Your product doesn't fit neatly into an existing category. So you decide to create a new one. You coin a term, build messaging around it, and launch with a manifesto about why the old categories are broken.
Six months later, prospects still don't understand what you do. When asked what category you're in, they guess wrong. Your sales team has stopped using your category language because buyers find it confusing.
Category creation failed.
Here's the harsh truth: most category creation attempts fail because companies use "category creation" as a way to avoid competing in established categories they don't dominate. They think inventing a new category is easier than winning in an existing one.
It's not.
After advising three companies through category positioning decisions (one successful category creation, two better served by existing categories), I've learned that category creation only works under very specific conditions. Most companies are better served by clear positioning within an existing category.
Here's how to decide whether category creation makes sense for you.
What Category Creation Actually Means
Category creation isn't just clever naming. It's fundamentally reframing how buyers think about solving a problem.
True category creation:
You're solving a problem that existing categories don't address, or you're solving an old problem in a fundamentally new way that makes existing categories inadequate.
Examples of successful category creation:
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Marketing Automation: Before Marketo/HubSpot defined this category, companies used separate tools for email, landing pages, and lead tracking. The category unified disparate activities into a cohesive workflow.
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Customer Data Platform (CDP): Before Segment and others, companies cobbled together data pipelines with engineering resources. CDP created a category for centralizing customer data without heavy engineering.
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Revenue Intelligence: Before Gong and Chorus, sales relied on CRMs and gut feel. Revenue Intelligence created a category for analyzing actual customer conversations at scale.
These weren't just rebranding existing solutions—they framed new ways to think about problems.
What's NOT category creation:
- Renaming an existing category to sound more innovative
- Describing your product with made-up terminology
- Creating a category of one (you)
If your "category" is just you, it's not a category—it's a product description.
When Category Creation Makes Sense
Category creation is appropriate in rare, specific circumstances.
Condition 1: You're solving a problem that existing categories don't address
The problem you solve is real, significant, and not well-served by existing solutions.
Example: Before CDP existed, marketing teams struggled to unify customer data across tools. "Marketing automation" and "CRM" existed but neither category solved data unification. CDP addressed a real gap.
Test: Can buyers achieve your outcome using existing category solutions? If yes, you probably don't need a new category.
Condition 2: Your approach is fundamentally different
You're not just better at the existing approach—you use a different approach entirely.
Example: Revenue Intelligence analyzes actual conversation data to surface insights. Traditional sales tools focus on activity tracking and forecasting. The approach is different enough to warrant a new category.
Test: Is your approach a 2x improvement or a 10x different way of working? Only 10x different approaches justify new categories.
Condition 3: The market is large enough to support a category
A category needs multiple players to be a real category. If total addressable market is too small, you can't sustain a category.
Minimum viable category: 5-10 viable companies can exist in this space within 5 years.
If the market only supports 1-2 players, you don't have a category—you have a niche.
Condition 4: You can invest in education
Creating a category means educating the market about why this problem matters and why existing solutions fall short. This requires sustained investment.
Realistic requirement: 2-3 years of consistent market education through content, events, thought leadership, and evangelism.
If you can't commit to multi-year education investment, don't attempt category creation.
Condition 5: You have strong competition or partners will emerge
Ironically, category creation works better when you're not alone. Other companies building similar solutions validate the category.
If you're truly alone with no potential competitors or partners for 3+ years, it's a red flag. Markets don't sustain categories of one.
When to Compete in an Existing Category
Most companies should position within existing categories because buyers already understand them.
Compete in existing categories when:
The category is well-understood and growing: If buyers search for "[existing category] solutions" and allocate budget to this category, use it. You benefit from category demand.
Your differentiation is clear within the category: You can articulate how you're different from category incumbents without needing to reframe the entire problem.
You can win on a specific dimension: Fastest, easiest, built for [vertical], optimized for [use case]. Winning a niche in a large category often beats creating a small new category.
Example: Airtable could have created "Visual Database Builder" category. Instead, they positioned as "spreadsheet alternative" and "collaborative work management." Buyers understood the use case immediately.
The Hybrid Approach: Subcategory Positioning
Sometimes the right answer is neither pure category creation nor generic category positioning—it's defining a subcategory.
Subcategory structure: "[Specific approach/focus] for [established category]"
Examples:
- "Code-first CDP" (subcategory of Customer Data Platform)
- "PLG CRM" (subcategory of CRM, focused on product-led growth)
- "Composable Commerce" (subcategory of e-commerce platforms)
Subcategories work because they:
- Leverage existing category awareness (buyers know what a CDP or CRM is)
- Differentiate your specific approach (code-first, PLG-focused, composable)
- Attract buyers who want the category outcome but are dissatisfied with traditional approaches
Subcategory creation is much easier than full category creation while still creating clear differentiation.
The Category Creation Playbook
If you've decided category creation makes sense, here's how to execute.
Step 1: Name the problem, not just the solution
Category names should describe the problem space or outcome, not your product features.
Good category names:
- Revenue Intelligence (outcome: smarter revenue decisions)
- Customer Data Platform (outcome: unified customer data)
- Conversation Intelligence (capability: understanding conversations at scale)
Bad category names:
- "AI-Powered Sales Acceleration" (too vague)
- "Next-Gen CRM" (derivative, not new)
- Acronyms that require explanation (nobody knows what XYZP stands for)
Step 2: Educate relentlessly
Creating a category means teaching the market:
- Why this problem matters
- Why existing solutions fall short
- What's possible with a new approach
Content required:
- Definitive guides and research reports
- Regular thought leadership from executives
- Speaking engagements at industry events
- Partnerships and co-marketing with complementary categories
- Analyst relations to get category included in market maps
Timeline: 18-36 months of sustained education before the category gains traction.
Step 3: Build a category ecosystem
Categories don't thrive with single vendors. Actively encourage competition and partnerships.
- Don't fight companies building similar solutions—acknowledge them as validating the category
- Create content that defines the category broadly, not just your product
- Partner with complementary solutions
- Participate in (or create) industry associations around the category
A rising tide lifts all boats. Growing the category benefits everyone.
Step 4: Get analysts to recognize the category
Gartner, Forrester, and G2 shape how buyers think about categories. If they don't recognize your category, it's much harder to establish.
Analyst engagement:
- Brief analysts on the category (not just your product)
- Provide market data and research
- Connect them with customers using category language
- Work toward getting the category included in market guides and wave reports
If major analysts don't acknowledge the category within 2-3 years, it may not be viable.
Step 5: Track category adoption
Measure whether the category is catching on:
- Search volume for category terms
- Media mentions of the category
- Competitors adopting category language
- Buyers using category terms in conversations
- RFPs mentioning the category
If adoption is flat after 18 months, reconsider the strategy.
The Risks of Category Creation
Category creation can backfire in several ways.
Risk 1: Category confusion
Buyers don't understand the category and fall back to familiar categories that are close enough.
Result: You spend years educating the market while competitors in adjacent categories capture demand.
Risk 2: Category capture by competitors
You create the category, but a competitor with more resources defines it and claims leadership.
Example: You coined "Revenue Intelligence" but a well-funded competitor dominates the conversation and is seen as the category leader.
Risk 3: The category never takes hold
Despite your efforts, buyers don't adopt category language. The market doesn't care about the distinction you're trying to make.
Result: Wasted positioning effort. You eventually pivot to an established category anyway.
Risk 4: You're too early
The problem you're solving is real, but the market isn't ready to prioritize it yet.
Result: You've created a category that won't matter for 5+ years. By the time it matters, you may not survive.
Making the Decision: Category Creation vs. Category Competition
Here's the framework to decide:
Create a new category if:
- [ ] Existing categories genuinely don't address the problem you solve
- [ ] Your approach is 10x different, not 2x better
- [ ] TAM supports 10+ viable companies
- [ ] You can invest 2-3 years in market education
- [ ] Natural competition or partners exist/will emerge
Compete in existing category if:
- [ ] Buyers already understand and budget for the category
- [ ] You can clearly differentiate within the category
- [ ] You can win on specific dimensions (vertical, use case, approach)
- [ ] Existing demand exceeds supply
Define a subcategory if:
- [ ] Your approach is different but not different enough for full category creation
- [ ] You benefit from adjacent category awareness
- [ ] You're targeting a specific segment within a broader category
Most companies fall into option 2 or 3. Category creation is the exception, not the rule.
The Reality Check
Category creation sounds exciting. It promises to make you the default leader in a space you define. But it's brutally hard and fails more often than it succeeds.
Before pursuing category creation, honestly answer: Is this the best use of our resources, or are we avoiding the harder work of winning in an established category?
Often, clear positioning and sharp differentiation within an existing category drives more growth than attempting to educate the world about a new category.
Choose the path that gets buyers to understand and choose you fastest, not the path that sounds most innovative.