Marketing that Matters 033: Category Creation
Invent the Market or Infiltrate It?
Hey there.
This one comes up all the time, especially in the early innings (it is baseball season after all, and my Blue Jays are looking really good) of startup life. Should you try to create a new category, or find a smarter way to compete in one that already exists?
It sounds like a big strategic decision, but really, it’s about storytelling. Not in a fluffy "let’s write a manifesto" way, but in the practical sense of how you explain what you do, to investors, to customers, and even to your own team (recruiting talent is probably the #1 priority for most startups at the end of the day).
There’s a long-standing tension here. On one side, the dream of category creation. You get to define the rules, shape the narrative, and (if everything breaks your way) become the name people reach for. On the other side, the more common and usually more realistic path is to play in an existing market with a sharper point of view and a better story.
I’ve seen both work. But only one of them requires years of content, repetition, and most importantly, capital.
TL;DR: Most startups don’t need to invent a new market. They just need to show up clearly, tell the right story, and name their edge.
Let’s break it down.
Creating a Category: The Allure of the New
The upsides are obvious. If you pull it off, you get to define the narrative. You become the shorthand. The category starts to orbit around your company.
Yoav Vilner, who’s helped create multiple tech categories, put it like this in Fast Company:
“Creating a new product category is a long and sometimes winding road. But as with any other part of the entrepreneurial journey, strategy and fierce dedication pay off in the end.”
Fair enough. And the data backs him up. According to Harvard Business Review, companies that create categories account for 53% of incremental revenue growth and 74% of incremental market cap growth.
But those numbers don’t tell the whole story. Strategy and fierce dedication are necessary, but so are timing (interest rates, tariffs, wars), distribution, team, and the small detail of actual demand. The road is long for a reason. Most companies don’t have the budget or the years it takes to pave it.
Blue Ocean Strategy: Still Relevant, Still Misunderstood
Most business advice/strategy books don’t age well. But Blue Ocean Strategy has stuck with me more than a decade after reading it. Alongside Zero to One (yes, Peter Thiel) and Influence by Robert Cialdini (a must-read for any marketer), it's one of the few I still think about.
Chan Kim and Renée Mauborgne coined the terms “red ocean” and “blue ocean” to describe competitive vs. uncontested market spaces. In red oceans, companies fight over existing demand, leading to bloodied (red) margins and incremental gains. In blue oceans, demand is created. Competition is irrelevant. It’s differentiation and low cost, at the same time.
But here’s the issue: too many founders misunderstood the point. They read "make the competition irrelevant" and interpreted it as "ignore the market entirely." Instead of finding whitespace and leveraging it smartly, they jumped into totally undefined categories, without existing demand, budget, or buyer understanding.
Blue Ocean Strategy never said the market should be empty. It said you should reconstruct industry boundaries. You still need a market. You still need customers. You’re just approaching the problem in a novel way.
As the book puts it: “The aim is not to outperform the competition in the existing industry, but to create new market space, or a blue ocean, thereby making the competition irrelevant.”
Resegment, Don’t Reinvent
Drift didn’t invent live chat. They reframed it as “conversational marketing.” HubSpot didn’t invent blogging. They termed it “inbound marketing” (and ruined the internet along the way). Two of thousands of examples of existing market tweaks through positioning.
This is resegmentation: identifying a pattern in an existing market and giving it a name, a story, and a category people can rally around.
Category design is often just differentiated positioning with a better PR strategy.
First Mover ≠ First to Win
There’s also the myth of the first-mover advantage. But in practice? It’s usually better to be the first to get it right, not the first to talk about it. Creating a category means years of sustained effort: books, podcasts, speeches, content, repetition.
So When Should You Create a Category?
When you’ve validated that the problem is big enough.
When you’re solving it in a truly different way.
When existing categories don’t come close.
When you’re ready to spend years owning the narrative.
Otherwise? Don’t.
Instead:
Compete in an existing market with a strong point of view.
Use your differentiation to resegment the space.
Name the wedge, not the category.
And yes, we all know that “We’re the X of Y” is played out. And saying it’s played out is also played out. But that’s the point… don’t reach for catchy metaphors before you’ve nailed what you actually do.
Final Thought
Creating a category sounds fun. Strategic. Visionary. But for most startups, it’s just one more way to make a hard thing harder.
The better move? Build something great. Find the edge. Tell the right story. Let the category follow.
Yours in marketing, Jeff