Ryan Carlson (ex-Wiz, Okta): Category Creation is Overrated
Blake Bartlett: Virtually every startup out there wants to create a category. The mentality makes sense. Startups think, " We're disrupting the old thing, so our new thing needs a name." But Ryan Carlson says this is often a mistake, or at least it's prioritized too early by many founders and marketers. The reason, as Ryan explains, is related to corporate budgets and initiatives and might be a little different than you expect.
Ryan Carlson: I'm a noted skeptic on category creation, not as a goal in and of itself but as a process that a lot of, I think, startups fall into. Category creation, for those who know the term, if you've created a category, your name is synonymous with the product or service and vice versa. And I don't use a search engine, I Google things. I don't go get a facial tissue, I use a Kleenex. Those are like your name for your product or company is synonymous with what that thing is. And the reason people want to create categories is because those are dominant. Those are very close to, like in many cases, businesses that look like monopolies are so dominant. And everybody knows them. Your name has become a verb. Like that is success. And so I think the reason I'm a skeptic on this is because I think people conflate the goal with the process to get there. If you're a brand new startup and your pitch to most people, again caveating this with enterprises, companies selling to other companies, B2B type products, if your pitch to every single prospect is, " We're not like anything you've ever used before, we're not like any other product or service you used before," guess who has an annual budget line item for things that didn't exist before? Nobody. Like you're basically making as an early stage startup your job much harder by adding friction to every single conversation. Now, in truth, everybody wants to be a category creator. If you started a company, you certainly have a view that you're better or different and game- changing compared to everything else. But in reality, you're probably a better version of an alternative. And that might just be you're not a better version of some other SaaS product. Maybe you're just better than the Excel model that somebody uses. But there's still an alternative. So I think early stage companies should focus on how they're better than the alternative. And the way you create a category is you win the market, you dominate, you win every customer, and then you get to call the category whatever you want. Winners get to write history. I think category creation is definitely a worthwhile goal. You should be thinking about it as a founder or as a CMO or anybody in marketing. What is our long term vision? That's where your vision comes in. But it shouldn't go all the way down to your homepage positions you as something unlike anything else. You need to make it easier for people to figure out how to use you, how to displace something else, even if it's not a product. Maybe it's a manual, a process they use. But you're better than something that they already do today. Otherwise, there's probably not much need. And then your vision and how you paint the picture for where you're taking the company long term, that's your category creation. Just don't unnecessarily make your job harder by telling every single person that you're unlike anything else at the beginning, even if you endeavor to be like that in the long run.
Every startup wants to create a category. This is often a mistake. Or at least it’s prioritized too early by many founders and marketers. Ryan Carlson, longtime CMO at Okta, explains why this falls flat with customers and what to do instead.
Mentioned in this episode:
Sign up for OpenView's weekly newsletter
Ryan Carlson, Chief Marketing and Strategy Officer at Wiz
Subscribe to Blake Bartlett on YouTube.
Podcast produced by OpenView.
View our blog for more context/inspiration.