Highlights

• The art of category design is executive alignment.
• Category designers are driving change, and their number one job is to get everyone on the same page.
• Why Salesforce is probably the greatest example of category design in enterprise software.

Summary

The concept of category design comes up repeatedly with every new investment Notion Capital makes. Why? Because each one of them is doing something fundamentally different. They need to define the unique problem they solve uniquely well and create the category that they uniquely serve. Over the last few years we have been fortunate to spend time with the team at Play Bigger, whose thinking has influenced us and many of our leaders. In this conversation, based on an interview recorded in January 2020, we are talking to Jennifer Johnson. Jennifer is a three times CMO and enterprise software category builder. Now CMO of Tenable, JJ is also Category Design Evangelist at Play Bigger.

How has category design evolved as a discipline for technology executives?

I believe we're on the third wave of the Tech CMO. In the first wave, the CMO skills that were valued were more creative in nature and you saw a lot of CMOs come from brand and communications. Then, with the rise of marketing automation, you started to see the rise of the data-driven CMO, and everyone wanted a CMO that could connect to revenue.

Now I think organisations are realising that while, for example, the data-driven CMO is incredibly important, category design is about understanding your place in the world and who or what you're disrupting.

What I call the ‘third wave’ of CMOs are often coming out of product marketing because, especially in enterprise technology, they understand the go to market, they’re comfortable with the technology, sitting between the product teams and the customer and pulling out the often very technical story necessary to demonstrate where you fit in the world. That skill set is mandatory for category design and very natural to product marketers. The more I talk to technology leaders, the more they want category design. This is one of the big trends of the 2020s; category design.

Category design was born from the world of consumer brands. Go down the aisles of a supermarket, and you are overwhelmed with categories, but some really stand out. And if we think about enterprise technology with a grocery store analogy, you have 100 shelves that are overflowing. Every market is so crowded. I work in cybersecurity and the problem is magnified many times over. Twenty years ago there weren’t that many companies. Now? Thousands. Go to the conferences and everyone sounds the same, so how do you pick you from that crowded shelf and take far more than your fair share of the market?

You have to stand out and put yourself in a bigger box.

Let’s take a step back. What is category design? And why is it so important?

The fundamental premise of category design is that you are challenging the status quo. That could mean the status quo of solving a particular problem. That could mean challenging the incumbents who are trying to solve a particular problem in a way that is no longer sufficient. But it all starts with disrupting and challenging the status quo and providing a vision for a new way to work or live.

But why do you need it? You need it because a founder saw a problem that wasn't being solved or was no longer able to be solved the old way. That’s always the premise of a founder story.

It all starts with the problem. So why do you need category design? Some people say, "to cut above the noise." That's true, but category design is more than branding and more than messaging. It's a different way to solve a problem. And I keep saying the word problem intentionally because it is all focused on the problem that you are solving and proposing a new way to solve it.

But the reason that people really need it is because there are so many companies to compete with and so many companies getting funding and all of these markets are so crowded, meaning it's really hard to go in and challenge an incumbent in the market that they have created.

So you have to be clear on the problem you're solving first. Because if you're not clear on the problem you're solving, how can you be clear on your new way of actually solving it and your vision for solving it?

Category design is the missing skill in the CMO's arsenal. There is a more strategic role that the CMO will play as a category creator and that transcends marketing; it's really about company strategy.

When is the right time for the founder to start the journey?

There is no one ideal time. There are different moments in a company's life cycle where it makes sense to build a category. Logically you would think, ‘well, as a startup, right from the get go is the time to start building your category’. So you come out in the right way, with the right story and differentiate yourself from the beginning.

The flip side of that though, is that you may not have the air cover, you may not have the brand recognition to go up and challenge the status quo. So you have to just understand that if you're going in early and doing it, you have to be committed to it. And that can be tough as startups need to be agile.

So there's no perfect time, you just have to understand the pros and cons of where you're at.

Can you talk us through kind of how a category would take shape? I mean, you've been through this, is it three different times? Is there a standard pattern to the process?

There’s no one-size-fits- all but there's a couple signs when you know that something good is happening.

So the first is what I'd call more of a branding messaging indicator and the good thing is that other vendors in your market or in other adjacent markets, start leveraging your category name or your positioning, and start using the words that you use. Whether its competitors or analysts. So the more people in the market, the more companies in the market that are talking about it, the more validation it is.

The second would be when your customers start using it. And when I say using it, I mean that it could take the shape of new roles in an organisation. A lot of times, when you're shaping a category (at least in enterprise software), it creates a new function or a new process or a new role within an organisation.

One sign people look for is when you get an MQ from Gartner. What I will say to that is, “Good luck, if that's what you think that building a category is, you're going to be waiting a long time!”

What are dead ends or pitfalls that companies should be aware of?

Play Bigger talks about "Gravity' in their book.

I think that is the perfect way to describe it. Usually you go out with this big category, and it's the new shiny toy and the big message and everybody grabs on to it. And hopefully it's the right one and the customers say, “Yes, that's right. I want that vision. I like that.” Then you have to resist the category to pull you back because you have to continue to deliver as the category visionary.

So if anyone who's building a category thinks it's a “one and done,” so they go out, announce it and then let it take shape naturally, it's not going to do that. It takes care and feeding and you have to be the one shepherding it. That means making sure that your product strategy is in line and that you're continually showing momentum on your product strategy towards that vision. Because if you don't deliver on the product fast enough, your vision becomes a marketing message and you don't want that.

For example, you need an ecosystem.

You’re never going to fulfill your entire category vision on your own. If you can, your category vision is not big enough. You need to have a vibrant ecosystem through your alliances, your employees, your sales team. And then you have to deliver on all fronts, particularly in product. If not gravity will pull you down as the sales team comes back and says, “Yeah, sounds great, but we can't sell that!” And they go back to selling what they can.

And so the CMO has to be a change agent in their company, because there's going to be a moment where you have to fight to get people on board. And that's why I always say the CEO has to be the true shepherd of the category because ultimately, it does become a company, movement and transformation journey.

Those are probably the biggest realities of building the category.

It’s about aligning your category with your company's strategy, your product strategy and your go to market strategy. That's where the magic happens. And it sounds so easy, but anyone who's who's been an executive in a company that's listening to this knows it’s much easier said than done.

So where do you suggest people start, what are the kind of the first steps that you would suggest the first time it takes?

The very first thing I would recommend is to get every executive in the room and in the first session we focused on just one question.

"What problem are we solving?"

We spent four hours on it. Why? Because I guarantee you, if you ask 10 people at a senior level in your company, you're going to get 10, at best 10 similar, often very different answers. So getting everyone aligned on the problem is really important.

And then the second session, again one question.

"So we are all aligned on the problem. What's the answer?"

Getting crisp on the problem helped us get to the answer. And, the real art of category design is executive alignment.

You should read the Play Bigger book for the detail of the process: creating a point of view; creating the blueprint; building the ecosystem. But that's the science behind it. The real art behind the category design process is executive alignment and change management and weeding out anyone who's not on board and getting everyone on the same page.

The CEO should love this process and love the CMO for making it happen, because it's helping create company alignment. The CEO owns the strategy, the CMO is the change agent for the Category Design process. All the senior execs, from the CEO down, have to be on message and believe the story wholeheartedly to be able to sell it..

So which companies have done or are doing a good job on Category Design.

I'm doing some research right now and looking at what Marc Benioff, Founder and CEO, at Salesforce and I would also say he's the best category designer in the enterprise tech industry.

Go back 20 years, they set out to solve the problem of cloud, using Salesforce automation and then CRM as the way to do it. They went out to defeat Sievel and they framed the problem they solved brilliantly. The problem wasn't the product, it was the deployment method. So they came up with the strapline, “No software.” For anyone with an on-premise solution, they were spending a lot of money on it, with an army of consultants, many challenges and costs.

Salesforce saw this bigger vision even back then, to solve the on demand problem with cloud computing. First it was SFA, then marketing, then service. They now have Mulesoft and Tableau for Analytics.

This is a startup company that came out of stealth mode and took on Siebel and Bloomberg called them the “ant at the picnic,” and an SMB tool. And now look at them. They're a $160 billion dollar market cap company. And it's pretty amazing. So if anyone wants to look at how Category Design is done right, go look at the history of Salesforce. What’s more, I don't think they're done yet. I think Benioff has a bigger play around cloud that's beyond CRM.

A final thought?

For any CMO out there I think we're just at this inflection point of the role of the CMO in Enterprise Tech. I think every CMO should look at themselves and say, “What kind of CMO am I?” Or, “What CMO do I want to be?” They can choose to be the operational demand gen CMO; the analytics and data-driven CMO of marketing, which is needed of course. But I do think there is a bigger game to play. So do you want to be a Category Creation CMO? What I call, the Chief Market Officer. So that’s the inflection point: marketing or market. And I think category design is your playbook to become the chief market officer which I believe is the most strategic role a marketer can play.