Start Unlocking Breakthrough Ideas With These 2 Category Design Tools

All writers, entrepreneurs, and creators must be able to discover and recognize breakthrough ideas.

The question is — how do you set out to uncover the next great opportunity? I recommend playing something called The Breakthrough Game and using the specialized Category Design Scorecard to recognize what works.

Together, these tools can help you move the world from the way it is, to the way you want it to be.

1. The Breakthrough Game

In 1895, The Campbell Soup Company had a breakthrough.

Campbell’s — and a chemist within the company named John T. Dorrance — came up with a radically different idea.

Canning was a popular method for sealing food. And while soup was cheap to make (its primary ingredient being water), it was still heavy and expensive to ship. Dorrance realized that if Campbell’s halved the water in each can, the business could produce and ship exponentially more soup. Simultaneously, the company could drop the price of a can of soup from 30 cents to 10 cents, expanding both their distribution and lowering the barrier to entry for new customers in a way no other food production company had been able to.

As a result, Campbell’s invented the “condensed soup” category.

If you are a creator with an idea, an executive running a company, or an investor betting on the future, how can you do what Campbell’s did, today?

You can start with The Breakthrough Game.

Imagine for a moment you’ve just been fired from your company — whether it be a global enterprise or a garage startup. No one is hiring. You have a kid on the way. And your only option is to create a new and different future for yourself. Your mission is to create a new category or redesign the existing category such that you put your old employer out of business and you win.

To facilitate a powerful breakthrough brainstorming session, work through these 8 questions in order:

  1. What does our business look like today? What’s happening in the world, and how might we expect the future to play out?
  2. What business models do we believe will be most successful ten or twenty years from now?
  3. What products will the world want based on all the new tailwinds in today’s economy?
  4. What new category could we create that would inherently leave the old category to die?
  5. What new and different future can we invest in that would fundamentally change the trajectory of our category and business?
  6. What different future would crush your “old employer’s” category?
  7. What are the 3–5 future scenarios that incorporate all of the above?
  8. What must be true to believe in each scenario?

(See an in-depth example of how we Category Pirates work through these questions for an up-and-coming category.)

But 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.

2. The Category Design Scorecard

The Category Design Scorecard gives you a good sense of how relevant you or your company will be 10 years from now.

I created this scorecard with Category Pirates 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

Companies tend to cluster into 3 buckets:

  1. Be The Winner: These companies believe strategy = competition. (Think: Xerox. Delta Airlines. Ford.)
  2. 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.)
  3. Be Different: These companies are the true category designers that end up writing or rewriting the rules of the game. (Think: Tesla. Airbnb. Picasso.)

Using The Category Design Scorecard, companies on the Fortune 100 Fastest Growing list fell into three groups.

  • 60% of companies on the list scored 0 to 2, and were much more focused on “beating the competition” than innovating or creating something entirely new. These “compete to win” companies fight for existing market share.
  • 20% of the companies scored 3 to 5, and were more focused on “being the best” within an existing category — not “being the leader” of a new category.
  • The final 20% of the companies scored 6 to 10, and were companies clearly trying to design/create a new and meaningfully different category.

What was striking to discover, however, was the three-year stock price growth for each of these types.

To see the results and learn how to score companies, dive in to The Category Design Scorecard.