The Key Differences in Market Education and Category Creation

Educating the Market vs. Category Creation

"Nothing is harder than changing the status quo"

Aug 2023

Both "educating the market" and "category creation" (or "category generation") involve introducing something novel to potential customers.

However, they address different levels of innovation and require distinct strategic approaches. Let's dive into the nuances of each.

Educating the Market

When we talk about "educating the market," we're referring to the process of helping potential customers understand the value and benefits of a new product, service, or concept.

The primary focus is on:

  1. Awareness: Making the target audience aware of the product or service.
  2. Understanding: Simplifying complex ideas so the audience comprehends the significance and utility of the offering.
  3. Adoption: Guiding customers on how to integrate and use this new solution in their existing routines.

In essence, educating the market often arises when the product or service is an improvement or a variation on something that exists but isn't widely recognized or understood.

Category Creation

Creating a category is about carving out an entirely new space in the market.

It's not just about a new product or service, but about creating a new category that the product or service represents.

Creating a new category requires:

  1. Vision: Proposing a shift in perspective or an entirely new way of addressing a problem.
  2. Differentiation: Emphasizing how this new category is distinct from existing solutions or categories.
  3. Leadership: Establishing the company or brand as the foremost expert or leader in this new category.
  4. Evangelism: Building a community of early adopters and enthusiasts who will champion this new category.

A classic example of category creation is Salesforce with their "No Software" mantra, pioneering the cloud-based CRM space. Before them, CRMs were predominantly on-premises solutions. Salesforce didn't just introduce a new product; they advocated for an entirely new way of thinking about software.

Key Differences

  1. Scale of Innovation: Educating the market might be about introducing a novel product or an innovative feature. Category creation is about presenting an entirely new way of thinking or a fundamental shift in how problems are solved.
  2. Duration and Commitment: While both require effort, category creation often demands long-term commitment and significant resources to shape perceptions and behaviors.
  3. Risk and Reward: Category creation is riskier because it challenges established norms. As we all know too well: nothing is harder than competing against status quo. However, if successful, the company can dominate this new category, at least initially.

Nothing is harder than competing against status quo.

In summary, while educating the market focuses on helping customers understand the value of a solution that goes beyond the normal journey of problem to product awareness, category creation is about defining and leading a completely new space in the industry.

Aug 2023
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