Play Bigger: How rebels and innovators create new categories and dominate markets
“The most exciting companies create…They don’t sell us better. The most exciting companies sell us different. They make what came before seem outdated, clunky, inefficient, costly or painful.”
When Clarence Birdseye invented quick freezing in 1925 he didn’t just invent a method for preserving food, he had to design and build the entire product category. The Birds Eye brand has dominated the frozen food market since but to become a category king Clarence first had to develop freezer cars for railroads, enthuse rail operators about the idea, develop freezer cases for grocers and convince retailers that frozen food would increase sales. He even convinced DuPont to invent cellophane, and his advertisements positioned frozen food as different, not just better than canned food.
The authors of Play Bigger – three founders of a Silicon Valley category design consultancy firm – and tech journalist Kevin Maney, have researched legendary category-creating companies like Birdseye to help entrepreneurs, corporates and even individuals position themselves or their products and services differently.
They believe that winning isn’t about beating the competition at the old game. It’s about inventing a whole new game—defining a new market category, developing it, and dominating it over time.
Their advice on how to discover a category includes:
- Can you explain to me like a five year old what problem you’re trying to solve?
- If your company solves this problem perfectly, what category are you in?
- If you win 85% of that category, what’s the size of your category potential?
Once a company wins a position as category king, a flywheel of benefits opens a gap between the leader and the rest. For example, the leader will increasingly have the best data, the best employees want to work for the category king, the best investors will want to put money in which means the company will have the wherewithal to make acquisitions to vault it even further ahead. Apple took 93 per cent of the industry’s total smartphone profits and Fitbit has taken 68% of the category share – the wealth goes to the kings. A second place player may get a share of the economics but the rest of the players get relegated.
- Being first to a category doesn’t necessarily mean you will be a category king if you don’t define and develop the category. Apple didn’t invent any of the categories it came to dominate, Facebook wasn’t the first social network and Tesla didn’t make the first electric car. But they all made something different from what came before, and built a category that pulled in customers and made them desire the product
- Salesforce’s cloud computing is a great example of conditioning the market to accept your vision. CEO Marc Benioff started by briefing journalists about why Siebel – the existing market leader in Customer Relationship Management (CRM) – was too costly and becoming a real problem for companies. At the time, companies would never have trusted their data to a cloud, but Benioff kept talking to journalists about the ‘End of software’, which became the company’s mantra and an ongoing campaign. His definition of the problem that only he could solve would see his company eventually be valued at $48 billion – eight times more than his original rival Siebel. Salesforce won because once people could see the problem they couldn’t unsee it
- Consumers are overwhelmed by the number of products available to buy. It becomes much easier for consumers to think about what problem they want to solve. And once we understand the problem it is too much effort for people to do lots of research so it is easier to just pick the leader of that category
- Category kings can’t be dethroned by something that is simply better. Cognitive bias means that once we’ve committed to a product we’re likely to feel certain it is the best even when something better comes along
- The authors’ research has shown that the sweet spot for going public/IPO is when a company is between six and ten years old, which coincides with when the category is most likely to explode – six to ten years after launch. Being crowned a category king will take patience
The authors believe that category is the new strategy – that you can create your own markets and not be the victim of market forces. If you can be the company that changes the way people think, people will see your company as the category king, and you will win the majority of customers. The key question is, what’s your problem?
About the authors
Al Ramadan, Dave Peterson and Christopher Lochhead are the founders of Play Bigger, a thriving Silicon Valley category design firm. After being involved in many successful (and unsuccessful) companies they now prefer to do business from Christopher’s house in California, working in bare feet and board shorts. Kevin Maney is a best-selling author and award-winning columnist and has teamed up the Play Bigger founders to explain category design and how to do it effectively to help others. Maney writes weekly about technology and society for Newsweek and has contributed to Fortune, The Atlantic, Fast Company and ABC News.
“Every entrepreneur looking to alter the landscape and every CEO looking to reimagine their business can learn from this book. Play Bigger provides inspiration and a framework for building companies that transcend gravity.” Marc Benioff, Chairman and CEO, Salesforce
“Play Bigger is the new how-to guide for entrepreneurs and executives who want to build legendary, enduring companies.” Jim Goetz, Partner, Sequoia Capital
“Business leaders of the future need to create movements with passionate employees and fans that change the world’s point of view, not just companies with employees that sell products. Play Bigger shows how category design is the roadmap for making this happen.” Mike Maples, Founding Partner, Floodgate
Author: Kevin Maney