel broken.
Name and position the category
The category name is critical. It describes the outcome or new way of thinking, not your product.
Good category names are simple enough for customers, analysts, and press to repeat. “Inbound marketing,” “customer success,” and “conversational marketing” all describe an approach, not a vendor. Avoid names that only your company uses. If analysts and customers do not adopt the term, the category does not exist.
Target early adopters first
Do not try to convert the entire market at once. Focus on the segment that already feels the pain most acutely and is willing to try new approaches.
Early adopters become evangelists. They validate your point of view and provide case studies that help you reach the broader market later.
Recruit analysts and press as legitimizers
Analysts like Gartner and Forrester confer legitimacy on new categories. When they publish reports or create Magic Quadrants for your category, enterprise buyers take notice.
Brief analysts on your point of view, not just your product. Explain the market shift, the problem, and why existing categories do not address it. The same approach works with tech press.
Launch and evangelize the category
Category creation is ongoing, not a one-time launch. The CEO and marketing team spend time educating the market, not just selling product.
Invest in thought leadership, content, and community building. Explain why traditional approaches are broken. This work continues for years.
Category Creation Examples in B2B SaaS
Salesforce and CRM
Salesforce did not invent CRM. Siebel and others existed. But Salesforce created the “cloud CRM” and “no software” category.
The context was the internet enabling hosted software. The point of view was that on-premise software was expensive, slow to deploy, and broken. Salesforce made “no software” its rallying cry.
HubSpot and inbound marketing
HubSpot created the “inbound marketing” category in 2006 to contrast with outbound tactics.
The context was buyers researching online before talking to sales. The point of view was that interruption marketing was dying. HubSpot built an entire methodology, certification program, and community around the term.
Gainsight and customer success
Gainsight defined “customer success” as a category distinct from customer support.
The context was SaaS subscriptions requiring ongoing value delivery to prevent churn. The point of view was that support is reactive while customer success is proactive. Gainsight became synonymous with the category.
Why Category Creation Fails
- The name does not stick: Customers and analysts continue using old terminology. If only your company uses the category name, you have a tagline, not a category.
- Impatience: The company pivots to competing in an existing category before the new one matures. Category creation typically takes three to seven years.
- Insufficient differentiation: The “new” category is a rebranding of existing solutions. Buyers see through it.
- No external validation: Analysts and press do not recognize the category. Without third-party legitimacy, enterprise buyers remain skeptical.
- Capital exhaustion: Market education is expensive. Companies run out of runway before the market adopts.
How To Measure Category Creation Success
Leading indicators to track:
- Search volume: Is the category term being searched? Google Trends shows whether the term is gaining traction.
- Analyst coverage: Has Gartner, Forrester, or IDC published on the category?
- Press adoption: Are journalists using the category name without prompting?
- Competitor mimicry: Are competitors describing themselves using your category term? This is a sign the category is becoming real.
- Inbound language: Are prospects using the category term in their inquiries?
When competitors start using your terminology, you are winning.
How to Sustain and Defend Your Category as Category King
Creating a category is not enough. You have to defend it.
Continue investing in thought leadership even after the category is established. Expand the category definition as the market matures. Acquire or partner with adjacent players to strengthen your position.
Resist the temptation to chase adjacent categories before owning yours. Spreading focus too early lets competitors catch up.
Building Your Category Creation Playbook
Category creation is a multi-year commitment that requires alignment between the founder’s vision and the marketing team’s execution. The founder typically owns the point of view. The CMO operationalizes it through content, analyst relations, and campaigns.
Before pursuing category creation, assess whether your company is a candidate. Do you have a genuine market shift? A differentiated point of view? The capital for sustained market education?
