Enduring, impactful, high-growth companies give us something new — something that didn’t exist before. But if it didn’t exist before, the challenge is to create powerful demand.

That’s the ultimate key, right? Everything else you do as a company won’t matter unless there is demand for what you offer. You can build that great product, but if there’s no real market for it, the company will stall. Assemble a great team, push out a clever marketing campaign, convince investors to pump in a ton of money – none of it matters unless demand happens.

Inside a company, you can feel it when demand isn’t there. Selling becomes a grind. Good people get dissatisfied and leave. Valuation dips. You start to worry you’ll run out of money before getting traction.

Most company leaders understand that demand happens when a product satisfies the desire of a market. But many companies take that understanding and run the wrong way with it. They focus on building a product that fits into some existing category – the classic story of searching for product/market fit. They believe that a great product’s inherent value and user experience drive its adoption and expansion within the market and pulls the company along – what’s become known as product-led growth.

The Foundation for Demand Starts by Conditioning the Market

On a recent episode of our Category Thinkers podcast, Bill Macaitis, who was previously the CMO/CRO at Slack, talked about the need to start with the problem to be solved. “You see so many great tools coming out right now,” he told us. “The ones that succeed are the ones that are rooted in pain.” He went on to explain how the category strategy is the launch pad for a solid go-to-market strategy, “You have to have that solid foundation, you have to have really thought about what the category is, what it looks like. What are the pain points that you’re solving? You have to have the category-led approach.”

Too many companies treat “the market” like it’s the weather – it just exists and there’s nothing anyone can do to change it. Which is untrue. It is possible for a company to identify, design and develop a new market category so that the market demands your product. It’s taking control of the company’s fate instead of leaving the market to chance.

This is the core of strategic category design. If you focus on developing a market that will demand your product, you get something better than product/market fit – you get market/product fit. Instead of relying solely on demand capture tactics, market/product fit gets you something more powerful – category-led growth.

What does Category-led Growth Look Like in Practice?

Done well, category-led growth is a force multiplier for all of a company’s other efforts. Then when you build a great product, fire up a clever marketing campaign, or spin up that product-led growth motion, the strength of the category’s pull makes those efforts more fruitful.

To achieve success in category-led growth and effectively navigate the process of category design, businesses can follow several key tenets. These principles will establish your company as category leaders and drive sustainable growth:

Problem-Centric: Get into the minds of your target customers and understand their pain points. Then, articulate those problems in a way that makes people go, “Whoa, they get me!” Market the problem first, the category second, the solution third, and save the brand reveal for the end.

Category Creation: Break free from the crowd and create a brand new market category. Show the world your differentiating Point of View (POV) on the problem at hand. Be a pioneer, a trailblazer – force decisions, not comparisons.

Thought Leadership: Become the ultimate evangelist of your category. Shape the narrative and guide the market’s understanding. You’re the go-to expert, the category whisperer, and people will flock to you for wisdom and guidance. Evangelize the problem and show them the light at the end of the tunnel – the solution, your category. Have everyone in your ecosystem be the charismatic preachers of your point of view, spreading the word far and wide – a movement.

Rule Setting: You’re not just playing the game; you’re setting the rules. Establish the standards, best practices and methodologies that define your category. You’re the trendsetter, and everyone else will have to play by your rules.

Own It: Now that the masses are flocking to your category, it’s time to forge a rock-solid association between your brand and the category you’ve created. Ensure that all things branded are on category!

Commitment: Category-led growth is a never-ending journey. Stay committed but smartly nimble. If an analyst starts using a category name that you didn’t suggest but they place you as the leader, t. Then take it and run with it. If your customers modify your category name by dropping a word and it’s sticking, then use it. Stay committed, but continuously be willing to fine-tune your category strategy and POV.

Now, Focus on Other “-Led Growth” Strategies

Once you have your category-led growth strategy operating on all cylinders, then of course implement the other supporting “-led growth” strategies that support your category. Hubspot is a lesson in this. It designed and led with the category, inbound marketing. The movement it created, with constant content marketing that was completely aligned with the category POV, created the market and the demand. Product-led growth strategies captured that demand. Community-led growth solidified the movement.

Is category-led growth something you’re working on? We would love to know more. Bounce your ideas off us by booking an office hours slot now.