How unique does your product/service have to be to establish a new category?
When new companies establish products or services, they usually look to do something new or different from other players in the industry. Every company believes that what they do is somehow unique (and better) than other alternatives. This is the basis for the unique selling proposition (USP) or ‘key differentiators’. Sometimes, these are based around functionality, scope or other attributes like service quality, expertise, etc. Sometimes, the differences are unique enough to lead to the question of whether the product or service fits into an established category in the market or if it is, in fact, creating its own new category.
Why would you want to create a new category? Often those who are creating new products and services believe what they are creating is truly revolutionary – that nothing similar exists and therefore, their products/service stand in a category that is completely new. Often, there is the desire to be the leader in establishing something completely new– to be the only fish in a new pond, rather than one of many fish in a big pond. Sometimes this is the case, but often it is a case of being too close to your own solutions to recognize how your products and services are viewed by customers. It’s also not always advantageous to establish a new category.
No company is without competitors. If you haven’t found any competitors, you are either in a business that others have investigated and decided was not profitable, or you haven’t looked hard enough. Remember, any alternate solution—including inaction—competes with your solution. It does not have to be a direct replacement to take away potential sales or to solve the same challenge in a different manner.
Why would you want to attach to an existing category? By attaching to an existing category, you can benefit from all the investment and knowledge that the entire category has put into educating the market. You don’t have to start from scratch explaining the value provided and can, instead, focus on where you are different from alternatives and explain your organization’s specific strengths. You get to benefit from the recognizability of that established category, without the investment required to establish that knowledge.
Essentially, this is what Allen Gannet, author of The Creative Curve, refers to as the ‘sweet spot’ of the creative curve:
“Ideas in this region of the curve are familiar enough to be comfortable, yet novel enough to compel our ongoing attention.”
He writes that the ideas that tend to take off the most are not lightning strike eureka moments, but rather those ideas that fall in the sweet spot between the familiar and novel. You can harness this power by attaching to an established category and demonstrating how your solution is novel.
Ask your customers where you fit. Your existing customers can be one of the best sources to help keep your messaging in check. What solutions do your customers consider similar to yours? What about their peers? What alternatives did they consider before buying from you?
If you are creating a new category, you don’t usually get to decide this. This is usually decided by others – who recognize what you have as a divergent evolution of the status quo that is gaining enough traction—typically with multiple new entrants to the market—to warrant a new category to define these products/services.
Embrace where you fall. If you discover you are creating a new category, enjoy your role in defining that change. But if you discover your products/services fit best into an existing category, don’t see this as a negative, but rather as an opportunity to ride a wave that is already proving successful for other organizations. There are many benefits to creating new services and products that fit within an existing category with established demand but still offer a novel solution that has specific advantages over the alternatives.
