08 Nov A two-step approach to starting a new category
Many companies come to us with a desire to create a new market category. While its natural for an innovator to believe that what they are doing is so different it defies current norms and definitions, starting a new category is a daunting task. Often it requires not just a new product, but often a new business model as well. If there isn’t market-wide momentum, even the most interesting idea often fizzles out.
Clearly, offerings, like Airbnb and self-driving cars, were dramatically different — so much so that influencers quickly named these new markets and anointed their founders as visionaries. But, for B2B technology, most customers and influencers see even the most innovative products as building on something that already exists.
When this is the case, I’ve found it’s almost always better to ride the wave of an existing product segment first, and then let your technology prove that it deserves a new moniker. This is not simple, it is a more controllable approach and it’s been proven out over time. Think about the launch of free email –Hotmail did not claim it as a new category. It simply hijacked a current one and set in motion the demise of desktop email and the rise of cloud-based applications.
So, how does a company go about expanding the definition of an existing product segment as a precursor to launching a new category? Here are a few strategies to successfully introduce your product to the market and make sure its differentiators are setting the stage for a new segment to develop naturally.
1. Work with market analysts early on to suggest that the current category needs to be expanded — they always like to be the first ones to identify the next big thing. Working with well-regarded analysts can help give your new solution the bump it needs to enter a crowded space and carve out a place for itself.
It’s important to recognize that some analysts have a vested interest in protecting categories in which they are the leading authority. Seeking an expansion on a current category is often more palatable to the analyst world – a group you need on your side. Working with smaller analyst firms can often net better results since they can be more open to new thinking and more inclined to shake up the status quo.
If analysts include you in current reports, even as an “emerging player,” it gives you leverage to suggest that a new report or research cycle is needed.
2. Get your customers or customer targets riled up. You need to focus heavily on pain points – showing what the current solutions do not address. The more users you can get talking about the need for your solution, the better. Seed these conversations in appropriate communities and media early on – even before product launch, if possible. Have people who are willing to advocate for your new approach. This may involve sponsorship in certain verticals or with particular influencers.
3. Get in front of early adopters. If your company is a startup, there are a number of early stage events and communities where your participation will draw attention. Look to see what state politicians and your local area business groups, like WeDC in this region, might be doing at events like SXSW or CES. Groups like StartUp America seek out entrepreneurs to highlight from non-traditional tech markets. These events and their attendees can serve as a great sounding board for something new.
If your company is well established, leverage that brand to get some airtime at such events or within communities. You will need this audience to help push your thinking forward. Look first among your existing customers. Offer them incentives to help you frame out the new product.
4. Engage with the venture capital community. VCs talk to a lot of people. Even if you are an established company, seek out introductions to those VC influencers and bend their ear. Be careful about revealing too much, but sow the seeds — get them excited! If VCs sense there is momentum in a space, they often look for other companies doing something similar. Remember, you need others to jump on board if your goal is to eventually give rise to a new category.
5. Make your product easy to try and adopt. The freemium model became popular because it had the potential to show a clear level of interest or, at least curiosity, in a solution quickly. Allowing developers to sandbox in your solution, hosting a robust beta program that helps develop early evangelists/customers, and offering implementation strategies that bypass typical procurement processes are all ways to help your product generate early traction. It’s always easier to upsell existing customers than go after new ones.
6. Develop relationships with influencers that have a big voice. This might be traditional media or social and community influencers, but having people with a platform sing your praises and validate your approach is critical. There are just a handful of formal product reviewers left, but invite some of those to be among your beta testers.
Do early reveals to a few influential media to whet the appetite of others. A well-earned opinion from Walt Mossberg, or his counterpart in your space, can go a long way to generating market interest.
In the last decade, celebrity investors have helped catapult companies to fame. Don’t neglect the potential of getting a non-traditional influencer on your side.
Remember, many influencers are trying to monetize their own business. Look for ways to form a strategic relationship in a way that benefits everyone.
For one client, we engaged in a modest, paid consulting relationship with an industry influencer. That person was trying to kick off his own business and needed someone to offset his costs to travel to NY where he was often invited to be a guest on national broadcast media. Our client benefitted not only from the insights the influencer offered, but they also gained media visibility since he mentioned them frequently in interviews he was doing anyway.
For another client, we used a well-known author as a speaker at their annual customer event. As part of that arrangement, he co-wrote a few articles with the client and continued to speak about the issues the clients wanted to highlight long after the relationship was over since it dovetailed nicely with his own platform.
7. Seek out awards and accolades. This is not the time to be humble. Aggressively go after recognition for innovation, leadership, and growth – the trifecta of visionary companies. There are formal awards and those more nebulous designations as the “next hot thing.”
8. Finally, as the momentum takes off – claim victory. Remind those influencers that your company was first out of the gate. Congratulate them publicly for recognizing the early potential of your ideas. Don’t sit back and hope the industry gets history right. Take ownership of your story. Write your own history. This requires finesse, but it’s a needed effort.
These tips will create a good foundation for any company looking to change the conversation in their industry. While they require a thoughtful strategy and great execution, the ROI can be significant. It may not be as flashy as starting a new category out of the gate, but this approach has worked time and again – and often fits better into typical B2B, go-to-market models. And, don’t think this takes years to come to fruition; if you set the stage early, you can see significant traction quickly. Timing is key, but a new category can be yours with just a little patience.