What is Category creation?

The most ambitious startups don't just enter existing markets - they create entirely new ones. This is hard, but the rewards are enormous if you succeed. Airbnb didn't just compete with hotels; it created the home-sharing category.

Which companies use Category creation?

Companies that exemplify the Category creation framework include Red Bull - Created the energy drink category by introducing a caffeinated beverage marketed as a performance enhancer, Dropbox - Pioneered easy-to-use cloud storage and file synchronization for consumers and businesses, Gong - Established the Revenue Intelligence category by developing AI-powered software to analyze sales conversations.

How do you use Category creation?

To apply Category creation, start by understanding the key components of the framework and mapping them to your specific business context. The framework works best when used systematically as part of a broader strategic analysis.

When should you use Category creation?

Category creation is most useful when evaluating strategic options, analysing competitive dynamics, or making resource allocation decisions. It provides structure to what might otherwise be an intuitive or ad-hoc process.

Category creation: Framework Explained

Category creation: Framework Explained | Faster Than Normal

Category creation is the deliberate act of defining and owning a new market space — not competing within existing boundaries, but redrawing the map so that you set the rules, the language, and the buying criteria. It is the highest-risk, highest-reward strategic move a founder can make.

Section 1

How It Works

The fundamental insight behind category creation is that markets are not natural phenomena — they are social constructs. Someone decided that "CRM" was a category. Someone decided that "energy drinks" were distinct from soft drinks. The company that names the category, defines its boundaries, and educates the market on why it matters earns a structural advantage that competitors can rarely overcome, because every subsequent entrant is implicitly validating the category creator's framing.

The mechanics work like this: you identify a problem or behavior that exists but lacks a name, a budget line, or a purchasing process. You give it a name. You build a product that is the definitive solution to the newly named problem. Then you spend as much energy evangelizing the category as you do selling the product — through content, analyst relations, events, and ecosystem building. The goal is not to win a market. The goal is to make the market, and then be synonymous with it.

This works because of how enterprise and consumer purchasing decisions actually function. Buyers don't evaluate products in a vacuum — they evaluate them within categories. If you're selling "revenue intelligence," the buyer first decides whether revenue intelligence is a thing they need, and then evaluates vendors. If you created the category, you are the default. Gartner estimates that category creators capture roughly 76% of the total economics in the markets they define. The second and third entrants fight over the remaining quarter.

"Every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page will not make a search engine. If you are copying these people, you are not learning from them."
— Peter Thiel, Zero to One

The underlying asymmetry is temporal: the window for category creation is narrow — it exists in the gap between when a new behavior becomes possible and when the market coalesces around an existing player's definition. Miss that window and you're competing in someone else's category. Hit it, and you get to write the rules.

Category creation

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