Category design online course

Developing a new category in your marketplace can generate valuable customer conversations about one’s product. In this section, you’ll learn how to establish your company as something different than what’s in the space that creates buzz.


To complete the exercise for this module at the Techstars Entrepreneur's Toolkit, click here.


So just to walk you through a little bit about on the back end, what category design, what category thinking can actually do for companies. This was a company called BigPanda, that's based out in Silicon Valley, and BigPanda was a very deep B2B business. It was basically making dashboards that data centers could use to correlate alerts that were coming in and sort them out. There's a bunch of other companies in the space.

They were about four years old, venture backed, and this is what their website looked like, and this was how they described what they do, automatically correlate your alerts, which didn't separate them from anybody else that was doing the same thing and didn't sound all that exciting. But they had a decent business in it and they had some realization as a company that because we were correlating alerts, we had this enormous amount of data coming through our system and they started to think, well, we could throw that through some machine learning algorithms and start to understand more about what was going on and maybe even start to automate the fixes, to some degree, without having any humans, having to touch it and they had all these big ideas, but they didn't quite know how to describe it, how to put it all together.

So we worked with them and pulled it out of them, and they all started to, you know, the concept and the missing spaces started to correlate in their brains and they ended up coming up with this idea of autonomous digital operations, and a way to establish themselves as something that seemed different in the marketplace. And, you know, the analysts started looking at them differently, the marketplace starts to look at 'em differently and it's a way to create essentially, at the start, one of the things it creates is, at least it creates a conversation. You know, they were able to go in and say, this is what we do. It's different from what everybody else is doing. Let's have a conversation about it and be able to tell you about it, and it's really kind of given them a whole new direction.

Now Sensity was a company that made led lights and they had this insight that Phillips and GE and everybody else who's making led lights have, which is that you've got a light and you can put some circuitry in there and some sensors and get some data and some information out of it and maybe do things like connect and have a smarter home kind of situation.

But they also realized that if you networked a lot of these things together you could collect an enormous amount of data and analyze it and the data would actually be more valuable than the lights. And so they came to this concept called light sensory networks, and really sold it more on as a data play than a light bulb play and know, went to like owners of malls for instance saying, if you put all these bulbs in and connect them together, you could collect all this data about the traffic going in and out or air quality or anything else you wanted to understand about what was going on around your business.

And that put them in a completely different bucket that made them look more like a tech company, a data company, a networking company, and about a year and a half later, what happened was they got bought by, not by GE or Philips at the valuation of a light bulb maker, they got bought by Verizon at a valuation of a technology company, of a data company of, of a machine learning company.