vs. SurveyMonkey
Qualtrics
One research core, several experience products
- What it did
- CX and EX built from watching Research Core use
- SurveyMonkey
- First $1M customer in late 2018; CX tools bought in 2019
Category Design
What is Category Design?
Category design is the practice of naming a new market category or way of working, teaching buyers how to judge it and claiming it before rivals do. The term comes from the book Play Bigger. It works when buyers, analysts and competitors start using the name, and the company that coined it becomes the reference point.
Also calledcategory creationcategory design (Play Bigger)creating a new category
How Category Design works
The company that defines the category becomes the reference point. Buyers search for the term and compare later vendors against the criteria it set. HubSpot spent years promoting inbound marketing; its free Website Grader and blog diagnosed a prospect's site and led to sales calls, and by 2014 inbound supplied over 93% of its new customers. Qualtrics launched experience management, or XM, in March 2017 and built customer and employee products under it.
Naming a category takes years of education spending, and the name may never catch on.
Name the methodHubSpot promotes 'inbound marketing' from 2006
Teach it freeWebsite Grader and blog diagnose prospects' sites
Market adopts the termMarketers and agencies use 'inbound' widely
Buyers arrive at HubSpotOver 93% of new customers, 2014
How companies won with Category Design
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. Marketo · 2006–14
HubSpot
Teach inbound marketing and own the term
- What it did
- Website Grader and the blog diagnosed a buyer's site and led to sales calls
- Marketo
- Sold primarily through a direct sales force from San Mateo, Atlanta, Dublin, Tokyo, Sydney and London (2013–14 filings)
Also tagged: Palo Alto Networks · Rubrik
Category Design vs. Competitive Alternatives and First-mover advantage
| What it is | How to tell it apart | Example | |
|---|---|---|---|
| Category Design | Naming a new category and its buying criteria before rivals, then seeing others adopt it | Check who used the name first and whether others took it up | HubSpot promoting 'inbound marketing' |
| Competitive Alternatives | Positioning against what buyers actually use instead, such as paper or spreadsheets | It frames an existing choice and needs no new category name | Field-service software framed against pen and paper |
| First-mover advantage | Gains from being first to launch a product in a market | First to ship is a different claim from first to name the category | eBay's early lead in online auctions |
How to tell if a company has it
- The company coined the category nameIt named and promoted a new category or way of working, beyond a product name or tagline.
- It used the name before rivalsDated first use precedes any rival's. Rebranding to a category a rival established counts as following.
- Others took up the nameBuyers, analysts or rivals use the term, or the company's buying criteria define how the category is judged.
Who names it
| Author | What they call it / where it appears |
|---|---|
| Dunford + | Choosing the market category |
| Moore + | Becoming the gorilla in a new category |
| NFX | Language network effect |
| Ramadan, Peterson, Lochhead & Maney + | Category design |
| Stewart Butterfield + | We don't sell saddles here |