Where New Software Categories Actually Come From
Every few years I pull The 22 Immutable Laws of Marketing off the shelf and give it another read. Al Ries and Jack Trout wrote it decades ago, and some of it shows its age. But almost every time I revisit it, something in there lands differently than it did the last time — usually because I'm looking at a different problem.
Lately that problem has been software category creation. And a handful of their laws keep coming back up.
The Law of Leadership. It's better to be first than it is to be better. The first brand into a category is almost always the first brand people think of when they think of that category.
The Law of the Category. If you can't be first in a category, create a new category you can be first in.
The Law of the Mind. It's better to be first in the mind than first in the marketplace.
The Law of Perception. Marketing isn't a battle of products. It's a battle of perceptions.
The Law of Focus. The most powerful thing in marketing is owning a single word in the prospect's mind.
The Law of Division. Given enough time, a category splits into two or more categories.
None of these are gospel. Marketing doesn't work in absolutes, and there are exceptions to every one of them. But taken together, I think they point to something worth remembering: categories are important. Affixing a label to your product helps in positioning it in the mind of the target customer. It can help them understand how it fits in their world — and if it's done well, it can help them consider the potential of an alternative point of view.
Replacing the point of view, not just the product
The companies that successfully create a category aren't the ones with the better feature set. They're the ones who hand the market a new picture of what tomorrow looks like, and then position their product as the only bridge from here to there.
That's the part that actually does the work. It's not “our product does X better than the incumbent.” It's “here's a better tomorrow, and everything you're doing today is what's standing between you and it.” Done well, it makes the old way of doing things look outdated — not wrong, just no longer sufficient. That's a very different sell than feature-for-feature comparison, and it's why category creators rarely win by being better. They win by being first with a new frame.
Category creation vs. category design
There's an ongoing argument in marketing circles about whether categories can be designed at all. The counterargument is that they can't — that market forces converge on their own timeline, and no amount of clever positioning creates a category before the market is ready for one.
I think that's mostly right. What a company can do isn't design the category into existence. It's see the convergence coming before competitors do, understand the problem the market is starting to feel, and move fast enough to claim leadership once the category does form. The company doesn't create the conditions. It recognizes them early and gets there first — which loops right back to the Law of Leadership.
When you can't leap straight to a new category
Sometimes the market just buys a certain way. RFPs are specific for an existing product category. Organizations budget for a specific type of software. Jumping straight to “an entirely new category” isn't realistic yet — and doing so might exclude you from opportunities you could otherwise take advantage of. In that case, there's a middle step: carve out a distinct, ownable space inside an existing category rather than trying to escape it.
It's not as clean as owning a category outright. But it also gives you a way to stand out inside a crowded space, with a sharper answer to your target market's problem than the rest of the category is offering. For a lot of companies, that carve-out is the more realistic first move, and can serve as the platform for a bigger category claim later.
You have a few options
End of the day, I believe labeling — or bucketing — your product aids in establishing a position in the mind of your target market. You basically have three options:
1. Create a brand new product category. If this is done by taking advantage of converging market conditions that bubble up into a category that's ripe for you to label and run with, then do this. If not, beware — you'll have to do a lot of educating. This can happen, but it will take a lot of time and effort.
2. Be part of an existing product category. You run the risk of getting lost in the crowd and hearing, “I don't need that, I already have one.” And if your product is truly better than others in the space at making the lives of your target better, you run the risk of underselling your value.
3. Take the middle ground. If converging market conditions aren't obvious enough to seize on and create a new category, carve out a unique position for yourself in the existing market — one that sets you apart and segments the category (the Law of Division).