The IIAR> Institute of Influencer & Analyst Relations / [GUEST POST] Category Creation AR: A New Frontier?

My recent eight months at Clari were short yet rich in experience and learnings. Short because, along with many of my very talented co-workers, my tenure there was interrupted by a recent restructuring (aka RIF) action. But rich because it allowed me to develop and experience running AR in “category creation mode” – which is a very different playbook than traditional “established market” ones.

For those who may not yet know, “category creation” is a methodology championed in a book called Play Bigger. In a nutshell, it’s a business strategy premised on a very simple concept: in order to own a market, a company should position itself as “different” and not just “better” than its competitors by defining, designing, evangelizing, and therefore owning a new market category. What’s a market category? Well think CRM or ERP for example. At one point, these categories were brand new with single “winner-take-all” owners (Salesforce for CRM).

New categories are born from a “unique insight” and POV. The “aha” moment that solves a major pain point. New categories cause owning brands to “jump the curve” as Guy Kawasaki described years ago in his Art of Innovation book. It’s what Steve Jobs did with the iPhone. When you jump the curve, you don’t need to compare yourself to your peers – you have none. All you need is enough marketing budget and brains to evangelize it to the market. Psyops, not feature checkboxes.

Examples of category creators abound and include brands like Google, Netflix, Uber, Salesforce, Airbnb, and many more. In the luxury watch industry, Hublot (where I once worked and ergo the reason I’m a huge fan of category creation) was a category creator. Data shows (according to Play Bigger) that such companies not only own over 70% of their market, but are also, for all intents and purposes, un-disruptable. Essentially, when done right, category creation creates an impenetrable “market of one”. And that, from an investor and public market perspective, is the golden goose.

Now, “new categories” and competitor-less markets are not typically associated with industry analysts. Why? Because for starters, analysts typically focus on established categories. The clients they serve – mostly large enterprises – are usually interested in placing bets within existing categories (there are exceptions).

Then, established categories typically comprise a myriad of vendors. That can be confusing to buyers, which is exactly why analysts evaluate and rank multiple vendors within categories (via MQs, MarketScapes, Waves etc). But a new category has no competitors by definition. So how does a “new category” vendor leverage analysts assuming it can even get the time of day from them?

I certainly don’t purport to have all the answers (feel free to ping your thoughts on the IIAR> LinkedIn group), but here are some musings on what I’ve learned about this in 2022:

The selection of analysts you work with should always be judiciously compiled but even more so for “new category” AR. Guy Kawasaki once said about technology evangelism: “Look for agnostics, not atheists. You’ll never convert an atheist”. I think when it comes to new categories, you find three kinds of analysts. Those who will never buy into it (skeptics, not convenient, vested interest in existing categories, etc), those who can perhaps be swayed, and those who are likely to jump onboard for various reasons (career-building, personality, past experience, whatever). It’s wise to pick analysts from the second and third category while also scoping out those who might just become what I call “disciples”. Those are the folks you may even hire someday.
A vendor can never convince an analyst that its new category is real and legitimate no matter how many briefings, inquiries, dinners, trips, advisories, you name it. Most of the time, the analysts will nod politely and think to themselves “These guys are just putting a fancy label around a bunch of bundled functionality”. Or, “They’re just renaming an existing category”. The only time an analyst will start thinking a category is legit is when s/he hears about it from customer inquiries and other interactions (events, roundtable, etc). Which brings me to:
In category creation AR, the best thing you can do is incessantly connect analysts with well-trained customers. Which means, for starters, you need a seasoned customer advocacy strategy and program. Why? Because you’re going to need customers to reach out to analysts and ask them about your new category. Which also means they better have mastered the category taxonomy. When analysts start getting more and more inquiries around your brand and its new category, that’s when the little alarm bells go off in their heads.
Online review platforms like G2, TrustRadius, and Gartner Peer Insights (GPI) influence your market and your analysts. This is especially true for those “digital natives” Chris Lochhead often refers to (the ones who don’t read Inc, Forbes, or Gartner). Problem is, you can’t create new categories on those platforms. Why? Because you need to show any proposed category as having 6-10 players in it already – which by definition makes no sense. GPI – which is arguably the most influential review platform for enterprise segments – will not create a new category just for the asking. Which doesn’t mean you can’t ask your customers to write reviews in “category-speak” (see #2).
You should expose the entire trilogy of category design (as defined by Play Bigger) to analysts and not just certain aspects of it. This means you should enlist analysts’ input in product, category, and company design. Brief around the category concept, then brief around how the product supports it, how your culture supports it, and how your customers benefit. In other words, put your money where your mouth is. Analysts need proof points, not preaching.
All analyst firms are not created equal. While top-tier firms like Gartner or Forrester will never write a paper or make a pronouncement about your new category (at least publicly), plenty of other firms will. Why? Maybe they want to get ahead of a market trend and be “first to print the news”. Maybe they’re eager to be part of history. What do you think happened to the reputation (and careers) of analysts who first wrote and talked about and promoted CRM? For some analysts and firms, betting on the “right” category can be a career-making move. See #1: find the right firms and the right analysts.
What analysts share with clients “behind the curtain” is often much more influential than what they say publicly, if anything. What you want are prospects and customers asking analysts about “this new category thing”. And you want the analysts well versed in what this “new thing” is. What makes it “new” and what makes it “different”.
Few vendors will have the stamina and discipline to use “new category AR” effectively. It’s extremely time and money consuming. It’s a long-game play. Truth be told, in this new category game, analysts are near the end of the funnel – they sometimes cross the chasm, but only after all the other chariots already have. So timing is critical. However, as one of my distinguished peers in the AR community says, “A vendor can launch a category, but Gartner (or Forrester) can make a category.” – an important distinction in the tech B2B space.
Involve the analysts very early on. Pressure test taxonomy, messaging, positioning and GTM with them before these things are fully-baked. More importantly, test the “different not better” and “unique insight” part of the proposition with them – after all, this is the foundation of a new category. And if that doesn’t pass muster with analysts – who spend their lives talking to customers – then you know you have a problem early on.
Last but not least, for those skeptical of using analysts to support category design and creation, read these two excellent papers from Forrester here first and then here. A good number of my AR peers who have been at this much longer than myself are quoted in these papers. Yes Virginia, there are legs under category creation AR programs! 🙂

I hope this information can be useful to other “ Category Creation AR” practitioners (CCAR – we need yet another acronym don’t we?). I would love to get comments and insights from those of you out there in the trenches. It’s my belief that this is one of the newest most exciting AR fields out there – I’m as open to dissenting opinions as supportive ones!

By IIAR> Member Jerôme Pineau / CCAR Consultant (LinkedIn, @JeromePineau).