Category design is a business strategy that helps companies develop and dominate a specific category of products or services. It helps companies synchronize three key aspects: product, company, and category design. But more importantly, it’s the secret to uncontainable, borderline incomprehensible business growth.
The good news?
Category design is not a strategy reserved for billion-dollar companies or high-growth startups.
Some of the most legendary category designers are solopreneurs, small business owners, and consultants. who have niched down, leveled up, and carved out a category of one. As a result, they have no (or little) competition. This means they’re in demand, they set the price status quo, they attract the most loyal customers, and they win the majority market share of the entire category.
And they monetize and monopolize to become the Category King.
Whether you’re new to category design or looking for inspiration, it’s important to know the demand for category designers is growing exponentially. In this guide, we’ll share our crow’s nest view of category design, why it’s important, specific category design examples, and the essential frameworks you need to apply category design.
The definition of category design is simple: It’s about developing a unique point of view that lets you niche down and get more specific about your offering to attract customers, who then evangelize your offering and turn you into the Category King.
But to implement category design, you have to ask hard questions.
Why are you niching down?
What problem are you determined to solve in the world?
Who do you want to help?
Who do you not want to help?
Why is it so important to you? And why is it so important to the people you want to help?
What will life be like on the other side?
These answers are the key to effective category design—and enjoying a life where you have no competition.
What is category design? Category design is the process of developing and dominating a specific category of products or services by synchronizing the Magic Triangle of product, company, and category design. The goal is to become known for a niche you own, build a loyal following of Superconsumers, and dominate the majority of market share, which makes it impossible for someone else to “do what you do.
The term “category design” became part of the mainstream marketing conversation thanks to the 2016 book Play Bigger by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney. The book shares how companies that create new categories of products or services, instead of competing in existing markets, find the most success.
Done effectively, category design erodes the competition.
Why Is Category Design Important?
Category design introduces the world to new ways of living, working, and playing.
Companies that create new categories, or successfully redesign existing categories, are the ones that ultimately change the world. Along the way, they create exponentially more value for both shareholders and the entire market.
Category designers are people and companies that move the world from the way it is, to the way they think it should be.
Think: Airbnb, Uber, Tesla, Netflix, Microsoft, Spanx, Apple, and Google
They do this by solving a problem people didn’t know they had. Or by reimagining a known problem—and then creating the potential for a radically different solution. Most of all, they create (and subsequently capture) the exponential new value generated by an ecosystem of employees, customers, partners, investors, and communities.
But the single greatest benefit of category design: Anyone can do it, at any stage of their life.
Let’s look at examples that highlight the power of category design.
Category Design Examples
New categories are created, dominated, and neglected every day. Here are a few of our favorite examples of category design:
1. Keurig: “Single-serve coffee”
Keurig is not a cup of coffee from a coffee pot/shop. It's a single-serve coffee maker that brews your own personal cup of coffee, based on the K-Cup flavor you choose.
Between 1997 and 2017, Keurig unlocked billions in value by providing consumers with an amazing bundle of consistency, speed, and variety. But behind that bundle was the amazing observation that in a multi-coffee drinking household or workplace, someone was compromising the ideal type of coffee they really loved. They were shackled by the single pot of coffee.
Keurig gave consumers variety, choice, and agency.
DoorDash started as a local food delivery service in Palo Alto, California.
Today, it’s an international Category King that operates in more than 7,000 cities across the United States, Canada, Australia, and Japan. In 2012, the four co-founders—Tony Xu, Stanley Tang, Andy Fang, and Evan Moore—realized small business owners struggled with deliveries. After setting up a delivery service catering to Stanford students, they began convincing restaurants to try the service.
Tesla’s products not only fit the company’s mission—but they also fit a specific sustainable energy need.
That’s why the company promotes “electric vehicles” and, more broadly, “sustainable energy” (the category) over Tesla the “brand.” Like all category designers, the company and product do not fit into old boxes. They are new. They are different. They cannot be compared to what came before.
Once you go Tesla, you don’t go back.
Category Design Frameworks
Every Category King relies on core category design frameworks to design and dominate its niche.
The Magic Triangle & Data Flywheel
A Unique Point of View
8 Category Levers
The Category Design Scorecard
If you don’t implement these frameworks, no amount of product-tweaking, business-model-banging, or million-dollar-marketing will make a difference.
So here’s how each one works.
The Magic Triangle + Data Flywheel
The Magic Triangle is the combination of product design, company design, and category design—each side with equal importance, ideally executed at the same time.
Product Design: The purposeful building of a product and experience that solves the problem the category needs solved. The goal here is “product/category fit.”
Company Design: The purposeful creation of a business model and an organization with a culture and point of view that fits with the new category. The goal here is to engineer the right business model and missionary team for the problem you are looking to solve.
Category Design: 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. This is about teaching the world to abandon the old and embrace the new.
If you successfully prosecute all three sides of The Magic Triangle, you will unlock a company’s most valuable asset: your data flywheel.
The data in your flywheel is the culmination of insights you capture from your category, customers, competition, and your opportunistic lens on how to best use those insights to expand your category, create a new category, and/or partner with other companies.
And once you start capturing data, your flywheel goes round and round.
A breakthrough product, combined with an innovative business model, framed within a new and different future for the customer/consumer/user has the highest likelihood of becoming a Category King or Queen.
Once a Category Queen is established, data accumulation creates an “unfair advantage” for the company.
This “unfair advantage” means the Category King or Queen is best positioned to take advantage of the next “category creation” opportunity.
When entrepreneurs successfully prosecute the Magic Triangle and Data Flywheel, they change the world.
But changing the world means changing how people think.
Languaging is the strategic use of language to create distinctions between old and new, same and different. And it involves Framing, Naming, and Claiming all of the following:
A category/niche: “What’s the new and different market that we want to become known for?”
A POV: “What do we stand for that’s different than everyone else? How can we move people’s thinking FROM the way the world used to be (old category) TO the way we believe the world can be (new category)?”
And messaging: “What are all the different ways we can communicate our POV, to who, when, and why, such that they take action?”
Languaging is an essential component of category design because if you can’t write about what you’re thinking, then you aren’t thinking clearly. And if you aren’t thinking clearly, then how are you going to change the way the reader, customer, consumer, or user thinks?
Here’s how Category Designers have used Languaging to change people’s perceptions.
Sara Blakely invented “Spanx,” not better shapewear.
Henry Ford called the first vehicle a “horseless carriage,” not a faster horse.
Airbnb lets you “live anywhere,” not just book a place to stay.
If done well, Languaging has the potential to reflect the unspoken qualities of your category point of view.
Point Of View
Unique POVs move the world from the way it is to a new, different way of doing things.
Why did hotels sue Airbnb, calling them “illegal hotels”? Because Airbnb’s POV changed the premise.
In order to change the world and unlock exponential breakthroughs, you must use category design to reject the premise with a unique POV.
When Languaging is executed successfully, and is reflective of a well-defined POV of the category, two things happen. First, you become known for the new language you’ve invented. And then, customers don’t see you as “better.” They see you as different.
Legendary POVs have a simple architecture.
Frame a different problem/opportunity.
Evangelize a different future.
Show customers how your “solution” bridges the gap from the problem/opportunity to the different future.
Most importantly, the company that evangelizes the POV is immediately viewed as the leader.
But to become (and stay) the Category King, you need to apply the 8 category levers.
The goal is to achieve radical differentiation by implementing category design thinking on a 360-degree level. Within each one of these levers, we encourage you to apply the Category Design Scorecard to evaluate how well you are scoring in all 5 areas of the scorecard for that particular lever.
Lever 1: Radically Different Benefit (For A Radically Different Problem). Companies that fall in love with solving new, different problems, or successfully reframe existing problems in new and different ways, are the ones with the most clarity about the benefit(s) of providing a solution.
Lever 2: Radically Different Brand. Mercenary brands (like American Airlines or Comcast) only care about their own prosperity and well-being. Missionary brands (like CarMax or Progressive Insurance) evangelize a broader category problem that, when fixed, creates a rising tide that lifts all boats.
Lever 3: Radically Different Experience. Tesla is the king of this. They’ve removed virtually every pain point of the car-buying process by bringing the car to you and allowing you to buy it on your phone. And as Elon Musk has said, Teslas are “the most fun thing you can buy.”
Lever 4: Radically Different Price. Price should always be a reflection of the Value (V) you are able to provide when the Benefits (B) are divided by the Price (P). Instead of looking at how much your competition thinks their product is worth, ask, “Who are our Superconsumers, and what does our price say about them?”
Lever 5: Radically Different Manufacturing. Category Designers ask questions like, “What manufacturing approach should we invest in that will empower our design and domination of a giant category that matters?” and “What’s a problem most people can’t see, that if we solved would make a massive difference?”
Lever 6: Radically Different Distribution. Radically different distribution means turning what most companies consider a “cost” into a revenue-generating point of leverage. OnlyFans does this by allowing creators to share in the upside generated by the other creators they bring to the platform.
Lever 7: Radically Different Marketing. When people see a company marketing the category (not their product), they assume the company doing the marketing is the category leader. These companies are betting on the world, specifically the category they are creating or re-designing, being different.
Lever 8: Radically Different Profit Model. This may be the most powerful way to differentiate. Can any retailer compete with Amazon? No, because they don’t have AWS. Can any coffee shop compete with Starbucks? No, because Starbucks created a financial services profit model via its app.
The more levers you push and pull, the further you distance yourself from any and all competition.
Because you don’t do what they do. You’re different. You’ve forced a choice.
So there is no comparison.
Lighting Strike Marketing Event
Annual marketing planning is usually about as fun and productive as getting hit with a hockey puck in the privates.
A major problem with marketing plans is most of them start with last year’s plan as the template. But legendary plans are about creating a different future, not continuing the past. To create a legendary marketing strategy, you need a Lightning Strike.
Every Lighting Strike has 3 pillars: Information Wars, Air Wars, and Ground Wars
The Information War: The war for who frames the problem, names and claims the solution, and owns the narrative. It’s the combination of ways in which you educate the world about the category you’re designing AND learn from your Superconsumers to accelerate your effectiveness both in the air and on the ground. These efforts are often focused on POV marketing/word of mouth.
The Air War: The war for who is able to most effectively “sell” a narrative at scale. This is the high-level strategic marketing you do in service of the new and different category you are creating in the world, all the while positioning yourself as the leader. These efforts are more focused on demand creation.
The Ground War: The war for who can best convert new recruits to the effort—prospect to prospect, customer to customer, consumer to consumer, and thus make the cash register sing. This is tactical marketing that supports your strategic efforts in marketing the category and driving near-term revenue. These efforts are more focused on demand capture and lead generation.
The goal is to make it feel as though your company has “taken over” for a small window of time.
This requires you to invest 70% of your total budget on 2-4 Lightning Strikes per year. But a Lightning Strike is not an effort to try to market to “everybody.” You need to create the Comic-Con for your category—physically, virtually, whatever that means to you (and your Superconsumers).
The logic here is that it’s better to matter to your Superconsumers 2x per year for two days than to not-matter to everybody, forever.
The Category Design Scorecard
How do you know when you’re looking at a category creator versus just another high-growth company fighting for market share in an existing category?
The Category Design Scorecard will tell you.
We created this scorecard after reviewing companies from the Fortune 100 Fastest-Growing Companies list and analyzing their 10Ks, Annual Reports, Investor Presentations, and Investor Relations websites. Companies were scored in five key areas on a 0 to 2 scale: 0 being the company does not successfully accomplish each area’s goal, 1 being the company partially accomplishes the goal, and 2 being the company successfully accomplishes the goal.
Here’s a quick overview of each area:
(Area 1) Category POV: Does the company have a clear “Point of View” of their category?
(Area 2) Future Category Reimagined & Without Compromise: Does the company cast a compelling future—free of the fundamental problems, compromises, and trade-offs inherent to the category?
(Area 3) Radically Different Offer + Business Model: How does this new category get delivered to the customer, both through a breakthrough product/service/offer, but also through a breakthrough business model?
(Area 4) Data Flywheel: Does the company generate data about customer/consumer demand/preferences that creates a unique opportunity and advantage to anticipate the future of consumer demand and any category shifts?
(Area 5) Depth & Degree of Customer Outcomes: Does the company generate satisfied/ecstatic customers/consumers
After being scored, companies tend to cluster into 3 buckets.
Be The Winner: These companies believe strategy = competition. (Think: Xerox. Delta Airlines. Ford.) You can usually tell which companies are playing the “Be The Winner” game because they use words like most-trusted, longest-standing, customer-favorite, award-winning, etc.
Be The Best: These companies want to be seen in the market as having the best product or the best technology**.** (Think: Intel. Pepsi. Verizon.) You can spot these companies from a mile away because they literally say, “The best, fastest, cheapest, smartest…” before describing what they do or how they do it.
Be Different: These companies are the true category designers that end up writing or rewriting the rules of the game. (Think: Tesla. Airbnb. Picasso.) These are the true category designers—the companies that end up writing or rewriting the rules of the game.
“Be Different” companies care deeply about the category POV/problem and are committed to creating a different future.
As a result, they become exponentially valuable and drive all the “Be The Winner” and “Be The Best” companies either out of business or out of relevance.
Benefits Of Effective Category Design
You create a new and different category that captures, on average, 76% of the market share, rather than competing for a 24% sliver.
You develop a unique POV and use it to change the way people “think” by educating them on the value of your new and different category.
You win the Superconsumers, who, on average, spend 3-7x more than average consumers.
You capture two-thirds of your category’s economics to become the Category King/Queen.
You adopt a system (the Data Flywheel) that accurately predicts the future so you can continue to design and dominate the category.
Now that you know the benefits of effective category design, let’s dive into the best resources you can use to learn more about it.
Best Category Design Resources
Category design is a relatively “new” category of marketing, but we’re beginning to see more interest from marketers, entrepreneurs, creators, executives, and investors who are realizing its power.
There aren’t a ton of resources available to learn the fundamentals of category design. But this blog, and the resources we share below, are a great place to begin.
Category Pirates is the authority on Category Creation and Category Design. Every week, we publish newsletters and mini-books for the radically different—who want to see, design, and claim the future through category design.
Category Pirates Blog shares free resources on category design fundamentals and frameworks, with examples from companies that succeeded (and failed) at becoming Category Kings.
Play Bigger is the breakthrough book on category design that explains how to invent a whole new game—define a new market category, develop it, and dominate it over time.
The Category Design Toolkit, by Category Pirates walks readers through 15 absolutely mind-altering frameworks for how to see business, life, and the way people organize information into "categories" in their minds.
A Marketer’s Guide To Category Design, by Category Pirates is for any marketer, entrepreneur, or executive who wants to approach marketing through a category lens and establish themselves as the category leader.
Positioning: The Battle for Your Mind, by Al Reis and Jack Trout shares why companies need to intentionally shape the way buyers think about their products by creating a “position” in the buyer’s mind.
The 22 Immutable Laws of Marketing, by Al Reis and Jack Trout is a must-read for marketers who want to become a Category King because it shares how to launch and maintain a winning category.
Crossing the Chasm, by Geoffrey Moore explains how to introduce products to the larger market, and the specific path companies must follow to introduce new concepts to the masses.
The Innovator’s Dilemma, by Clayton Christensen details why companies miss out on new waves of innovation, especially when they try to be “better” versions of what came before.
Christopher Lochhead’s blog is chock-full of educational category design resources, including podcasts, mini-books, and blog posts that highlight his decades of experience. (FYI, he’s also a co-author of Play Bigger and one of our very own Category Pirates.)
Lochhead on Marketing is a podcast by Christopher Lochhead that examines the mindset and strategies required to win at category design, featuring lessons from marketing legends and conversations with marketers who “think different.”
The 7-Day Category Accelerator is a free email course by Category Pirates designed to help anyone interested in category design learn the basics and achieve radically different outcomes for yourself and your business.
Top Category Designers To Follow On Twitter And LinkedIn
As category design makes its way to mainstream business strategy, resources are popping up on sites like Twitter and LinkedIn. Here's some inspiration from a few of the greatest category designers to follow on both platforms today.
Christopher Lochhead is a Category Pirate, as well as a 3x CMO, a #1 Apple business podcaster, and a #1 Amazon marketing author. Christopher's first book, Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets, has been called “the bible of category design” and is in the top 1% of business books.
Eddie Yoon is a Category Pirate and has written more on Category Creation & Design than any person living or dead for The Harvard Business Review. He is the author of the breakthrough bestseller Superconsumers: A Simple, Speedy, and Sustainable Path to Superior Growth. He also runs a think tank and advisory firm on growth strategy, called EddieWouldGrow.
Nicolas Cole is a Category Pirate, as well as an author, viral writer, ghostwriter, serial entrepreneur, and one of the most-read writers on the Internet. He is the co-creator of the largest cohort-based writing course online, Ship 30 for 30, as well as the author of the best-selling book, The Art & Business of Online Writing. To date, his work has accumulated over half a billion views.
A number of legendary Category Designers team up at Play Bigger to help companies solve category problems and create a unique point of view. Follow anyone on the team to discover how to dominate a category. Currently, this includes:
Category Design Advisors is led by co-founders Kevin Maney, co-author of Play Bigger, and Mike Damphousse—a veteran CEO and category designer. The CDA’s Resources page is packed with videos, blog posts, and books to help companies develop a strategy and a methodology to create a new category of business. The team currently includes:
John is the founder of Flag and Frontier, a consultancy and resource hub that helps executives in B2B tech pursue category design. Visit the company’s website for blog posts on the fundamentals of category design, or follow John on LinkedIn where he writes about web3, B2B marketing, category design, and marketing strategy.
Use Category Design To Become A Category King
The greatest entrepreneurs, executives, investors, creators, and even writers and artists apply category design to become Category Kings.
They don’t market themselves or their brand. They market the new category of “thing” they are creating in the world. They reject the premise. They imagine what’s possible.
And they create a different future.
By walking you through these fundamental principles of category design, our hope is that you’re ready to chart your own course and become a Category Designer. Because category design is how exponential net-new value gets created. It’s where it all begins.
And your success comes down to your ability to educate, evangelize, market, and ultimately monetize the category.