It always surprises me that category creation isn’t better understood and more enthusiastically embraced by business leaders. Over the years, I’ve heard plenty of executives, board members, and marketeers say, “Oh, Keith, you can’t create a new category – it’s too hard, no one will believe you.” But I’ve had the privilege of being a part of four great teams at four great companies — GMF Robotics, Rasna, Ariba and DocuSign. At every company, category creation was a key to our success.
So what is it? Category creation is a very powerful business strategy that enables you to establish market leadership, de-position your competition, and deliver unprecedented customer value. The beauty of creating a new category is that you’re automatically the leader. And being the leader brings tremendous advantages. It dramatically increases your ability to partner, to attract great talent, draw investment, and build competitive advantage.
At Ariba, we created the category of B2B e-commerce. As leaders, we were able to inspire a following with our vision of increasing global trade, making goods and services more accessible, and increasing the speed of business. Since we created the category, we were able to de-position our competition. We called the big potential entrants like SAP and Oracle, “old legacy players.” And we positioned them as dinosaurs that were slow and hard to work with.
We grouped startups together and called them “the ankle biters,” and positioned them as risky and underfunded. Commerce One, our single head-to-head competitor, we called “The Ariba wanna-be.” We positioned them as greedy because they wanted to run closed marketplaces and take a piece of the transaction. In contrast, we were “the open platform company” that created a many-to-many network where all parties could benefit.
At DocuSign, we looked beyond electronic signatures, and created the new category of Digital Transaction Management (DTM) – a catalyst for digital transformation. As leaders, we talked about increasing global commerce by enabling fast, frictionless transactions. And social responsibility was part of the story too, with massive reductions in paper, water and fuel consumption.
As category leaders we were able to establish standards for DTM and build a powerful network of industry partners that helped us increase our momentum. Together with our partners, we were able to win over press, analysts and other influencers.
Marketing the category, rather than the company, enabled us to convince the marketplace that everyone needed a B2B e-commerce solution, or a DTM solution – the question was just which one. And of course, why not pick the leader? It was certainly a lot of hard work, but it snowballed, because as category leaders, we were able to create market momentum that worked for us.
I’m convinced that category creation is one of the most powerful strategies for business success. When I meet business leaders who aren’t yet excited about it, I sometimes wonder, “If you don’t want to create a new category, why are you in business? It’s so much more fun to do something big.”