One of the questions we sometimes get about category design goes like this: Category design seems to be about creating new technology, but can new non-tech categories be created in old, established sectors?

The short answer is: Hell yeah!

A longer answer can be told through the story of The Sports Bra. Which isn’t a women’s bra. It’s a bar in Portland, Ore. And it is in the process of creating a new category of bar.

When we work with clients, we often pull out a formula that helps spur discussion about a new market category. The formula is:  f (category) = context + missing + innovation.

If you look hard when there is a significant change in context (new technology, societal shifts, a pandemic, etc.), you can often see how that change in context is creating a new “missing” – something that should be there but isn’t yet. Understanding that missing is a way to see an innovation that can solve for what’s missing. Put it together, and you see a category to define and develop.

An incident in 2018 helped Jenny Nguyen recognize that a change in context had left her with a missing she felt compelled to address. Nguyen had been a lifelong basketball nut and played for Clark College until she tore up her knee. Over the previous decade or so, the WNBA, founded in 1996, had built up a significant fan base. At the same time, the U.S. women’s soccer team was often outdrawing the men’s team at stadiums. The context around sports was shifting – more women (and men!) than ever wanted to watch women’s sports.

The incident that catalyzed Nguyen’s thinking happened when she and a group of friends went to a nearly-empty bar hoping to watch a women’s college basketball championship game. They had to plead with the bartender to at least put the game on one of the bar’s smallest TVs. If they’d gone to any sports bar, all the games on all their TVs would’ve been tuned to men’s games. The clientele would’ve been dominated by men.

In that moment, Nguyen spotted this new missing that was not being addressed amid the context of the rising popularity of women’s sports: there were no sports bars devoted to showing women’s sports for a primarily female clientele.

That insight suggested the innovation: a women’s sports bar for women.

Nguyen was also a restaurant chef, so she knew the business. She cobbled together her savings, got a loan, fired up a Kicktarter campaign, and got enough to fund the bar she felt compelled to create. It opened in 2022. Its TVs all show women’s sports. The walls are adorned with women’s sports memorabilia. It sells booze made by women-owned distilleries. Its menu includes vegan and gluten-free items. And the name is brilliant: The Sports Bra.

As Nguyen told CNBC: “The very first thing that came into my mind was The Sports Bra, and once I thought it, I couldn’t un-think it, you know? It was catchy. I thought it was hilarious.”

In The Sports Bra’s first eight months, it brought in $1 million in revenue. On many nights, there are lines to get in. She hit a nerve – a category that matters. To put it another way, she identified a market that needed to be created, and built a product – her bar – to serve that market. She found market-product fit.

Something else we tell companies: a category needs more than one entrant. If you create a category and nobody follows you, you’ve probably created a category that doesn’t matter. Before The Sports Bra’s first year was up, a similar women’s sports bar opened in Seattle. Nguyen told CNBC: “I would love to have as many people experience the feeling people experience when they walk through these doors. It feels very selfish to keep it to this one building that holds 40 people at a time.”

Bars are an ancient category. There have long been all kinds of categories of bars: sports bars (for men), gay bars, cocktail bars, neighborhood bars. But there was still room for an innovative new category of bar.

And that can be said for any market sector. Context is always changing, and those shifts are always going to open up new missings that need new innovations. That doesn’t just apply to technology. It can apply to anything – food, paint, razors, shoes, and on and on.

When Nguyen wrote her business plan, she got to the part about listing her competition. She said she thought about it for a minute and wrote: “The only competition is the status quo.”

That should be a sentence every company aspires to write.