Entrepreneurs, start up founders and leaders are often told that the key to winning big is to “create a new category”. This is terrible advice. Why?

Customers rely on familiar categories to as shortcuts to finding products that match their needs. Most of us tend to think in categories first then consider specific brands or products:

"I want a whisky" > Macallan > 18 year.
"I need a new car" > Tesla > Model 3.
"I’d like a frying pan" > Le Cruset > something orange and heavy.

Unlike existing categories that consumers understand — whisky, car and frying pan — if you deliberately invent a new category you make your product hard if not impossible to buy because people are not looking for it and are deprived of the reference points they use to steer them towards a good purchase.

This is why game changing innovations are typically marketed in familiar terms. The iPhone is called the iPhone after all. And Tesla have marketed themselves as cars with zero emissions, not electric cars until very recently.

So where does the idea that we should create new categories come from in the first place? It’s a case of mistaking an emergent outcome with deliberate strategy.

Clearly products do spawn new categories: smart phones, EV’s, etc. But these terms are almost always coined by consumers or the media after these products successfully distinguish themselves as superior or innovative offerings within an existing category, rather than by the brands themselves as part of a marketing or product strategy.

In other words the formation of new categories is usually the result of consumer behaviour, not the contrivance of a would-be category creator, and confusing the two is a mistake that typically ends in disaster.

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