They required periods of building, followed by experimentation, analysis of results and course-correction while the Category developed. Change did not stop, while they were busily building their Category, rather they embraced it.
Others happened upon their Categories thanks to events. Such ‘happy accidents’ include Slack, whose founders originally saw their category as videogaming before owning the ‘workplace collaboration’ category, or Zoom which came about because its founder could not get his employer, Cisco, to build the product he knew the market needed.
Such chameleon-like adaptation is true across the digital economy, where economics move fast and where the resolute investors in major Category-defining companies like Uber and Amazons are forced to endure long ‘runways to profitability’. Today it is common for startups to test Minimal Viable Products (MVPs) using freemium models. which deliberately sacrifice earlier profitability for those early-market insights needed to stay ahead and build Categories out more completely and for greater gain when the market is ready to take-off.
“Time may change me, but I can’t trace time”, was David Bowie’s fatalistic cry in his stirring anthem, Changes, recorded in 1971, just ahead of a global oil crisis which forever changed our view of fossil fuel consumption. The song talks about the primal need we all share for constant reinvention. Put another way, change will happen with or without your involvement. It is the perfect soundtrack for the most common type of Category Design, the Category redesign.
What then, of the successful, established businesses? Why would they create a Category of their own? After all, they have revenues, they have products which attract buyers, they know their competition and they have established their position in the Categories they play in. Why would they even bother to design their very own Categories? In fact, most of the companies Categorical and its sister company, Positive, help with Category Design are in exactly this position.
Our counsel is that if you are in an absolutely nailed-on Category, which has experienced all the change it is ever likely to, you may want to save the time, effort and opportunity costs and hunker down. The trouble is, we have yet to find any Category unaffected by change. Horse buggy whips? Maybe. Fishing flies manufacturing? Not really. Funeral services? Certainly not.
Even if we did find that elusive industry, unaffected by the rise of digitization, with information flowing more freely over more channels than ever before and buyers completely changing their purchasing journeys, everything changed with COVID-19.
Very few saw lockdown coming and if anything it levelled the playing field both for established players in Categories centuries-old like ocean cruising and banking, as well as those offering comparatively new services. For startups it shortened their runways radically.
In many ways it was Day Zero for many Categories. Responses have been wide ranging. From defensive cash conservation, as anyone trying to persuade an airline to refund their cancelled flights knows all too well, to aggressive exploitation of emerging and urgent needs like ventilators, face masks and sanitizers.
Just consider the commendable job the video collaboration firm, founded by that disgruntled Cisco employee, has done in keeping its services up and running. Zoom did this despite unprecedented demand both from the users it hoped to attract and a tidal wave of households who reinforced its position as Category Leader by deploying it for family bingo nights. Change can be delightfully unexpected.
In the enterprise world, the clients we have been advising have pivoted massively, some opportunistically into entirely new Categories. One, a Building Information Systems firm figured out its software, in widespread use by facilities management and architects, could be repurposed as a ‘return to work’. It was then able to position as a way to ease ‘nervous returners’ in white collar professions back behind their desks.
Another new client offered its clinics-only antibody test service directly to employers, who can now offer such tests as a benefit to their workforce.
Yet another newly-signed client is looking to benefit from the post lockdown reassessment of what worked and what sucked during these unprecedented times. Its team is busy building a Category to take on even those riding high in the crisis. It seems Zoom will be challenged to share some of those Working From Home with a more secure and reimagined ecosystem partner post lockdown.
Such chutzpah comes as no surprise to those building tomorrow’s Categories. But these are just some of the opportunities which the tragedy of COVID has laid in front of tomorrow’s chameleon-like Category builders.
We truly cannot trace time. But true Category Builders, factor in scenarios to their thinking and press on. They know almost everything changes at some time and these changes may benefit the category they are building. So, even without a ‘clean sheet of paper’ opportunity knocks. It could be time to move out of that over-competitive, samey Category and try on some new colours. Now is a great time to build your new Category.