Should You Create a Category or Win an Existing One?
Product Marketing
bio
‘We’re creating a new category’.
When you put that on a B2B slide deck, it feels good. Trailblazing, ambitious, you’re an Entrepreneur with a capital E!
Then the actual work starts, and the bill arrives.
Category creation can be a real strategy, with real winning outcomes. It is also the most expensive marketing decision a company can make, and choosing it for the wrong reasons can cost the business dearly.
The two paths, defined
Category creation means teaching a market to name a problem it has not named yet. There is no search volume, no analyst grid, no budget line, no review site page. You fund the education, and if it works, the market you built has your fingerprints on it.
Category entry means competing inside a category buyers already understand. They know the name, they have a shortlist, and someone has already approved money for it. Your job is to become the obvious choice for a specific slice of that market rather than to invent the market.
Both can win. They cost wildly different amounts.
Why creation sounds so exciting
Creating a category means you capture roughly 76% of the total market cap in their category, according to research from Play Bigger. Everyone else is splitting what is left. Winner takes most.
HubSpot spent years building inbound marketing into a thing people said out loud, then sold software into the demand it created.
Those stories get told a lot. The ones that do not get told are the companies that spent three years naming something nobody adopted, ran out of runway, and went back to calling themselves what their buyers already called them. Survivorship bias makes category creation look way more successful than it is.
What category creation actually costs
Three costs, and only one of them is money.
Budget: You’ll need about $100M+ for a genuine category build. Can you fund two to three times your normal content, events and analyst spend on material that educates rather than converts, for years, without cutting it when a quarter goes pear-shaped?
Time: Real category creation runs six to ten years. You might name the thing in a quarter. Getting analysts, buyers and competitors to use your name takes far longer.
Sales friction: Every rep has to open by explaining a category before they explain a product. Every deal needs money from a budget that doesn’t exist. Your champion has to sell an unfamiliar idea internally before they sell you. Cycles stretch, and close rates suffer.
Four conditions before you commit
Category creation makes sense when all four of these are true. Not two. Not three. All four.
- A visible market shift: Regulation changed, a platform shifted, buyer behaviour moved. Something outside your company created an opening.
- Buyers describing a problem with no name: In interviews, people talk around it, use three different phrases, and reach for analogies. They can’t quite explain what it is they are missing.
- Patient funding: Resources that survive three or more years of soft pipeline, and investors who understand they signed up for a long wait.
- A product that existing categories genuinely cannot hold: Test it honestly. If an analyst grid can file you today, you are entering a category, whatever your deck says.
What winning an existing category looks like
Repositioning inside an established category is cheaper for one reason: the demand already exists. People search the category name, budget is allocated to it, and buyers arrive with a shortlist. You are redirecting attention rather than creating it, this is a far more predictable and well-worn journey.
Zoom entered video conferencing when Webex, GoToMeeting and Skype had it locked up, and won on a single repeated claim about reliability.Klaviyo entered email marketing, a category so old it was practically furniture, by building for ecommerce specifically and saying so on every page.
They didn’t build a new category, they simply made a product that was better, and went on and on about one particular strength it had.
The work looks like this:
- Interview recent wins and losses, and record the language buyers use
- Pick the segment where your differentiators matter most and commit to it
- Rewrite the sales narrative first, then the site, then the campaigns
- Fix your comparison pages and review site presence, since that is where shortlists get built
- Give sales proof for the claim rather than adjectives and exclamation points
Cost is measured in weeks of research, and a normal marketing budget. Early signals show up in two to three quarters through win rate, cycle length and how often you make the day-one shortlist.
Category creation vs category entry
The middle path most companies want
There is a third option that gets ignored because it sounds less exciting: own a segment inside a known category.
You keep the category name buyers already search for, then claim a specific slice of it. Payroll software for restaurant groups. Observability for teams running Kubernetes at the edge. Analytics for RevOps leaders who report to the CFO. The category identification means you’re findable and relatable, the segment ensures you get picked by those specific target companies.
This is where most B2B companies find their best return, and it takes months (rather than years).
How to tell where you sit right now
Three simple checks you can do today:
- Look at the search volume for the category name you claim to have created. If it is flat and tiny, the category exists in your marketing rather than in the market.
- Look at your last twenty deals. Which competitors showed up? If they come from a category with an established name, that is the category you compete in.
- Read how your champion described you in the internal email that got you the tick. Buyers reach for the name their CFO already understands. That name is your category.
Should you create or continue in a category?
Category creation works when a market shift, an unnamed problem, patient capital and a genuinely uncategorisable product line up at once, and that is rare. It’s like finding a unicorn riding a tricycle.
For everyone else, the faster path is to take the category buyers already know and become the obvious answer within it. Less romantic and exciting in the slide deck, but way easier in the pipeline.
FAQ
What is the difference between category creation and category entry?
Category creation means building demand and vocabulary for a market that does not exist yet. Category entry means competing inside a market buyers already recognise, with existing search volume, budget and shortlists.
How much does category creation cost?
Estimates put a genuine category build at $100M and up over six to ten years, or roughly two to three times normal spend on education-led marketing. The bigger cost for most teams is the sales friction while buyers learn the concept.
Is category creation ever worth it?
Yes, when a real market shift has opened a gap, buyers describe a problem they cannot name, funding can survive several soft years, and no existing category can hold the product. All four, not some of them.
What is the alternative to creating a category?
Own a segment inside an established category. You inherit existing demand and differentiate on the slice of the market where your strengths matter most, usually within a few months rather than years.
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