category design cognitive biases

Our brains are naturally wired to categorize things in our life. As you’re creating a new category in the marketplace, it’s important to shift your customer’s mindsets to think of your product or service as an industry leader. In this section, you’ll learn how to develop a consistent and focused effort to expose your new category to gain traction and investors.

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


So we still, we're asking the question of, "But why is that happening? Why do those timeframes make sense?" And that led us to brain science of all things and I had a role in this because this is a book that I wrote, it came out in 2011, that was about the intersection of brain science and computer science and how those two fields were learning from each other.

And by doing this book, it plugged me into the neuroscience community and of course we were we were big fans of Daniel Kahneman's book, "Thinking, Fast and Slow," which is all about our brains and how they work and the biases that we have inside of our brains. And so I took the data and the research we had done to a few of my neuroscience friends and said like, "What does this mean to you? Does this map to anything that you understand?" And they said, "Absolutely, it does."

And they started talking to us about the cognitive biases in our brains and cognitive biases are these things that our brains that make us make decisions that are not based on logic. We actually don't make decisions based on facts. We can make decisions based on these biases that get embedded in our brains. And there's all sorts of, there's some 50 of them, you know, like one is the choice supportive bias, which just means that if you buy a particular product, you tend to think it's the best product because you are so smart because you bought it.

It's just out of a flywheel that goes around and groupthink is what it sounds like. We tend to be influenced by what people think around us and these biases influence our decisions in a very, very meaningful way. So there's another aspect of things that the neuroscience talking to us about, and this leads us back to some of the category conversation, that when there's too much choice, when there's a lot of stuff out there, our brains categorize things. And that's why, for instance, when you go in the grocery store, it's not arranged alphabetically. It's arranged by categories because that's how you think and you wanna go in and you wanna find the spaghetti sauce and you go to the aisle where the spaghetti sauce is. And then you make the choice out of a bunch of things that are on the shelf.

Interestingly, in business, a line item on a budget is essentially a category. And that's how, again, we think when we run a company. Okay, I know I need some public relations for my company. And then you think, "What's the company that's the most, you know, the dominant one or the one that is most important for me to engage in that category?" So a winning category strategy actually creates a new line item if you're a B2B company. Creates a new line item on somebody's budget.

So when we create these categories in our minds and our biases tend to put one or two category kings in that space. When you go to the spaghetti sauce aisle, you probably think there's a spaghetti sauce that you think is the best one or the best value for you to buy and it's already in your brain. You're not gonna go there every time and stare at every one and read the ingredients and look at the prices and decide which one to buy. And here's some, just some categories that would pretty obviously have category kings in and they established themselves in our minds as those kings.

And yeah, so once we have those, establishes those winners in categories, those biases tend to keep them there. So what that all comes back to is the idea that if you're a CEO of a company, one of your jobs is to actually exploit these brain shortcuts. It's actually to condition our minds in and make us have those biases in our brains.

So that you can be seen as this category king and embed in people's brains and the back end of this that we got as we talked to the neuroscience folks is that it takes sustained effort. It's not something that happens with one TV commercial on a Super Bowl. It happens by over and over, and emphasizing that particular product in that brand and convincing people that that space exists and that you're the king in it.

And if you think of the bell curve of the population, you're gonna capture some of those early adopters, you know, those first few couple of years, but what happens is that to get to the heart and the meat of the bell curve of what you're trying to influence actually takes that sustained effort over some, you know, six to 10 years. And that's why we end up with these kinds of timeframes that set teeth. Tend to work for any industry, any consumer products, business-to-business products. It seems to be, this is how fast the majority of people's minds can move.