Why create a category and what to look for?

From Garin Hess’s Guest Appearance on Metadata’s Category Creators Podcast

Building a category is harder than people realize. I lived the process and experienced the grind for about 7 years before Consensus gained any traction in Demo Automation, and we’re still working on it.

We came up with the phrase ‘Demo Automation’ more out of hope that it would materialize into something bigger. It eventually materialized, and of course we feel fortunate about its adoption.

But there’s so much to the story of getting things to this point. None of it was easy and I’ve had to force myself over the years to ask repeatedly whether or not creating a new category is really worth it. Unfortunately, the answer isn’t cut and dry. You do need to find (or create) a category that achieves product market fit because, if you don’t, the market will try to put you where it thinks you should go – not necessarily where you need to go. 

Aligning with the right category is crucial to finding your ideal customer, even if you do have to go it alone for a little while. 

Our Story

I’ll start with who we are and how we got here.

Consensus is Intelligent Demo Automation software. We scale Presales teams and improve the buying experience with interactive video demos. SEs create or upload demo recordings into a reusable library of video and downloadable content, which AEs share with customers and prospects as links in an email or as CTA’s on a website. The platform personalizes the experience, making it interactive by letting buyers select the segments of the demo that matter most to them, and then curates the content based on those selections. It prompts buyers to share the experience with other stakeholders, and tracks all the engagement with real-time reports for AE and Solution Consultant teams. 

SCs deliver 40% more demos YoY, and so by automating a significant portion of the more generic, repetitive demos, Consensus eliminates unqualified demos and demo lag times, shortens sales cycles and increases close rates. Instead of wasting time on unqualified intro demos, teams can spend a lot more time on discovery and technical demos with qualified customers. And the entire experience automatically enables buyers through their buying journeys.

Back when we first started selling to Presales teams, there wasn’t a market for Presales software. Think of all the tools that make up Marketing Automation and Sales Enablement: they comprise hundreds of billions of dollars. Compare that to the percentage being poured into helping SC’s be more effective. At the time (2 or 3 years ago), there was nothing.

When you have something that’s so innovative that there is no category, then everyone tries to lump you into categories that don’t fit. When that happens, it’s hard to compete because you’re not exactly what customers are looking for in that category. 

We used to get lumped into Marketing automation, sales enablement, even in presentation software for a time. In buyers’ minds, they would naturally assume they were comparing similar solutions for a common problem. 

It didn’t make sense. While we’ve always fit into the sales process, what we were really doing was enabling buyers to arrive at group consensus fast, while helping Presales get a lot more from their existing resources. They’re problems that persist today. Our latest SE Comp and Workload report shows that every Sales Engineer on average supports 4 other sales people and that the Demo Lag time is between one to two weeks. 

We’d come up with something innovative and disruptive, for which there was no category. When that happens, you end up floating away from everybody else while people in the market try to stick you somewhere convenient for them. It’s hard to win in the right ways when you’re forced into unfitting territory. 

For us, it was like climbing really quickly up a ladder leaning against the wrong wall. Yes, we were able to complete the task (selling our software), but when we got to the top we realized we hadn’t actually accomplished what we set out to do.

So, you want to create a new category

You don’t want to HAVE to create a new category. Maybe you lucked out and got put into the correct, existing category right away. It could be that you are in the wrong category, but the right category already exists and you just need to adjust the market’s perception of you.  

If the right category truly doesn’t exist and  your marketing strategy is to create one, then be prepared to spend a lot of money and time before it’s recognized. We’re still in the early stages of getting this category formed. I’m still on the learning curve just as much as anybody else.

But you have to take the mindset of creating your own battlefield. You have to manufacture spaces that uncovers a portion of the market that no one else has thought to explore and intrigues them to join in. The problem is, if you create a battlefield and there’s only one person on it, there’s a risk of being perceived as ‘just some misfit over there.’

Occasionally you have the early adopters who will come over and ask, “What are you cookin’ up?” Some will get excited, but they don’t realize the battle hasn’t really begun without a swell of customers and competitors vying for their attention. It’s hard to get people to want to join the fight and raise the profile of what you’re creating.

You’re trying to get everyone in the target market to realize that the way you solve problems is unique and everybody needs it. For us, that meant changing the argument from: “Do we need to scale presales by automating demos”, to, “We need a demo automation platform, should it be Consensus?”

Once the category is formed, you have an opportunity to become a budget item. Or at least the category does. The category gives the market a way to frame you. They understand better what you do and it’s easier to convince them your product is a necessity. 

Because you’re not a lone misfit on the field anymore, they really feel like this is something that everyone is doing. Until then, you’ve got to go look for competitors.

When you create the category, theoretically, you have the potential of leading that category. In practice this  isn’t always what happens . It can be dangerous to be first because now that you plowed the road, people can drive really fast on it after you. It becomes a balancing act: you want to have competition, but you don’t want them to overtake you as the category leader. 

The Role of Your Early Customers in Category Creation

So let me say a quick word about those early adopters, the innovators, who start to take notice. These are your most valuable assets. As a category creator, you develop a kind of symbiotic relationship with this group in which you’re both giving and taking. You’re giving them a vision of something they’ve likely never considered before, or at least the idea of it hasn’t taken solid form. But you’ll get from them the refining and the catalysts to move things in a direction that shapes your future, theirs and the category you’re creating together. 

It really becomes something you build collaboratively. Those early customers generally understand that there’s a lot more innovation to come but are willing to take risks – sometimes huge risks to their budgets, their performance, their reputations, their jobs – to shape this thing into what it needs to become. Never take them for granted. You don’t have to say yes to everything they ask for, but you need to be deeply engaged in understanding their motivations and objectives – including the emotional ROI associated with their decisions – in order to optimize those relationships. You cannot succeed without them.

The Role of Analysts in Category Creation

Building relationships with analysts is also paramount to creating a category. As I’ve gone through this process with Consensus, I’ve learned from advisors who’ve created categories and done research. It has become clear that the most important thing when it comes to engaging analysts is building actual personal relationships so that they care about you and your company.

If the category isn’t there, you have to convince these analysts that there may be a category. That requires market momentum – real adoption from paying customers is step one (refer to the section above, about those early adopting customers, again and again). 

Beyond that, you’ve got to be very persuasive, and it just can’t be your word alone. You’ve got to get those early customers on the phone, big customers so they take notice.                       

Why should they believe you? Analysts suspect every vendor of being as self-serving as possible because we’re all pitching our companies. They’ll be skeptical of you, interested but skeptical. You have to break down the skepticism. Just like a new customer, you have to bring social proof in. Otherwise, the analysts will just keep digging.

We had one analyst over at Gartner who was an early believer in Consensus. She fell in love with what we were doing, so even though there wasn’t a category yet, we built a relationship up enough that she recommended us to the “Cool Vendor” recognition which is the highest recognition you can get when there’s no category. That helped us get a leg up. And she introduced us to more analysts, allowing us to further build our case.

Analysts want to feel valued, it’s not just about learning from you in one direction, they want to give you advice. That’s one thing I’ve learned from Gartner, because we have a relationship. Their analysts are really smart and are wanting to provide guidance. 

It’s really valuable to pose the problems you’re dealing with as a company to them and get their input. It goes both ways because if you take their advice and it works, you build them up because who doesn’t love to give advice and see it work?

The most important advice for CEOs thinking about what they should do with the category creation:

There are two things which I think are most important to keep in mind when creating a category. One is to continue to advocate for your organization to make sure you’re in the correct category. Second is to talk to analysts and build a relationship with them. 

We were selling to a world wide leader of sales enablement, into Salesforce. I remember we had a slide in our slide deck that detailed the basics  of sales enablement followed by one that showed Presales enablement. I was laying out all the technology for sales and comparing that to how little technology that had been built to enable presales. He told me later this blew his mind because no one had put it that way before. 

Don’t be shy about stating your category. If you have a category, you’re saying you’ve defined a specific market that uniquely needs you and maybe a few others. Don’t be shy about speaking up when the category isn’t a good fit. You can absolutely say, “I’m not these, I’m not in this category. If you put us in this other category, it’s not going to go well. We’re not going to solve the same problems, we’re over here.” 
Then get out there and talk to analysts and analysts firms. They care about the category, they care about their research, they care about they’re reputation, so if you can get them to care about you as a company you can add validity to the necessity for creating a new category. Try to build a relationship as early as possible.