Category creation isn’t just about inventing something new. It’s about finding the words that change how people see it, buy it and value it.
In tech the companies that win aren’t necessarily those with the best technology. They’re often the ones that find the language to make their technology mean something different.
Jeeps helped popularise SUVs. Plastic surgery became aesthetic medicine. Diabetes drugs became “fat jabs”. In technology, traditional on-premises infrastructure has been reframed through the language of data sovereignty.
The products may overlap but change the language and you can change the market.
Category creation is the art of redefining what customers think they are buying – and why it matters.
1. Words create markets. They can also destroy them.
A new name can elevate a commodity into a strategic priority, unlock budgets or help customers recognise problems they hadn’t previously articulated.
But recategorisation cuts both ways.
Consider Net Zero in the UK. An ambition to reduce emissions has become entangled in political disputes over costs, energy security and economic priorities. Whatever one’s view of the policy, the label itself has become contested.
When a category becomes politically toxic, associated businesses can suffer collateral damage. The underlying proposition may remain valuable, but its language can make it harder to sell.
For founders, the lesson is clear: you need a compelling category and language that can survive changing market conditions.
2. Beware the Gartner Magic Quadrant trap
Technology founders face another challenge: fitting their business into somebody else’s category.
Analyst frameworks, including Gartner’s Magic Quadrant, influence how buyers understand markets. Investors also use established categories to compare companies and opportunities.
But what happens when your company doesn’t fit an existing box?
Perhaps you’re combining capabilities previously treated separately or challenging assumptions on which established vendors depend.
The danger is changing your story to fit the framework, adopting accepted terminology and competing on somebody else’s terms.
Analyst frameworks are useful, but they aren’t the final authority on what a market should become.
Don’t compress your company’s vision into someone else’s Magic Quadrant just to satisfy buzzword-hungry investors.
Understand existing categories, but don’t let them imprison your thinking. Explain why your category deserves to exist.
3. Your first category doesn’t have to be your last
Some of today’s biggest technology companies began as something quite different.
Slack emerged from communication tools developed by the team behind the multiplayer game Glitch. Twitch evolved from Justin.tv, originally built around broadcasting its founder’s life online. Instagram began as Burbn, a location-based check-in app. Roblox started as DynaBlocks, an interactive physics and building project.
Each discovered a different source of value and built its identity around it.
Categories aren’t permanent labels attached to companies at birth. They evolve as technology advances, customer behaviour changes and founders discover what markets actually value.
A pivot isn’t necessarily failure. It can be the moment a company discovers the category it was better suited to create.
4. Neolabs and Neoclouds: new categories or new labels?
The battle over language is particularly visible in AI.
Companies such as Anthropic, ElevenLabs, Stability AI and xAI are often described as AI labs.
The term suggests research, experimentation and breakthroughs rather than conventional software development.
But is an AI lab fundamentally different from a software company with substantial research and development capabilities?
The distinction matters as AI companies grow and face greater scrutiny over safety, liability and commercial risk. Calling a company a lab doesn’t remove its responsibilities for the products it develops. Nor should investors or insurers assume that a research-oriented identity makes those risks less significant.
The same applies to superintelligence. The term has rhetorical power but describes an ambition or capability rather than necessarily defining a distinct commercial category.
Adding super to an existing concept is a form of betterism: suggesting something is simply bigger, faster or more powerful. It captures attention but doesn’t explain what changes for customers or why a different new category is needed.
Founders must distinguish language that generates excitement from language that establishes a durable category.
5. Neoclouds: naming a new layer of the AI stack
Companies such as Together AI, Modal, Fireworks AI and Nscale provide specialised infrastructure for AI workloads, including training and inference.
The term neocloud positions these providers as alternatives to traditional hyperscalers, with infrastructure designed around AI’s particular computing demands.
AI creates distinctive requirements for GPU capacity, networking, performance and cost. A category built around these needs helps customers understand why specialised providers exist alongside established cloud platforms.
But do neoclouds represent a genuinely distinct layer of the technology stack, or simply a new label for specialised cloud services?
A successful category needs more than a catchy name. It requires a recognisable customer problem, a differentiated proposition and a reason for the market to organise itself around the new definition.
The AI revolution isn’t just about building models. It’s also reshaping the infrastructure beneath them – and the language we use to describe it.
6. What should founders do?
Five principles can help:
i) Define the problem before naming the category. Start with the customer challenge and why existing solutions fall short.
ii) Understand existing language. Established terminology helps buyers but can limit your ambition.
iii) Distinguish differentiation from betterism. “Next-generation” and “AI-powered” descriptors aren’t enough. Explain what fundamentally changes for customers.
iv) Anticipate unintended consequences. Categories can become politicised, diluted or associated with unintended expectations.
v) Keep evolving your story. Your initial positioning may not suit your next stage of growth.
Win the argument before you win the market
Category creation is a battle over meaning. Your language influences how customers understand your product, how investors value your opportunity and how the market distinguishes you from competitors.
Sometimes you should enter an established category. Sometimes you should redefine one. And sometimes you should create an entirely new category.
The skill lies in knowing which approach serves your business – and telling that story consistently.
In category creation, language isn’t the wrapping around the product. It is a major part of the product’s strategic value.