It doesn’t matter if the industry is established or emerging, there’s an opportunity to start Category Design strategies anytime. In this section, you’ll learn how early-stage entrepreneurs have an edge on larger companies and gain market share by finding a new category in the space.

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Transcript

So the question is, when in a company's life cycle, does it make sense to do this or think this way? And the question is any time. And I could site all sorts of examples of any range of timeframe. Now, yes, Airbnb, 5-hour ENERGY, those were started by seeing a missing space, a category that could be created and developed a product to that category.

Big Panda, company that was four years old, already had done, essentially what the company was started to do and got to a point of being stuck. Like, where do we take this next? And that's a good time to do it. We just worked with TaskRabbit. I'm sure many of you know TaskRabbit. And TaskRabbit was 10 years old and pretty successful in what it had been doing, but it realized that it had kind of stalled.

It had done the same thing for 10 years, and knew that there was something still missing in the market and a bigger and better way to do what they were doing and make it seem and feel new again. And so, for them, that was a good time to do it. When IBM was 50 years old in 1964, when it introduced the System 360 computer, which was actually probably one of the greatest technology, category, it basically created the category of the mainframe in 1964, by introducing this radical line of computers and junking its entire product line that it already had. It was 50 years old at the time.

So, companies can do this at any time in their history. It's just, you know, and some companies are great at doing it over and over again, and some companies do it from the beginning. It could be any time. Yes. But basically, the question was, can a start up do this? First of all, a couple answers. Just from our experience, from what we have seen, as we've talked to companies over, you know, about this whole idea of category design. FinTech, healthcare, you name an industry that sounds difficult and established. It doesn't matter. There's new spaces and new opportunities in every single industry that's out there. I mean, we've seen it, we've seen companies come to us and have this experience.

And, you know, there's yeah, I mean, if you go into any established market, and say, we're gonna do, essentially what they're already doing, but just a little bit better, then yeah, you're fighting the big guys. If you go into an established market with something that feels completely new and different, you know, and as many of you, I'm sure have seen, when you're fighting a big corporation, an established company, they can't move that fast. They can't do these things oftentimes. And so, the startups actually, you know, take share away from them, by doing the things that they can't do, that they can't figure out. And can't, you know, manage to pull off right away. And as for a startup versus established company. Yes, when an established company sees a new space, they put all these resources behind it, but they also, it's also really hard for them to do this kind of.

Now Chrysler, the minivan story happened because Chrysler's back was against the wall. They could take a chance on a zero billion dollar market. Ford and General Motors at the time, had all the same demographic data, all the same, you know, capabilities, technology capabilities, manufacturing capabilities as Chrysler did at the time, they weren't willing to take a chance on it, on something like that, because they weren't desperate.

And so, what you often see with larger corporations, big companies, is that they're not willing to take those kinds of chances. They're more likely to try to incrementalize and just add, you know, be a little bit better at some particular category that exists. And what we tell companies, and Mike's gonna talk a little about this later with something we call suit size. If you create a suit that's way too big for you, and it's a brilliant category, what you're doing, is you're doing somebody else a favor, because you're not gonna be able to pull it off and somebody else is gonna see that and go, you know, Google's gonna say, "Oh, we could do that." And so, with this startup, we walked them back and you know, again, this is coming from them, it's us you know, helping pull it out of them. We're not telling them this, but walk them back to, what can you do that's on the path towards that? Keep that big thing in your pocket for now, but try to establish some you know, new category that takes you on a path to that bigger thing, and know that you're gonna take it in steps as you, you know, as you grow and get the capabilities.

But yeah, the suit size concept that Michael will talk about in this next session, is really important, because you can't, as a startup, do something that's so enormous that, you know, it's like trying to take over Google or something, it's not gonna happen. So, and one of the basic principles, it all comes back to the idea that, you know, companies that design a category and convince people that that's a category that they establish in people's minds and you're the king, you're in the best position to dominate it over time. And that's, you know, basically the concept of you know, the both play bigger, and you know, what we take companies through and try to work with them on. And so that's, you know, that's this first part of the presentation. And thank you very much.