How to Create and Launch a New Software Category - The Ultimate Guide

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This blog was co-authored with Amir Kazemi, Director of Marketing at ClickUp.

Summary

1. Determine if category creation is the right strategy for you
2. Intimately understand your customer and their jobs to be done
3. Build a strategic narrative that creates a new game in your market
4. Launch your new category and measure success

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Intro

Looking back at the last decade, some of the most innovative companies — software brands and organizations that are household names to millions — went beyond just building amazing products. They created and defined entirely new categories. 

Let’s look at a few examples:

• Atlassian and its project tracking tools are essentially synonymous with the Agile movement
• HubSpot created and now dominates the Inbound Marketing category
• Gong has redefined a winning sales strategy through Revenue Intelligence 
• Salesforce and “No Software” (or "Cloud Software") have become one and the same
• Zuora defined and enables new business models in the Subscription Economy

There’s no doubt that any successful company is continually striving to maintain a leadership position in its respective category. Founders, execs, product, and marketing teams all work tirelessly to find strategic ways to give their companies an edge over the competition.

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But, in the case of the greats, what’s the secret sauce? Can we chalk it up to a combination of luck and timing? Or was it the result of executing a specific plan? Perhaps some mixture of both?

The answer is: it depends.

Every company's stage of growth, competitive landscape, and product lifecycle heavily contribute to this equation. As does the maturity of the market they’re in and going after. If you’re looking for a playbook on how to create your own category, we’ll be the first to tell you - it doesn’t exist. But for companies interested in creating a new software category, or even carving out a piece of a newly established category for themselves, there are a few key building blocks that need to be in place, and some time-tested strategies they can employ to increase their chance of success.

In this piece, we’ll walk through some of the most important things to consider if you're thinking about creating and launching your own software category.

If you’re reading this article, there’s a good chance you’re asking yourself: is category creation the right approach for my company or organization? 

The answer is: there’s a great deal of nuance you need to consider.

There are times when trying to create a new category can actually undermine your mission, as the level of investment required could just as easily propel you to the top of your current category (and then some!). But with great risk comes great reward. If you do successfully define a new category, you become the undisputed leader, only player, and owner in a brand new area.

The first step in this process is ensuring you have a both a broad and deep understanding of your current market.

How to recognize a new category opportunity

Look for these scenarios when identifying a brand new, blue ocean opportunity: 

• A space in which there are currently only two or three other players who are largely considered niche by the average consumer
• Broadly speaking, there is no clear incumbent, and no one has aggressively staked their claim through opinionated thought leadership
• Often, the niche players in the space are each solving one small piece of a far larger problem, yet no one has defined the larger narrative

‍Intercom is a great example of this scenario. Intercom’s founders weren’t the first to directly communicate with users, nor were they the first to build easy-to-install widgets for your app or website. But, inspired by how much the owner of their favorite coffee shop knew about them, and how personalized each of their visits then became, the founders realized that no current customer communication platform was using personalized segmentation. As a result, the current platforms made every interaction with users feel impersonal and transactional. And so a new category of software, the Conversational Relationship Platform, was born.

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Fast forward 10 years, and Intercom is not only the undisputed leader in this category—a category they created—but they've gone on to build an entire suite of tools to make interactions with users more conversational. And, like so many new category creators, they simultaneously built an impressive content machine to educate new markets on the importance of being more conversational and personal in your everyday interactions with customers.

Another common scenario is when there’s a clear incumbent who’s captured a significant chunk of a market you’re interested in going after, and that incumbent has been comfortably cruising as a ‘legacy’ player in the space for quite some time. Although it’s not necessarily a B2B SaaS example, think about Blockbuster vs. Netflix. Often, category creation doesn’t have to mean the creation of a completely new space, but instead reimagining a category that’s in bad need of innovation. Netflix didn't create the movie rental category, but they upended the rental industry by connecting streaming technologies with the movie rental market. Today, Netflix has a market cap of $250B+, and Blockbuster is completely out of business.

In either case, the new category you’re aiming to create needs to be one that your customers will trust you to deliver on. So, as you explore potential opportunities, ask yourself and your team the tough question: Do we have the necessary conviction and clarity of vision to not only paint the picture, but then deliver on it?

Creating a new category is a significant endeavor that will likely take years to fully realize, and if and when you do recognize the signs of a blue ocean opportunity, you (and your team) must have the willpower to aggressively pursue it. For both Intercom and Netflix, success took years, if not decades, to achieve. So it’s essential to go in with your eyes wide open. And, early on, this conviction means ensuring you have the necessary internal resources, support, and momentum to get the effort off the ground. In my experience, the vast majority of new category endeavors never gain the necessary internal ground swell to get the ball rolling, and end up stopping dead in their tracks.

As mentioned above, there isn’t a perfect playbook to going about this, but there are ways of ensuring you put your best foot forward and set yourself up for success. I’ll continue to unpack these strategies throughout the rest of this post.

When new category creation might not be the right strategy

If you’ve talked or listened to enough people who’ve attempted category creation, many of them will confirm what we’ve already discussed, which is to say: think very carefully before you jump in! When it pays off it can do so big time, but the road to success is anything but smooth... or guaranteed. One thing is certain though: success with a new category doesn’t happen overnight, and it may be years before you see a solid ROI on your efforts.

With that in mind, it’s important to recognize when defining and creating your own category may not be the best idea. Like every business decision, you want to be as strategic as possible when you enter the arena, and sometimes the timing just isn’t right. Beyond scrutinizing whether or not you're in a position to capitalize on the three scenarios above, here are two additional questions to ask yourself to help determine if the timing is right:

1. Do you have a unique and unrivaled understanding of your buyer and their pain points? (more on this below)
2. Do you have the runway, resources, and support to spend at least six months on user education (a steady stream of written content, at least one product demo video, press opportunities, multiple speaking engagements, webinars, and so on) before you begin seeing meaningful revenue growth?

It's important to understand that much of the battle of category creation is driving awareness of the category among an audience who is increasingly inundated with more and more information. And frankly, I would say six months is the bare minimum you should be prepared to spend. Realistically, plan on spending at least a year, as it can the average person up to 20 times of seeing something before they truly internalize it.

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If you don’t have big, bold check marks next to both of these points, it’s worth reevaluating your jump into the new category creation process. At least for now.

Almost every established software market, by its very definition, is saturated with different players. Ensuring your brand or organization stands out from the pack and remains differentiated amongst your competitors can be a challenge. For this reason, many industry leaders have distinguished themselves by defining their own category through one of the foundational building blocks of category creation: the strategic narrative. If you and your team have decided you're serious about moving forward with category creation, the next step is creating your own strategic narrative.

The prerequisite of any great strategic narrative is having a clear understanding of your customers, so you'll want to begin with buyer persona development. At a high level, the goal of a buyer persona work is to:

1. Intimately understand both the current and future state of the market
2. Build empathy for the challenges your customers not only experience today, but will be experiencing in the near future 
   

Successful buyer persona research will leave you with a deep understanding of how your customers and prospects describe the problem(s) they're having, the pain(s) this problem is causing, and what they’re doing in their day-to-day to solve the problem. There are countless buyer persona frameworks and methodologies to choose from, and ultimately you want to find one that will leave you feeling like you know your customers as well as you know your best friends or close family members—so much so that you can actually begin anticipating their future wants, needs, and actions. For example, I know exactly what my wife ordered at our favorite take-out restaurant 10 years ago vs. today without needing to ask her. And based on this information, if I had to guess, I could probably predict what she’s going to try next.

While some might tell you that simple buyer persona research is enough, I disagree. In my experience, if the goal of your buyer persona development is to build a killer strategic narrative from which you can ultimately create a new category, this work needs to go far beyond traditional buyer persona research. To succeed, you and your team will need to be two steps ahead of your buyers and their problems, pains, and needs. In short, you need to become customer obsessed, and I would encourage you to extend your research far beyond understanding the how and why people are using your tool. Instead, find ways to dive into every detail of your users' day-to-day. From what they had for breakfast that morning, to what keeps them up at night, to what their dream job would be.

For this level of insight, even the addition of traditional third party research firms and paid opinions won't be enough. Instead, you and your team should be prepared to join sales calls on an almost daily basis, plan your own customer visits (when possible), attend relevant tradeshows and conferences, and even take turns on support channels. Anything and everything you can do to get inside the head of your users and know what they’re thinking before they even realize it themselves. For some additional inspiration on ways to do this, check out this article that the Harvard Business Review published on spending a day in the life of your customers.

While doing this work to more intimately understand your customers, keep in mind that what you're ultimately digging for is a unique insight on some aspect of your customer and/or their day-to-day life that no one else has, or has been able to capitalize on. This insight (or insights), will not only serve as the foundation of a powerful strategic narrative, but also boost your confidence and conviction that you're on the right path. Going back to our Intercom example, the customer insight that led to the birth of the Conversational Relationship Platform was that, even through digital mediums, users were being forced into transactional relationships when what they really wanted was a personalized, human touch. And by providing this personalized, human touch, users and customers are happy, more engaged, feel more cared for by the business, and so on.

Once you know your customers inside and out, you’ve laid the necessary foundation for the next step in the process: the creation of your strategic narrative.

Product positioning vs. strategic narrative

At first, your work on a strategic narrative will feel a lot like a product positioning exercise. The goal of product positioning is to add context, help buyers understand your product’s value proposition(s), and differentiate you from the competition in a crowded market. It also positions your product or brand as the only one a buyer can trust to solve their problem. If done correctly, great product positioning highlights your clear value to the customer, addresses the problems you'll be solving for them, and showcases the benefits that await them if they adopt your solution.

The product positioning process looks something like this: 

• Define your buyer persona(s) and their jobs to be done 
• Understand their pains and gains to craft clear, concise value propositions  
• Sprinkle in a little competitive differentiation  

Where this process often falls short, especially if your long-term goal is category creation, is that you might be focused on a pain or problem that your customer might not feel an urgent need to solve.

Enter the strategic narrative.

What a strategic narrative is and why it’s valuable

I first learned about the power of strategic narrative through a small group workshop I attended with Andy Raskin back in 2017. Today, there’s a strategic narrative certification in which Marcus Andrews walks you through creating your own. But if you don't have time for the full class, here's a primer:

A strategic narrative is powerful because it ties your product positioning to a significant and relevant change that's going on in the world, creating a situation in which your potential buyer must decide to continue whatever they're doing and risk being left behind, or adapt to the change(s). Unlike product positioning alone, a strategic narrative creates a new game in the mind of your buyers—a game that requires adaptation to win.

Taking the game analogy one step further, every game comes with a set of rules and a clear definition of how to win and lose. If a player doesn’t play by the rules, they lose immediately (at best), or are ejected (at worst). As buyers usually avoid losing at all costs, great strategic narratives begin by calling into question the very game they’re playing. And, by extension, the strategic narrative makes these buyers question the rules by which they're trying to win said game.

Once these seeds of doubt have been sewn, and a buyer begins to realize that they may not be playing the right game, or playing by the rules required to actually win in their category, a vacuum is created. This presents the perfect opportunity to introduce an entirely new game with a brand new set of rules. If you can convince your prospective buyers that today’s winners are playing this new game, they’ll have a renewed sense of urgency and begin clamoring to play by your rules.

Let’s take a quick look at how Salesforce executed this strategy:
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The importance of naming in software category creation 

Once you’ve built a strategic narrative for your product or brand, you’ll face one of the most important decisions in the category creation process: “what should we name it?”. Ideally you'll want the name to be a short, memorable phrase that will serve as a reference point. For example, “Inbound Marketing” for HubSpot or “Revenue Intelligence” for Gong.

Name generation is a lot more art than science. There are some naming exercises and frameworks that I've seen PMM teams use, but in my experience those frameworks are too formulaic. Instead, here's a list of common requirements and considerations you should take into account when devising a name for your new category. Ideally a new category name should:

• Demonstrate an intimate understanding of your customers, including knowledge of the day-to-day vernacular they use
• Be supported by a product vision for the business that most often stems from the Founders and/or CEO
• Ideally, be no more than 3 words, as you want it to be something short and sweet that captures the essence of the new game (rather than features or value props)
• Anticipate any SEO, brand, PR/AR, or potential other downstream implications

Once you have a list of potential candidates, you will need internal buy-in for (and hopefully consensus on) a new name among your peers and colleagues. And, if your software company is anything like the ones I’ve worked for, this initial socialization will likely lead to quite a bit of back and forth and some passionate and opinionated feedback. Relatedly, be aware that your founders and/or executive leadership team will ultimately need to approve the name, so it’s wise to include them as early as possible in your strategic narrative tiger team. But, if you consider that every person within your organization is ultimately a salesperson for your company, getting the rest of your organization bought into and using this new name in their day-to-day is an important milestone. If your name begins to stick internally, it’s a great first indicator, and will help jump start the process of getting it to stick externally as well.

After you've reached some sort of internal consensus, the next step is to begin socializing the name of your new category in the wild and throughout your user base. One of the best ways to conduct an early litmus test of your narrative and category name is to begin using it in your comms to existing customers, prospects, and analysts. What happens when you do? Are these people excited? Confused? Intrigued and immediately asking follow-up questions? If you have a sales team, ask a couple of your top reps to gauge reaction with a few customers to gain even more additional, qualitative data points.

If you’re looking for a more quantitative approach, I’ve found that sending a survey to a specific cohort of users that includes multiple concepts (messaging, visuals, and so on) is another terrific way to gather input and gauge various factors, such as how it resonates, whether or not it’s confusing, and if recipients are intrigued to learn more.

Remember: You will never reach full consensus on the perfect name, but your goal should be to gather enough feedback, both internally and externally, as well as qualitatively and quantitatively, to provide you with enough data to determine a "winner". Ultimately, the most powerful indicator is if customers begin using the name you’ve seeded and relaying it back to you throughout your communications with them. If this happens, you’re onto something great.

Assuming your efforts to create a new category are successful, this category is something you’re going to be married to for many years. It will have downstream impacts on everything from your company's messaging and positioning, to your SEO strategy, new product names, and so on. So all that's to say: naming is a crucial component of the category creation process that you don’t want to cut corners on.

Launching a new category vs. launching a new product

While this might come as a surprise, the prep work needed to launch a new software category is very similar to the work required to launch a new product.  But while the core launch activities are the same (i.e. things like defining a target audience, preparing content for both owned and unowned channels, enablement of customer-facing teams, an AR/PR strategy, and so on), what's different when launching a new category is how vital the post-launch work is. In fact, it's the work that happens after the launch the matters most.

Too often product launches become a "flash in the pan" moment, and the day after an announcement the product marketing team shifts gears and begins working on their next project. While this is often the result of how busy most PMM teams are, the fact remains that broadcasting a story to the world once and then immediately moving on isn't a good recipe for making something stick. In an era in which most people have the attention span of a goldfish, and knowing it can take the average person up to 20 times of seeing something before they truly internalize it, any one-and-done marketing activity will be ineffective. As such, a “flash in the pan” approach to category creation is going to fail spectacularly. Creating a new category that sticks, and is successful in the long term, will take years of investment.

At a bare minimum, if you're planning to create your own category, it's critical to have a steady drumbeat of supporting marketing activities over a 12+ month period. In my experience, you will want to aim for at least one outreach moment every month. Ideally, this will be a mix of content (videos, whitepapers, blog posts, landing pages, and so on), product updates (new features that you can build in to support your new strategic narrative), events (speaking engagements and booths at industry events that reach thousands of eyeballs), and customer validation (users actively talking about and praising your new category). The key is to continue pushing your strategic narrative until you feel like you've pushed it too much. And then push it some more!

Likewise, be prepared to take a similar approach with your internal stakeholders. Especially when launching a new category, continuously enabling internal, customer-facing teams like sales, business development, customer success, and partners must be a top priority.

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Your internal enablement efforts are one of the most important activities you can invest in, as your peers and colleagues are your biggest advocates. If you want to be successful in your effort to create a new category, you need internal help evangelizing a consistent narrative across your customer base. As the saying goes: “Everyone in a business is a salesperson,” and you should think of every customer-facing team as a force multiplier for your category creation efforts.

Measuring the success of category creation

As your new category gains traction externally, it’s important to have an effective strategy in place to measure success. Some great signs of early progress include:

• Customers reacting, responding, and taking interest in the tension created with your strategic narrative
• Industry analysts discussing your new category and strategic narrative in their work
• Press mentions specifically addressing your new category in their stories and writing

However, there are some big differences between how you’ll measure success over the first few months, and how you'll ultimately want to judge the success of your category creation. Unlike a traditional product launch, in which it's usually evident within a few weeks how successful your efforts were (via engagement metrics, new evals, etc.), measuring the success of a new category launch is not only far more complex, but could take years to get a solid read on. That said, here are a few best practices that I've seen implemented well, and can serve as a starting point:

• Plan on giving yourself at least one year of runway before you make a call on how successful you've been
• Only measure data in quarterly increments (anything shorter will result in volatile data that will be fairly meaningless)
• Use tools like Ahrefs to track how well you're ranking for your category across the internet
• Conduct quarterly Google Brand Lift studies to determine if and how impactful your efforts have been in getting the word out
• Leverage Google Search Console to track the organic search rank of your category
• Adopt social media monitoring tools to determine if and how much social chatter there is about your new category (or strategic narrative)

While there is no playbook, and certainly no silver bullet, to determine if and when "your new category has been successful," it's critical that you and your team set milestones and OKRs to track progress. If creating a new category is an important endeavor for your company, and leadership is invested enough to throw 6-12 months worth of resources behind it, the last thing you want is to not be properly tracking and measuring if and how successful you are. In my experience, creating quarterly milestones and an annual OKR is the best way to keep everyone accountable and rallied around the same goals.

While creating a new category can take years, if you're not seeing positive momentum in the right direction after 12 months, it might be time to shift your strategy.

Closing thoughts 

If you're just beginning to explore the concept of creating your own category, take the time to learn how to do it right. As we’ve discussed, when executed correctly, the long-term pay out can be enormous. But understand that category creation is a serious, long-term investment that requires enormous support, conviction, and planning to succeed. Don’t forget that timing will play an important role as well, as it does with so many things related to sales and marketing.

Even though a perfect category creation playbook doesn’t exist, I hope this piece has given you some different perspective(s) to consider, as well as a number of resources you can utilize. While planning to create a new category may seem like a daunting task that's not worth the lift, I'll leave you with a great Jeff Bezos quote on the importance of taking big bets in business: "Given a 10% chance of a 100 times payoff, you should take that bet every time." -Jeff Bezos