Category Design For Entrepreneurs: How To Become A Category King

One of the most common questions we get asked by entrepreneurs is, “How do I create a category if I’m not a heavily funded startup or some massively successful company?

This question reveals maybe the single greatest benefit of category design for entrepreneurs:

Anyone can do it, at any stage of their life.

Category creation and category design is not a strategy reserved for multibillion-dollar companies or high-flying startups. And while money is often helpful, it is not a requirement. In fact, some of our favorite category designers are solopreneurs, small business owners, and consultants who have niched down, leveled up, and found a way to get themselves out of “the comparison game” and into a category of one. As a result, they have no (or little) competition.

They’re in demand, and they set the price.

As an entrepreneur, here’s how you can use category design to own your niche and become a Category King.

The Benefits Of Category Design For Entrepreneurs

As an entrepreneur, creating your own category is about:

• Framing a new & different problem
• Naming a new & different solution
• Claiming a new & different transformation

You do this by creating new and different solutions to problems you are experiencing. This solution becomes your mission, which is what inspires employees, customers, stakeholders, and investors to bet their time, money, and reputations on you—and get emotionally invested to a degree far beyond just personal profit. And, if you’re a missionary founder, your pursuit has more to do with the presence of a positive than the absence of a negative (competition).

If you successfully apply category design as an entrepreneur, you will become the Category King—and earn an average of 76% of the category’s total value while everyone else is left to fight over the remaining 24%.

You will also:

• Differentiate yourself from any and all competition through word choice, tone, and nuance.
• Speak to (and speak “like”) the customers you want to attract—especially the Superconsumers of the category.
• Establish a leadership position in the category you are designing or redesigning.
• Earn the loyalty of your Superconsumers, who can drive between 30% and 70% of sales, an even greater share of category profit, and 100% of the insights.
• Set the rules, standards, and prices for your category by capturing the majority of demand.
• Develop a data flywheel that generates data about customer/consumer demand/preferences, predicts where demand for your category will unfold next, and unlocks breakthrough ideas.

Now, let’s dive into how you can reap these benefits.

How Entrepreneurs Use Category Design To Develop A Unique POV

How you create a category for yourself as an entrepreneur is not just about niching down and getting more specific about your offering.

It’s about having a Point Of View.

• 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?

Without a POV, your niche is nothing but a small straw trying to suck the juice out of someone else’s coconut. But with a POV, you can grow your own coconut tree.

The smartest and most successful entrepreneurs live their POV.

They create what they create because it’s personal to them.

The problem they want to solve is something they’ve experienced (or deeply connect with). It’s personal and emotionally charged. It makes them angry, or upset. It frustrates them that other people don’t take it as seriously. Or, it greatly excites them. They see a giant new opportunity. They see a different future and they can’t help but be driven to create it. And they will stop at nothing to solve this problem in their own lives, first—helping many other people experiencing that same problem in their own lives as a result.

Here are a few examples of entrepreneurs who have developed a unique Point Of View using category design.

Examples Of Founders Who Live Their POV

• Brian Chesky, Co-Founder and CEO of Airbnb. At the start of 2022, Chesky announced “Starting today, I’m living on Airbnb.” Some people viewed this as a publicity stunt. But what we see is a founder, obsessed with a problem, on a mission to show the world what happens when you live in a new & different way.

• Jack O’Neill, inventor of the wetsuit and founder of O’Neill Surf Shop. O’Neill was a surfer who simply wanted to surf longer. So in 1952, he began selling his neoprene wetsuit invention out of a converted garage in Santa Cruz, CA.

• Reshma Saujani, Founder of Girls Who Code. Saujani started her career as an attorney and activist. When running for U.S. Congress in 2010, she realized the massive gender gap in computing classes at local schools. So she founded Girls Who Code to help close the gap and teach girls the skills they need to live successful, full lives.

• Joe De Sena, founder & creator of Death Race & Spartan Race. De Sena worked as a trader on Wall Street, so he used intense physical activity to counter the long work hours, lack and sleep, and city lifestyle. He began adventure racing and had an epiphany when he attempted the Iditarod (a 1,500km dog sled race in Alaska) on foot. Freezing in the cold, he made a distinction between ‘difficult’ situations and ‘desperate’ experience, which inspired him to create his own endurance races.

These founders claimed their POV to create something in the world that previously did not exist.

As an entrepreneur, the more new and “niche” opportunities you combine together, the more different you are and the more difficult it becomes for someone else to “do what you do.”

7 Ways To Niche Down As An Entrepreneur

The single greatest way to create a category of your own is to do something no one else does.

Here are seven questions to ask yourself as an entrepreneur (or solopreneur, small business owner, consultant, advisor, freelancer, etc.) to become known for a niche you own:

• WHAT do you do… that you are uniquely known for?
• WHO do you do it for… who are surprisingly willing to pay large premiums?
• WHEN do you do it… that sits at the peak intersection of Important and Urgent?
• WHERE do you do it… that if money were no object, everyone would want it?
• WHY do you do it… that is so in sync with the Superconsumer, word of mouth spreads like wildfire?
• What OUTCOME do you unlock… that is 100x more valuable than the price you charge?
• How much and “how” does it COST… that is both a value & a premium, and the ‘way you pay’ is a benefit in itself all at the same time?

“Niche down” opportunities combined with a Framed, Named, and Claimed unique and differentiated POV is the key to using category design to enjoy a life where you have no competition.

Because you’re in a category of one.