All Startups Need To Play A Category Game

by | Nov 18, 2020

“Why do we need to worry about our category as a startup right now?”

That’s a common question. The category game is not for every business.

Small businesses play in existing categories. Big businesses dominate categories that are already mature and well understood.

Those category roads are already paved.

But ambitious startups are either creating new categories or moving around existing categories.

“What exactly is your product or service?” is not as simple to answer when you start if you are really doing something new or very different.

You are paving a new category road that doesn’t exist yet.

The category game the primary game you will be playing to scale fast, get big, and keep growing.

Here’s why:

  • Big markets require easy purchase decisions with simple categories that are well understood. “Smartphone” is well understood now and billions of people buy it without thinking about the category.
  • We buy from category leaders who make the thing that is best for us. Category leaders walk away with the spoils in any market. Can you think of the fourth or tenth smartphone player after Apple, Android, and (I can’t think of a third)?

If you have serious investors or are thinking big, your ultimate job as a founder is to win the category game you are playing.

Greg Head posted this on LinkedIn on November 18, 2020.

Check out the comments and join the discussion on LinkedIn.

Related Posts

SaaS Startup Rule Number 1: Don’t Run Out of Cash

Here’s a big reason for avoiding SaaS startup failure that doesn’t sound as sexy as finding product-market fit--not running out of cash to keep going long enough to create that product-market fit. Creating product-market fit is often the key ...

A Practical Case for an Imperfect MVP

Many successful software companies didn’t start in the business they are in now. A surprising number of them got started with a different idea. Then they learned something important from actual customers and changed course. “We had to start ...

Successful Startups Grow in Stair Steps, Not Straight Lines

Beware of the “straight line assumption” when you hear impressive founder success stories. In hindsight, it looks like a pretty straight line through “We started it, then we grew it, then we sold it.” But it was never a straight line. It’s ...
No results found.
Practical Founders eBook

FREE 60-PAGE EBOOK

Win the Startup Game Without VC Funding

Learn how all 75 founders on the Practical Founders Podcast created an average founder equity value of $50 million.