Play Bigger

Book 6 of 52 in the Mitch’s Notes Project

Why This Book?

It’s not any of this first-mover advantage bullshit…The first inventor is an innovator to be thanked. The first to define and develop a category is a category king to be followed.

This book is about the strategy that builds category kings.

Category kings take it upon themselves to design a great product, a great company, and a great category at the same time. A category king willfully defines and develops its category, setting itself up as the company that dominates that category…

Category design is about increasing the odds that your work matters. Too many CEOs believe that customers will buy when they learn about the features of their breakthrough innovation. But a product and a company don’t float in space. A product and a company exist inside a category. If you don’t take charge of the category, someone else will, and then you’re royally screwed. Position yourself or be positioned.

You should buy the BOOK.

Category: Marketing; Positioning

What is in it for you?

This book has refined my perspective on growth strategy. This is a culmination of the books we have reviewed to this point in the Project. It teaches you how to improve the value of your business. That is ultimately what is in it for you, your employees, and your stakeholders.

In Zero to One, Peter Thiel examined monopolies and concluded that

Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding.

So far in the Mitch’s Notes Project we have examined network effects and economies of scale in The Content Trap. We have talked about branding and positioning in The 22 Immutable Laws, Different, and the 20 Principles that Drive Success. Play Bigger is a capstone project that brings these topics together and examines them through a category lens — a market domination and monopoly lens. This is a book about next level positioning, network effects, economies of scale, and branding. Category creation is its own discipline and it is an exceptionally valuable endeavor. This book breaks it down. It is a must read.

Where Should You Start?

The authors, like me, are fanboys of Al Ries and Jack Trout, the authors of The 22 Immutable Laws of Marketing that we reviewed in Book 1. You should review a few laws in particular.

1. The Law of Leadership — It is better to be first than it is to be better. The first brand in any category is almost always the first brand into the category. Everyone remembers Charles Lindberg. Almost no one remembers Bert Hinkler.

2. The Law of the Category — If you can’t be first in a category, set up a new category you can be first in. The first woman to fly across the Atlantic Ocean was Amelia Earhart. Everyone is interested in what’s new. Few people are interested in what’s better. When you’re the first in new category, promote the category.

3. The Law of the Mind — It’s better to be first in the mind than to be first in the marketplace. Once a mind is made up, it rarely, if ever, changes. You have to blast your way into the mind. People don’t like to change their minds. Once they perceive you one way, that’s it.

4. The Law of Perception — Marketing is not a battle of products, it’s a battle of perceptions. There is no objective reality. There are no facts. There are no best products. All that exists in the world of marketing are perceptions in the minds of the customer or prospect. Perception is the reality.

5. The Law of Focus — The most powerful concept in marketing is owning a word in the prospect’s mind. You “burn” your way into the mind by narrowing the focus to a single word or concept. The leader owns the word that stands for the category.

7. The Law of the Ladder — The strategy to use depends on which rung you occupy on the ladder. If you lose first to market, there are strategies to use. There’s a hierarchy in the mind that prospects use in making decisions.Your marketing strategy should depend on how soon you got into the mind and consequently which rung of the ladder you occupy.

10. The Law of Division — Over time, a category will divide and become two or more categories. Each segment is a separate, distinct entity. Each segment has its own reason for existence. And each segment has its own leader, which is rarely the same as the leader of the original category. Timing is also important. It’s better to be early than late. You can’t get into the prospects mind first unless you’re prepared to spend some time waiting for things to develop.

Part I: The Category King Economy

Creation Wins

Legendary companies create new categories that generate a gravitational pull on the market. Customers rush to a new category because it makes sense to them. In some cases, people leave an old category behind, and their departure sucks the life out of it. In that way, sure, new categories disrupt old categories. But for the smartest pirates, dreamers, and innovators on the planet, disruption is never the goal. Creation is the goal.

These companies don’t only invent something to sell us. They are not making products or services that just incrementally improve on whatever came before. They don’t sell us better. The most exciting companies sell us different. They replace our current point of view on the world with a new point of view. They make what came before seem outdated, clunky, inefficient, costly, or painful.

The Economics Advantages of Category Creation

• “Category Creation Is the Ultimate Growth Strategy.” Eddie Yoon of Cambridge “Wall Street exponentially rewards the category creation companies.” They generate $5.6 in incremental market cap for every dollar of revenue growth.
• A category’s non-kings struggled. Our data science research found that a six-year-old start-up that wasn’t yet a king had almost zero chance of becoming one.
• Apple took 93% of the profits in smartphones. Uber was valued at 25x that of Lyft.
• Flywheel of additional benefits widens the gap for category kings. Data. Employees. Investors. Developers. Bankers. Acquisitions. The economic power of a category king just builds and builds.

Category is the New Strategy

Today the powerful transforming force is the category — creating a new market for a new product, often (but not always) from a new company. A great message, a great product, a great innovation — these things are no longer enough on their own. Now it’s critical to develop a great new market category in concert with building a great company and product.

It becomes much easier — much clearer — for people to think primarily in terms of the problem they want to solve. In that sense, a problem is a category. A company that best frames a problem is the company that often comes to define and take the category. Put another way: winning companies today market the problem, not just the solution.

Psychological Benefits of the Category King

Once the public understands the problem, people latch on to the most popular solution.

We default to buying from category kings. It makes us feel safe.

1. Anchoring Effect — the tendency for the first bit of information to affect our view of all the information that comes after.
2. Choice Supportive Bias — the tendency to give positive qualities to an option we’ve chosen just because we’ve chosen it.
3. Groupthink Bias — the tendency to believe things because other people do.

You want these biases working in your favor. See also The Immutable Laws outlined above.

The Three Legged Stool

A category-based strategy requires the design of a great product, a great company, and a great category at roughly the same time.

Product design is the purposeful building of a product and experience that solves the problem the market needs solved. The goal is what is traditionally called a great product/market fit — in other words, a great product/category fit.

Company design is the purposeful creation of a business model and an organization with a culture and point of view that fits with the category. The goal is a great company/category fit.

Category design is the mindful creation and development of a new market category, designed so the category will pull in customers who will then make the company its king.

All three elements — company design, product design, and category design — work together and balance each other to exert great force on a company’s success and value. The legendary, enduring companies get the three elements of company design, product design, and category design in such a state of synchronicity, they reinforce each other and build momentum in a flywheel effect.

The company that leaves category design to someone else is tempting fate, potentially wasting the opportunity to be a category king. And as we’ve seen, the king takes almost all of the category’s economics — market share, market cap, and profits — leaving its followers with crumbs.

The Discipline of Category Design

Category design is the discipline of creating and developing a new market category, and conditioning the market so it will demand your solution and crown your company as its king.

Category Design Overview​

1. “Category design drives the company’s strategy to become a category king. The strategy has to start with the CEO and her leadership team identifying the right category to create, making sure the product and company fit the category.”
2. “Category design involves product and ecosystem design. That includes creating a blueprint that generates a belief that you have the solution to an urgent and giant problem. It means developing an environment around your product that wins loyalty and gratitude for the product and company.”
3. “Category design is part of company culture. It is directly connected to the kind of company you build, the type of people you hire, and the type of community around the company including investors, partners, analysts, and journalists. It is the company’s point of view on the world.”
4. “Category design is about creating a powerful and provocative story that causes customers or users to make a choice. The story evokes something different from what came before, not just better.”
5. “Category design is marketing, public relations, and advertising when it is all focused on conditioning the market to desire and need whatever you’re giving it. The goal is to condition the market to have an aha that changes people’s consumption, usage, and buying decisions. This is much more than messaging and branding.”
6. “Above all, category design is making all of these components work together, in lockstep, feeding off each other, so each action builds momentum for the category and its king.”

Define and Evangelize the Problem

This chapter describes Benioff’s “No Software!” strategy. He evangelized the problem, he didn’t sell the solution. The key takeaway here is that you should focus first on the problem. Define the problem in such a way that only you can solve it. In the end, the company that defines space and its problem is best positioned to dominate it.

The Role of the CEO

1. What does all this mean for a CEO, founder, or category creator of any kind? Your number one job is to change the way people think. Your product, your company culture, your marketing — everything has to be aligned with transforming the way potential customers think.
2. Part of being a category king is having the courage to be nonconsensus. Category kings have no model. If you’re using a model you’ve seen elsewhere, you are de facto following.
3. It is the CEO’s job to have that courage, and to infuse the rest of the organization with courage.
4. The CEO or equivalent leader has to be the driver of category design. It’s not a job for the chief marketing officer or the head of product design or any other department head.
5. The CEO has to see something no one can yet see, and if you can’t make potential investors, employees, or customers see it, too, they won’t want anything to do with your company.

Part II: The Category King Playbook

Start: How to Discover a Category

The process of category design starts with discovery — looking for those critical insights with the team through a series of conversations, interviews, whiteboarding sessions, or drinks….This becomes the first phase of real category design, converting insight into a plan for a worthy category, a compelling story, and a course of action for conditioning the market to see the world the way you do.

Tablestakes Category Questions

1. ​Can you explain to me like a five-year-old what problem you’re trying to solve? To create a category, that problem needs to be one that people didn’t realize they had or didn’t realize they could solve.
2. If your company solves this problem perfectly, what category are you in? in? It needs to be a category that doesn’t exist and that you have the ability to create. It must be nonconsensus or you are by default a follower.
3. If you win 85 percent of that category, what’s the size of your category potential? The answer tells the world how big your company can become and how much your company will matter.

Founding Insight Types

The authors categorize insights into two types: market insights and technology insights.

1. A market insight involves seeing a “missing” in the world at large and believing that technology can be built to solve it. When you have a good one, it seems a little crazy. It is nonconsensus. It becomes your job to make it consensus, and to believe in it when no one else does.
2. A technology insight usually comes from a scientist or engineer. The “missing” is entirely about the technology itself. An inventor sees a way to create something that’s never before existed, often hoping that a worthwhile problem can be found that the invention will solve.

Category Discovery Steps

Step 1: Start with Who — CEO must be committed, but someone has to do the work

Step 2: Fact Finding Questions[These double as a pitch deck template]

• Vision mission: What was the original market or technology insight that led you to create this company?
• Customers: Who do you envision buying this product or service? Who will use it?
• Problem statement: What’s the problem you think you can solve for your potential customers?
• Use cases: What are the specific ways people will use this product or service to solve their problem?
• Product/solution: Give a detailed explanation of the technology behind the solution — what does it do now, and what else is it capable of doing?
• Ecosystem: In many cases there are other companies involved in solving the problem or adding additional value. These companies form an ecosystem around the problem and solution. What are all the companies and where in the ecosystem are the control points where one company has leverage?
• Competition: Who else is trying to solve this problem — or, if no one else sees the problem yet, who might jump in to compete with you to solve the problem once you identify it?
• Business model: How will your product or service change business for your customers? Will it increase their return on investment or reduce costs in a significant way? Or does it allow them to do something that couldn’t have been done with prior technology, creating huge value?
• Sales and go-to-market: Enterprise companies should articulate how the product or solution will make its way to the market. Through a sales force? Through distribution partners? Both? For a consumer company, how will users find out about your solution? From app stores? Search? Viral adoption? Growth hacking techniques? Advertising? PR?
• Organization: How is the company organized? Who are the major influencers on the company? How are decisions made? What kind of culture will work?
• Funding strategy: What’s the next funding event? A private financing? An IPO? How much runway does the company have before it needs more money and what kind of funding is in place to execute against the category strategy?

Step 3. Workshop — take a full day with your leadership team to debate and refine the answers to the questions above.

Step 4: Name the category — Keep it simple, powerful, clear, and different. 2–3 words that describe the problem of the category.

Step 5: Package the Work — after 10 revisions you can commit and start sharing the initial results.

• Category Landscape — what the category you create would look like and where it fits.
• Category Ecosystem — the customers, competitors, developers, suppliers, analysts, media, and everyone else who would plug into the category.
• Frotos — the from/to journey you want customers to take. Category Name and Description — the final version.
• The Case for the New Category — write out why the category should exist and what the world will look like if the company creates and dominates the category.
• Early Draft Game Plan — a sketch of how the company can create and dominate the category.

The purpose of packaging and presenting a category design document is to refine it, nail it down, and get complete buy-in. Once you commit to the new category, there is no turning back. You’ve got to burn the boats.

Strategy: The Power of a Point of View

How Stories Make a King

Character-driven stories with emotional content result in a better understanding of the key points a speaker wishes to make and enable better recall of these points weeks later…In terms of making an impact, [storytelling] blows the standard PowerPoint presentation to bits.

Category designers are master storytellers and the story they tell is a Point of View.

Components of a POV

• A POV tells the world you’re a company on a mission, not a missionary company looking to make money any way it can. It frames the new problem that your category identifies, and sets you up as the answer.
• A great POV separates the companies, products, and categories that people love from the ones they, at best, tolerate.
• A POV conditions the market to accept and embrace the company’s vision and have the same aha the founders experienced. The story leads potential customers on their from/to journey, so they understand both what is missing and why your company can fix that problem. A POV has to shift people’s minds so they reject an old way of thinking and come to believe in something new. It has to reach people on an emotional level. No one remembers what you say — but they remember how you made them feel.
• A POV tells a story with a beginning, middle, and end. It tells the world why this category and the company creating it are different. Different sticks. Different forces a choice between what was and what can be.
• A well-executed POV gives the company an identity and culture. It becomes the invisible hand that guides your priorities. It results in the right kinds of employees joining the company, the right kinds of investors funding it, and the right ecosystem building out around it — and, by the way, repels those you don’t want hanging around.

The Right Story for the Right Time

A great POV is not just the right story — it’s the right story for its time. The POV has to take into account the state of technology and the mindset of society. A great POV pushes people just enough into the future, while giving the world a view toward what lies beyond. [Think Netflix with DVD’s even though streaming was the ultimate POV.]

How the category POV improves the product and the company.

• Hiring — You’ll attract the employees you need if you can explain why your mission is compelling: not why it’s important in general, but why you’re doing something important that no one else is going to get done.
• Investor Relations — Whether you’re a tiny start-up seeking angel money, a growing company going for a B round, or an IPO candidate, a POV will be the best investor relations tool you’ll ever have.
• Employee Alignment — Leadership has to evenglize the POV internally. “The ultimate result of this meticulous coordination is that everyone is on message with the precision of a sophisticated political campaign.” The way you use language recasts thinking, and when you recast thinking, you recast action.
• Product Development — A strong POV tells the engineers, product managers, writers, architects, designers, and other creators what to build — and, more important, what not to build. Every product and feature needs to align with the POV and further the company’s mission.
• Brand — POV is an articulation of strategy, and so POV informs branding and positioning. POV first is the company’s identity, looking inward. Once that identity is embraced internally, then the company can turn to the public and confidently say, this is who we are and why we matter.

Point of View Discovery and Expression

Step 1: Who? — Someone outside the company’s day-to-day operations, yet has the full trust of the CEO

Step 2: Fact Finding Strategic and Cultural Questions

• How the company and product are different
• How the company will create the product that solves the problem
• The envisioned ultimate outcome
• The culture and nature of the company

Step 3: Agree on the Problem — You have to know how to clearly state the problem you’re solving before you can describe your solution. Remember what we said earlier: whoever frames the problem best has the best chance of winning the category.

Step 4: Craft a Story, Rinse, Repeat — In a limited number of powerful words, the POV should lay out the problem and its ramifications, describe a vision for the category, sketch a blueprint for how to build the category, and paint a picture of potential outcomes. At no point should a POV get into product features. Keep it simple. Use human words, not business or technology words. Keep sentences and phrases short. Be provocative. Think movie trailer! Make it emotional. Inject the company’s personality.

Step 5: Distribute, Evangelize, Mobilize — a POV has to actively evangelized by the CEO and her leadership team. Train, certify, make it religion, conditional for employment.

Mobilization: The Shit Gets Real Chapter

A CEO has limited time and mental resources, and devoting them primarily to product design at the beginning is probably the best move. Gravity tugs the founders (or innovators in a large company) away from working on the business toward working in the business.

It takes courage to become a category king, and in the witching hour the CEO has to stand behind the POV and category design strategy, and believe in the creation of a new category that doesn’t yet exist and can’t yet be measured. Gravity doesn’t want you to chase a zero-billion-dollar market. Gravity pulls hard toward an existing market that’s already defined and that customers already understand. Every business function feels it.

Implementing Category Design

We call it a lightning strike. A lightning strike is an event meant to explode onto the market, grab the attention of customers, investors, analysts, and media, and make any potential competitors crap their drawers. It is the full concentration of the company’s resources on one high-intensity strike.

The most important thing to understand about a lightning strike is that it’s not a marketing event. It’s a company event.

Some other tasks that have to get done in the run-up to the strike include creating new sales decks; writing and producing the lightning strike press materials; updating the brand so it lines up with the POV; preparing analysts so they understand the use cases, company, and category strategy; nailing the growth hacking approaches required to drive digital metrics; and readying the company website so it reflects the POV and takes full advantage of the strike.

The CEO has to throw all of her political capital behind the lightning strike. She is the only one who can drive this priority through the entire company. She must not only believe — she must be the chief category officer. If the CEO wavers or hedges or doesn’t commit the resources or gives any part of the company permission to deviate from the lightning strike mobilization, the strike will fail.

If the CEO and the board don’t have the stomach to create a category that doesn’t yet exist — it will become obvious now. If the leadership team has a weak link — it will become obvious now. We’ve seen many CEOs melt like a Popsicle dropped on a summer sidewalk at this stage. They dilute the whole thing with a week or two to go and end up executing a run-of-the-mill marketing campaign, not a lightning strike.

The Four Seminal Documents

We recommend creating four seminal documents: a category blueprint, product taxonomy, customer use cases, and category ecosystem.

1. Category blueprint — The blueprint is a design for how the product or service will work going forward. It’s not a promise of what the company will deliver, but a vision of a category that the company wants to bring into existence. A category blueprint serves as thought leadership, putting you in position to take a category where you want it to go.
2. Product Taxonomy — Basically, this exercise means taking your product apart, giving the pieces labels that synch with the blueprint, and putting it all back together so it makes sense for the category you’re designing. As you go, you are repackaging and repricing the product as necessary. If you want the world to value your product innovations, give them innovator names that tie back to your category design.
3. Use Cases — As the company works on its product taxonomy, which is a deep inward dive into your offering, a parallel step involves using the blueprint lens to look outward at customers. If the category develops the way you’re designing it, how will customers use your product? In category design, use cases are a way for the entire company to better understand how to design the product and company so they address the needs of the category over time.
4. Category Ecosystem — Every healthy category has a healthy ecosystem around it. The players include third-party developers, consultants who help companies adopt your product, stores that carry a consumer product, analysts, data or content providers, partners of all stripes, and even competitors.

Steps of Mobilization

Step 1: Who? 1. The CEO. 2. Lightning Strike Master Controller

Step 2: Set the Lightning Strike in Motion — What event 3–6 months out to hijack. What will the strike deliver?

Step 3: Mobilize Everyone — Once you know what the lightning strike will deliver, decide what every part of the company has to do to make it happen.

Step 4: Create the Four Mobilization Documents — You are designing a product, company, and category at the same time. This is how you design the category — by making it explicit in

1. category blueprint
2. product taxonomy
3. use cases, and
4. ecosystem documents

Step 5: See if the Suit Fits —Mobilization is the phase where truth lives. No one can hide. No problem can be buried. The bare realities of what the company can accomplish become absolutely evident. The CEO needs to pay attention to those signals — and, critically, be self-aware enough to know whether she herself can pull off a category king strategy.

Step 6: Watch for Trouble — be on the lookout for trouble and communicate with every party. If you get push back double down on evangelizing the category strategy.

Step 7: Get’er Done — The biggest challenge is getting everyone to the moment of the lightning strike so everything is in place and works as it should. It requires smart management and hard work.

Marketing: Conditioning the Market To Welcome Your Pirate Invasion

Lightning Strikes

A great lightning strike is a category-defining event. It evangelizes a new problem or an old problem that can be solved in a new way. It tells the world that this company — the one initiating the strike — knows how to define the problem and knows how to solve it. It makes potential customers believe that the company has the solution, and makes would-be competitors panic and call emergency board meetings.

A strike is an event or coordinated series of events in a small window of time.

Category kings need to establish different, not just better.

Why a Lightning Strike

So many companies and so many products and services get unleashed on the public and compete for space in our brains. If a company can win a little slice of brain space, it succeeds. If it doesn’t, it’s finished. One way to get shelf space in the brain is to do something so big and audacious, it gets the target audience’s attention and establishes a thought that goes like this: “That company understands my problem better than any other, and must have the solution.”

That’s the simple argument for a lightning strike. You’ve got to do something to cut through the noise and get into people’s brains. It’s true for enterprise-facing companies that need to reach business buyers, and it’s true for consumer-facing companies that have to broadcast to the masses.

What Content?

There are two requirements.

1. The first is that the content has to be big, bold, and different enough to cut through the noise and reach the brains of the target audience.
2. The second requirement for content is that it has to evangelize the category problem first and your product or service second. The problem is the key that unlocks your target audience’s minds.

Steps to Strikes, Hijacks, and Attention Grabbing

Step 1: Who? 1. CEO 2. Strike Master Controller 3. Strike Leader 4. Chief Hijacker. 5. Event Planner

Step 2: Plan the Big Strike — Strike Leader coordinates the event itself. Deadlines, expectations, outcomes, goals.

Step 3: Plant the Event — venue, attendance, logistics.

Step 4: Codify the Documents — While working on category design, you would have produced a boatload of material — the POV, blueprint, ecosystem and so on. Now that work has to be transferred into print and infused into everything the company presents.

Step 5: Go Time — execute, hijack, adapt, sell

Step 6: Evaluate and Keep Going — Look for signs of your strike’s impact on competitors and pour gas on those fires. Look for the dent in the universe and keep pounding.

Part III: The Enduring Category King

The Flywheel: From Category King to Legendary King

This is the part about domination.

A flywheel can be the most powerful force in business. Get it started by employing category design. Guide it with a POV. Power it with lightning strikes and mobilizations. Grow it by expanding the category potential. Do all of that, and a company will increase its odds of becoming not just a category king, but a legendary category king that alters everyday life and work.

Flywheel Foundation

The foundation of a flywheel is made up of the three elements we described early in the book: company design, product design, and category design. If all three are strong and working in synch, they reinforce one another and create a compounding effect on both the company and market. Since a good category king designs all three at the same time, it designs a category that’s a perfect fit for the products it offers and the kind of company it operates — giving the king a natural and unshakable advantage.

Investors and the Flywheel

A company’s value is rooted in its category.

1. First comes category potential. Investors need to believe that a company is in a category with great untapped potential, and if so, the investors will pay for access to that category.
2. Next is the company’s position within that category. The category king, as we’ve said, will eat up the majority of a category’s economics, so investors want to put their money in the king.
3. Finally, there’s performance or execution. These are results — maybe sales or user growth — that show that a company is effectively delivering products or services that the category desires. When category potential, position in the category, and execution all come together in investors’ minds, they see the future and want a piece of it.

Flywheel Fuel

1. To keep the flywheel spinning true and not flying off its axis, a king needs a strong POV.
2. A constant beat of mobilizations and lightning strikes acts as the force that throws the flywheel into a stronger and more unrelenting, compounding spin.
3. A category king builds an ecosystem, and the ecosystem in turn adds momentum to the flywheel.
4. Money helps fuel the flywheel’s energy
5. Data is an increasingly important element in accelerating the flywheel
6. Talent fuels the flywheel. The best people want to work for a king.

Flywheel Steps

Step One: Who? The CEO or founder —The flywheel involves every aspect of the company and ecosystem, and only the CEO has the sight lines and influence to put all those pieces together. Similarly, only the CEO or equivalent leader can drive an expansion of category potential.

Step Two: Recommit to Category Design If you’ve succeeded at category design and made yourself category king, the flywheel will take care of itself. If you’re running out of category potential and need to expand it in a meaningful way, then it’s time for your company to go back to the start of this book and go through category design once again.

Step Three: Figure Out Whether You’re Done If you’re a category designer and you’ve built a king, you have a decision to make. You can either re-up on category design, or you can harvest the current category potential for all it’s worth.

Step Four: The Double-Secret Other Choice This would be the path to creating a rare continuous category creation machine.

The Corporate Chapter: The Rare Art of Continuous Category Design

The odds of a start-up becoming a billion-dollar category king are better than the odds of a new product from a big old corporation creating a new category and succeeding over the long term.

So unless you are a rare company capable of continuous category design, it is better to let someone else create the category.

Continuous Category Creation Steps

Step 1: Who? The CEO

Step 2: Condition Investors — You’re going to need the support of investors that understand category creation.

Step 3: Take Advantage of Time — 6–10 year window to become king. Larger competitors have time, start-ups don’t.

Understand how important time is. It takes a long time to invent new materials. We build that knowledge, then the skills in our people, then we’re able to use that knowledge to attack other markets. It’s way more knowledge-efficient.

Step 4: Listen for Different, Not Just Better

Clayton Chistensen pointed out in Innovator’s Dilemma, listening to customers leads you to constantly build better, but never to build different.

Listen to customers so that you understand what the root problem is rather than just doing the solution, because if we just do what we’re told, they wouldn’t need us, and if they didn’t need us, we wouldn’t be able to generate the kind of profitability and competitive advantage that it takes to define a category.

You’ve got to make sure you’re on the creative side of creative destruction. Because if you aren’t, you’ll ultimately end as a company

Step 5: Category Design — When you discover a new category, work up its POV, develop its blueprint and ecosystem, set up a lightning strike, mobile, and get its flywheel spinning.

Step 6: Don’t Kid Yourself — Creating an underfunded, halfhearted product in the new category while protecting the profits of the old product is the definition of kidding yourself.

Step 7: Manage the Category Portfolio — Know the stage of each category in the portfolio and strategize accordingly. Debate openly.

How You Can Play Bigger

You can position yourself, or you can be positioned

Category Design of Life

1. Category is the Strategy — If you articulate the problem well, people will assume you know how to solve it. If you build a reputation as the go-to person to solve a particular problem, you will be much more in demand than the runner-ups.
2. Fund your Category — Consider your skills and knowledge, and look for a unfulfilled need for it. If you don’t have the abilities to solve it, go get them. Always remember different versus better. When you seek better, you are moving into someone else’s territory, always fighting for attention and having to prove that you’re better.
3. Design Three Legs of the Barstool at Once — Design yourself, what you can do, and your category together. Your value — however you want to measure it — is influenced by the potential market for what you do, your position in that market, and proof that you can deliver on your promise.
4. Develop a Point of View — Your POV defined what type of person you are, what makes you different, and why people should care. And if you live your POV, it will attract the right people into your life, and repel the wrong people from your life.
5. Condition the Market — A report to key superiors, or a presentation to colleagues, or the way you present yourself on LinkedIn or Twitter. After all, you’re trying to rearrange synapses in people’s brains so they can’t help but see the problem you define, and think of you as its solution.
6. Design An Ecosystem — People need ecosystems, too. Individual category kings are good at building a community of supports, followers, partners, and colleagues. Do it purposefully.
7. Fire up a Lightning Strike — Deadlines make things happen
8. Establish Yourself, then Expand Your Category — Legendary category kings constantly look for ways to expand their categories, increasing their category potential. This is how you grow, open up new opportunities, and generate more demand for yourself.