Somewhere in your last board meeting, someone suggested creating a category.
It is a seductive idea. Stop competing on a crowded quadrant, define your own space, own it entirely. There are famous examples and everyone has read the same book.
For most B2B tech companies it is the most expensive mistake available, and it usually gets made for the wrong reason.
The Examples You Are Copying Are Survivors
Everyone can name the companies that created a category and won.
Nobody can name the ones that tried and disappeared, which is precisely the problem. You are looking at a shortlist assembled by survival, and drawing conclusions about the strategy from the winners only.
The companies that succeeded also had things you may not: enormous funding, a genuinely novel product, years of runway, and often a market that was already forming without them. Category creation was the flag they planted, not the reason they won.
What It Actually Costs
Creating a category means paying for four things, all at once, before you see revenue.
You educate the market. Every prospect needs to understand a concept before they can evaluate you. That is a conversation you fund in full, for years.
There is no search volume. Nobody searches for a category name that does not exist. Nobody asks an assistant about it either. Your demand generation starts from zero and stays there for a long time.
There is no budget line. This one kills deals quietly. Your champion loves it, then has to explain to finance which existing budget this comes out of. If the answer is “a new one,” the deal slips a quarter and often forever.
Your buyer cannot compare you. That sounds like an advantage. It is not. Enterprise buyers are required to compare, and a vendor with no comparables is a procurement problem rather than a shortcut.
What Founders Usually Mean By It
Here is the uncomfortable part, and it is true more often than not.
When a founder says “we need to create a category,” they usually mean “we cannot articulate why we win in the category we are already in.”
Category creation feels like an escape from a hard positioning problem. It is not an escape, it is the same problem with a much larger bill attached, because now you have to explain both what you are and what the whole space is.
If you cannot win a corner of an existing category, inventing a new one does not fix that. It removes the only frame of reference your buyer had.
The Better Move, Almost Always
Own a corner of a category that already exists.
In crowded markets that corner is harder to find than it sounds, and we went through how to locate it in positioning a security product when everyone claims the same thing.
Not the whole category. A defensible corner: an environment, a segment, a use case, a size of team. “The X for Y” is unfashionable and it works, because it borrows the buyer’s existing understanding and then narrows it to you.
You get the budget line, the search volume, the comparison set and the assistant recommendations for free, because they already exist. Then you win by being obviously the best for a specific situation rather than vaguely different from everyone.
The unglamorous truth is that most category leaders got there by dominating a niche first and expanding, not by naming a space and waiting for the market to arrive.
When It Is Genuinely the Right Call
Sometimes it is. Three conditions, and you need all three.
- There is no existing purchase behaviour. Not “buyers do it badly,” but nobody buys anything for this. If they are solving it with a competitor, a spreadsheet or a contractor, the category exists and you should compete in it.
- You have the runway to fund years of education. Be honest about the number. It is longer than your plan says.
- The product is genuinely without a comparable. Not better. Different in kind. This is rarer than founders believe, and your engineers will usually tell you the truth if you ask them directly.
If you have all three, go. If you have two, you are about to spend a lot of money learning that two was not enough.
The Question to Ask Instead
Rather than “what category could we create,” ask this:
Which existing category could we be the obvious best choice in, for a specific kind of buyer?
It is a less exciting question. It is answerable this quarter, it costs nothing to act on, and it tends to produce revenue rather than a naming exercise.
You can always expand outward from a corner you own. You cannot expand outward from a category nobody has heard of.
P.S. If your category name only appears on your own website, it is not a category. It is a slogan with ambitions.
