584. The Category Creation Formula

Speaker A: Welcome to episode 584 of the Brainy Business. Understanding the Psychology of why People Buy. In today's episode, I'm excited to introduce you to Kevin Maney, co author of the Category Creation Formula.

Speaker B: Ready? Let's get started.

Speaker C: You are listening to the Brainy Business podcast, where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer.

Speaker B: Hello.

Speaker A: Hello, everyone. My name is Melina Palmer, and I want to welcome you to the Brainy Business Podcast. Imagine, a new competitor enters your space tomorrow in a big way. Do you feel that little jolt of panic, like there's suddenly less room for you and you have to fight harder to hold your ground? That instinct is incredibly common, but that doesn't mean it's right. Sometimes a competitor showing up is exactly what makes people believe your category is real in the first place, which is, of course, what we're talking about in today's episode. My guest today is Kevin Maney. Kevin spent 22 years as a columnist, editor and reporter at USA Today, much of it covering technology, and has gone on to write several books, including the definitive history of IBM, the Maverick and His Machine, and the New York times bestseller the 2 second advantage.

Speaker B: A decade ago, he co authored Play

Speaker A: Bigger, which introduced the concept of category design and has sold more than 250,000 copies worldwide. Since then. As a founder of Category Design Advisors, Kevin has helped leadership teams at, uh, more than 100 companies think through their strategy, and that experience is now distilled into his newest book, the Category Creation Formula. As you listen today, really think about your company and the category you're in through the lens that Kevin provides and whether you actually have the right amount of competition or if it might be time to create a new category really quickly. Before we get into the conversation, I want to be sure you know that there are links in the show, notes for my top related past episodes and books, ways to get in touch, and more. It's all within the app you're listening to and atthebrainybusiness.com 584.

Speaker B: For

Speaker A: now, let's jump right in. Kevin Maney, welcome to the Brainy Business Podcast.

Speaker D: Yeah, great to be here, Molina. Thanks for asking me to be on.

Speaker B: Of course. I'm super excited to chat with you today. Loved reading about your work and learning more. For everyone who doesn't yet know you, can you share a bit about yourself and the work that you do?

Speaker D: Yeah, uh, I guess the short version is that, uh, I've been a journalist and author writing about the tech industry, big ideas, big strategy things for almost four decades maybe. Yeah,

Speaker B: those are the things we start to say that we go wait, that can't be right.

Speaker D: Right. Um, but a lot of books, but one of the books that came out 10 years ago called Play Bigger, definitely the most successful book I've been a part of. The um, proposed this concept which we're sure we're going to talk about today called Category Design. And uh, that led to uh, over the past 10 years running a advisory ah, strategic advisory practice called Category Design Advisors. We've worked with 50 plus companies over those years, spoken to hundreds others and just have this brand new book out called Category Creation Formula, um, which is based on that 10 years of basically like field testing, field research, um, studying more about how market categories work and kind of capturing that all in the new book. So that's where we are today.

Speaker B: Yeah, well digging in a little bit on the background there, I mean how, how did you get, were you in like journalism first and you happened to like get assigned to like a tech beat and you go oh I'm so glad that that happened. Or were you really interested in like technology and that sort of stuff and happened to get into journalism? Like what's that background?

Speaker D: Like all the best things in life that happened by accident.

Speaker B: I figured there was some serendipity in there.

Speaker D: I, I, you know I, I was a writer from the time I can remember and that's what I wanted to do in my life. And um, went to school for journalism and English and uh, knew nothing about technology whatsoever. Um, but I did grow up in Binghamton, New York which is next door to Endicott, New York which is where IBM basically was. Grew up and all through my younger years had a, you know, an enormous presence. Um, and I got out of college. I um, there's a, was a thriving at the time local newspaper called the Binghamton Evening Press and um, I had interned there. I applied for a job after college and they got back in touch with me and they said um, well we have two job openings and one is to be the night cops reporter. So I'd stay up all night running around after crime scenes or I could be a business reporter and I thought business reporter sounded more sane. And if you're going to be a business reporter in Binghamton New York the main thing you're going to cover is IBM. Um, and so I started doing that first of all realized that I really liked it. I liked trying to understand what was going on in technology and then trying to explain it in a very coffee table kind of way. Um, and then the other serendipitous thing that happened was this was the, you know, mid-1980s, just when the personal computer started to get into people's lives. And for the first time people cared about technology. And so, um, there suddenly was a booming demand for technology journalists. And I got to ride that wave. So it all worked out. And then the book thing was totally another total accident. I. I was writing, I was at, at USA Today, I was their technology journalist columnist. And, um, in the early 90s, I started writing about this thing called the information superhighway,

Speaker B: that thing.

Speaker D: And, um, and I started writing a series of stories about, which was a new concept at the time, how all media was going to become digital and what that would mean. And I ended up out of the blue getting a call from a book editor at, uh, John Wiley and Sons, saying, um, did you ever think there's a book in that kind of stuff that you're. That stuff you're writing? And uh, so that turned into my first book called mega media shakeout, which happened to come out right in the middle of the dot com craze. And, uh, um, you know, got me into the book business so that I love that taking advantage of lucky accidents is what it's all about.

Speaker B: That's life in a nutshell, right? Like, put a. We've done it. That's what it is. Like the, um. There's a really great book. It's called can you learn to be lucky? Um, and in that book she just talks about like so much in serendipity, whatever. It's like very much creating and seeing those opportunities and like when you, when you look for them. And so there are so many people that, um, you know, if it's like, would you do a book and go, oh, no, I bet not, like someone else is going to write that book. Right? And you know, it's like you think about, you know, how different life could have been if you had taken a different road or a different path or how things had, uh, had shaped up. But yeah, timing and you know, a lot of, uh. It's very fortuitous that you got into that work at the time you did. Cool.

Speaker D: And having the attitude of I could figure that out.

Speaker B: There's a whole lot of not quite fake it till you make it, but like, I believe in myself enough to know I can make that happen.

Speaker D: Right. I have no idea how to write a book, but I'll Figure it out.

Speaker B: Right. Well, you know, knowing you've written so many different types of content, do you have tips for people? I think one thing that people struggle with is coming up with ideas for one, like the angle or the way to think about something. Um, but also like, as you think about whether it's like interviewing people, uh, like, do you just pick up the phone and call somebody when you want to talk to them? What a foreign concept. I guess for us especially, uh, yeah. How do you pitch people to, to be willing to talk to you? What sort of tips do you have for. For that? For people that are doing research and things?

Speaker D: Yeah, well, I mean, of course, you know, it's different early in your career. Later. I mean, at this point in time I have such a huge network that I just reach out to, you know, my network and can find people that way. But yeah, I mean, no, early in the career. Of course. The other thing is early in your career you lean on other people, right? You find somebody else who's got a really great network. You say, who else? You know, who do you know, I could talk to and would you introduce me? And that's what I did a lot early on. Um, and uh, sometimes it was fellow journalists, but then it was, you're talking to somebody in the business and you say, who else could I talk to? Would you introduce me? I mean, those are the two big questions, right?

Speaker B: Yes. And the would you introduce me? I think is the question that would be harder for most people to ask. And the really key point in making that happen too, because those warm introductions really make all the difference. And not having to cold pitch, that's, uh, that's rough. Nobody likes to do that.

Speaker D: No, no, no. But yeah, you know, and the thing about coming up with ideas, um, uh, you know, I mean, you're in the. I mean, there's two things. One is that, you know, if you're sort of constantly in the middle of things, you, you, you know, you might have a, ah, get a whole lot of different ideas, but you'll, you know, have all this stuff sort of swirling around in your brain. But I had, um. I've been friends for a very long time with another writer that I'm sure a lot of your listeners will know is Jim Collins, who wrote, uh, Good to Great, Built the Last, all these books. And I remember him telling me something. We were both pretty young. We were talking about this, um, uh, um. And he said, I wait for ideas to find me. Then I thought about it and I thought, you know, most of the really good things I've done in my career, especially the books, have been in this combination of, like, I know a lot about what's going on out there, you know, and I have a lot of stuff in. In my head. Um, but then when a good idea finds me, I know it's a good idea, right. I immediately can put some structure around it and say, um, oh, I get that. That actually makes sense in the world that I know. And I can see a pathway to making something more out of that. Um, so I do think that having the patience, in a sense, to let the idea find you, um, uh, is a good way to operate.

Speaker B: M. I love that. And there's enough of investing that time in researching and being curious and asking good questions and just talking to people that you start to make connections. I know for me, when I've being at the point where I am. And part of this with the podcast is I've gotten to interview so many people with varied backgrounds and where I can see a tie between this person's field of research and that person's field of research. And I brought them together and they go weird. I never even really thought about that from this angle or whatever. But it's so obvious to me. And I love those sorts of, um, connection points and that, like the stuff in the gray, which I think really ties in so much with creating categories. Right. Is you have to see the thing that's not there yet and. And what could be and what someone might be interested in. Uh, so I'd love, I think, you know, good a transition as any for you to talk about. Um, you know, create. What is a category in business? How do we go about creating them? Why does that matter? You know, kick us off. Yeah.

Speaker D: Well, um, there's a couple things that, in your question that I. I would like to address, but let me just start with L. Especially since I. I know how important behavioral economics is to you.

Speaker B: Yeah.

Speaker D: And, uh, and, uh, um. And so there's this one interesting thing, right? So let's just start with what do we even mean by a category? Like a market category. Right. And, um, by my. One of my co authors, Chris Lockhead, had this great saying that, you know, most companies treat markets like it's the weather. Like I can't do anything about it. It's just there. And, you know, but in reality, what a. A market category is a space in people's minds. That's all it is. Right. Um, and, uh, and all those existing market categories, smartphone or laptop or I don't know, you know, eggs, whatever, you know, any of those are all categories that exist. These are space. You know, we have a space in our mind. If somebody says that we, we immediately know what it means. We, you know, immediate mind goes to maybe a, a leader in that space or, or particular one brand we like. But, you know, it's that space exists. Creating a new market category is literally about creating a new space in somebody's brain.

Speaker B: Yeah.

Speaker D: Um, and, and if that's true, then first of all it can be created. It's not the weather. It doesn't just exist, it can be created, it can be influenced. Um, and it can, and it can be, um, built upon and expanded. And so one of the examples I often use if I'm giving a talk is what happened with electric cars. Um, and so 20 years ago, we're here, we're gonna have a conversation about a car to buy. What car do you want to buy? Both of us would. The only cars we'd come up with were gas powered cars. There had been a crappy electric cars that nobody wanted, but there was no space in anybody's mind that this was an alternative. Uh, and then Tesla comes along and actually brilliantly starts out by building this roadster to prove that an electric car could be cooler and faster than any gas powered car out there. Immediately getting a lot of attention and opening up the space in people's minds. It says, oh, this is interesting. Um, and then continues by not only building more practical, um, cars, but also, if you remember, there's this point in time when Tesla opened up its patents, um, with the reasoning that it wanted other companies, other big car makers to make electric cars because that would expand that space in people's minds.

Speaker B: Yeah.

Speaker D: And so now you get this point. Now, you know, 20 years later, um, if we're going to have a conversation about a car to buy, there are two alternatives. There's two spaces and they're not the same ones. Right. There's the space of electric cars and there's the space of gas powered cars. And, and uh, this electric car space is new, but it's there and it's got a bunch of brands in it and it's got, um, a bunch of features and expectations of what it's going to be like. So it was created out of nothing and so any company can do that. It's just a matter of finding the right thing to create in the space to create and then going about it very, uh, you know, very, um, purposely.

Speaker B: Yeah, I really love. I hadn't made this connection necessarily before And I appreciate where you're talking about that, like making the space in the mind and just like hearing it as you were saying it, uh, maybe because you primed it, saying something about how much I love behavioral economics, you know, as the start. But uh, so Richard Thaler and the concept of mental accounting, right, Being where we look at, um, you know, we think about credit like money on the credit card is different than cash in my hand, which is different than writing a check for something. And if things are in different accounts, we think about that money in a different way. The way that it's fungible, you know, is different. And like somebody's less likely to break a bill than if you've got change. And we just think about all of our money in different ways. And I think that there's those kind of adjacent categories as we think about it feels like it has to be this or that. But then someone made credit, right? And then you're like, oh, like I guess that's a thing now, right? As we consider how we sort stuff in our brains, that, you know, that mental accounting piece tied in for me. So for, for others who love that concept here as, uh, you're listening to the show came, uh, top of mind. But we can we just create a category out of, you know, thin air to say like, well, I'm gonna make this thing that's like no one's ever heard of. I think people, when they think about competition, we see one, competitors are bad. So the point you were making there about, you know, Tesla inviting competition may feel counterintuitive to people. You say once somebody's in the space, like, I've lost, right? I need to be the only one. I need to be so innovative and so different. Um, now why is that thinking wrong?

Speaker D: Oh, it's absolutely wrong. Absolutely wrong. Um, and uh, uh, so a couple of things. Um, so one, it's just this idea of the space in your mind, right? Like.

Speaker B: Mhm.

Speaker D: So if there is just one company that's saying we're making this thing, you have some doubts, like, right? I mean, like, is, you know, does this thing important? Um, you know, okay, maybe it seems cool, but like, is that going to be around, you know, and you get things like, you know, you get things like, um, uh, the, um. Oh God, now I'm completely blanking. The motorized scooter that completely Segway. Yeah, Segway complete there. Uh, but you get things like the Segway, right? Like they build this thing. It's a fascinating piece of engineering, but we don't know what to do with it. And nobody else is making one, so that can't be, you know. So having competitors come into a category reinforces that space and opens it up. Now you want to continue to be seen as the, the trendsetter and the expectation setter and the leader in that category. That's your, your job as a category creator and trying to win a category. But you absolutely want others to come in there. Now there's um, the other thing we lean on is um, there was an economist, um, named Paul Garofsky, wrote a book called the Evolution of New uh, of New Markets. And um, uh, and he studied market categories. He took them apart and tried to understand if there was a common pattern. And of course, you know, in anything there's you know, things that get out of whack from the actual, you know, for the simple pattern. But the simple pattern you described basically holds both. It's very intuitive if you think about it, right? So think of that, um, like an X, Y axis, right? And there are um, there are two lines, two trends that are part of this thing. So the first is the number of companies in a space. And so on day one, you know, somebody invents something cool and new, right? There's, they're the only one there. If that thing, if the world really needs that thing, if it should exist, a lot of others are going to see that and say we're going to do that too. They start piling it now, they're going to pile in with a whole bunch of different versions of that. You know, one of the examples you can think of is, is smartphones in the early days, right? Whole lots of companies could see definitely we're going to have these phones in our pockets that connect to the Internet. This is going to be a thing. But you ended up with designs like blackberries and Nokias and six different operating systems and different formats and all this stuff, right? So you want to see that happen because that validates the idea that this, this category is generally right. And so all these companies pile into the space for a number of years now. The market doesn't like that ultimately. Um, so you want to see that happening. But buyers for the most part are wary when that's happening because it's like, am I going to buy this thing and it's going to go away in two years? Is, is this real? What's the best version? It's too confusing. So as that, as that is happening, the number of users or the number of amount of money flowing into that category Stays relatively flat. This is like the early adopter phase, right? Early adopters are testing, trying things out, but most of us are going, oh, wait. And what Guratti pointed out was that there is always a moment in time, um, when the market basically decides on what he called the dominant design. Because we want one version of how things work. Not necessarily one brand, but one way things work. And in smartphones, that dominant design was when Apple, uh, came out in 2007 with the iPhone. And everybody said, okay, this is what a smartphone should be and it should have the app store, the whole ecosystem, it should look like this keyboard on the screen, all this stuff. Right. And dominant design today, no matter what brand you buy, Android, um, or, um, iPhone, um, it all pretty much looks the same. Right? So the dominant design happens and two things happen at that moment in time. One is that the number of companies in the space takes a dive. That's why we don't have blackberries and Nokias and all these other phones around anymore. Um, and, uh, the market takes off because now we're all comfortable with this thing. It's been validated that category exists. We're all in those lines cross. And a smaller number of companies captures this enormous amount of value. Uh, what that tells any company in a space is, uh, okay, cool. By the way, that whole first mover advantage, total bullshit. Doesn't matter who's first. What matters is who wins the dominant design. It's great to be first. That can be a position you could leverage because if you're first and you stay out ahead of things, you could constantly be seen as the one setting the rules for this category and setting the expectations and guiding where this category is going. So you have a better chance of winning the dominant. But, but as a company, your, your target, your bullseye has to stay on. We need to be the dominant design whenever that happens, because that is, that is the ultimate win. Uh, and so all those things come together in that way.

Speaker B: Yeah. And there's that opportunity when you're not first. Like, you might be nearby. Right. But like, you can see how people respond to find, like, let somebody else make some mistakes and you can come in with, uh, you know, creating that dominant design. You don't. It doesn't have to be that way. Like you said, if you have the idea, don't like, wait for someone else to have the idea. Necessarily. Right. But, uh, you can kind of see, you know, like in the case you mentioned, like Tesla, other people had electric cars that were not great, but they're learning from it to see what they want to do. Um, you know, Apple was not the first smart phone that uh, existed out in the world and you know, being able to um, lean into what's wrong to help position and show why yours is the dominant design and what, you know what.

Speaker D: And that's all right actually. Right, and what, um, the conversation we'll have with uh, with uh, a leadership team at a company is um, let's, you know, actually put that chart on the wall and say whatever product we're talking about, where does it, where is it in this, in this timeline? Uh, and because if, if we're talking about something that's before the dominant design, if we could say, you know, dominant design has not been chosen, it's still chaotic out there, um, there's still a winner to be chosen. Um, then we'll say, okay, let's go, let's figure out how to be full speed ahead and, and win that. But if we look at all of that and say, you know what, um, really there's already a dominant design, we're on the back end of that, um, then your choice is either, okay, we're just going to, you know, be a smaller market share in somebody else's market. Essentially thousands and thousands of great businesses are do that and that's fine, right? We're going to take 5% market share of a huge market because we're 10% cheaper than somebody else. That, that can work. The other choice is to say we have bigger ambitions than that. We want to, we want to, you know, create and win and own a market category. Um, so obviously being in this category is we're always going to be the number two, three, five, whatever player we have to get to something adjacent that seems new and fresh. Um, so those are the two decisions you can make. But that chart, that chart can help you make that decision.

Speaker B: Yeah. And so uh, you know, building on that, how does uh, how does someone, you know, a company, how do they decide like yes, we want to go all in and create the category versus, you know, looking to be a little bit small. Is it just like they were excited about it or like you said, it just happens to fit in some other stuff and they're not wanting to put in the investment to make this new thing work. And related question as this goes in the way that it gets expanded here being is creating categories only for tech. Right. And things where we can make the app or do the, the thing like is that kind of where people are stuck and if they don't want to go into that they don't have a category they can create or how can they see the light for other types of categories that might be in different, uh, markets?

Speaker D: Um, I guess I could start with the last one first. Is that. No, I mean these get created all the time in every kind of market. Um, I mean tech is an easy one because it's constant innovation and constant change, um, and uh, you know, less so in things like, I don't know, you know, groceries or um, you know, hard goods and things like that. But you know, I mean you think about, you know, over time everything that exists today at one point was something new that created a new, you know, a new, A new category. Um, I, there, there didn't used to be electric drills. I mean I, you know, somebody, uh. And um. Uh. So, you know, we, when we've got, I mean our, our firm has been contacted over the years by um, we worked at one point with an ice cream company that was, ah, had this idea for um, ice cream that was uh, basically nighttime ice cream. So if you snack late at night it wasn't going to like interrupt your sleep and uh, you know, things that kind of. And um, we recently got contacted by a fragrance company that had a very different idea about what fragrances do. And so, yeah, I mean it's um, it can be all over the map really. Does not just. It just happens to be easier in tech because there's just so much change and expected change.

Speaker B: Mm. Yeah. And these days what's nice is that um, you know, technology can be like underlying in, in making some things possible. Even if that. It's not a tech industry like I was thinking about. I think there's so much in the. Even like a delivery mechanism for things. Uh, so you look at like uh, rent, uh, the Runway as a clothing, you know, like. And so instead of having to buy things, you know, you're able to just rent, you know, use something, send it back and it's, you know, sustainability wise as far as like why that's important. And also it's not as expensive, uh, but they need to be able to build the infrastructure around a company like that, which definitely leans on some technology, but it's not, you know, a tech, uh, brand per se. Like so I love how those all kind of fold in together. So we've told everybody now, like, don't tune out and think it doesn't apply to you. It definitely does. And then, so uh, you know what else as they're kind of deciding, you know, if it's worth creating the category or not. And perhaps this leans in a little bit into, um, either looking into finding those adjacent possibles or into if they were going to sit down and, and do this themselves as a team, as you have some advice on that in the book, you know, what. What might they. They do? Uh, yeah.

Speaker D: Well, and. And again, I mean, just for a starting place, is that, um, that creating a new category, creating something that doesn't exist yet is harder than creating something that, you know is another version of something that already exists. Right. Um, because you're. You have to do the hard work of opening that space in people's minds, of explaining what this is, of making people feel like this is something that is important, that needs to exist. Right. Uh, you know, whereas if you, um, are doing another version of something that already exists, um, you could say it's like this, but cheaper or better or whatever. Right. Um, so there is a certain kind of person that wants to do this or a certain kind of company that has some bigger ambitions maybe, or just really wants to do something to change the way we work and live. Uh, so there is a level of ambition to it that, you know, that you have to have. So in doing this for 10 years and working with companies, we kept seeing patterns of, like, the way the most interesting thinkers think this through. And, um, kept trying to simplify and simplify what that pattern was so that we m. You know, the idea was to get down to something that very simple. We could write on a whiteboard and say, this is going to drive the discussion for the next two hours or something. And, um, so this is what, you know, this new book is called the Category Creation Formula. So the most powerful thing, what we've discovered, I mean, literally the most powerful discussion tool that we found in 10 years is this very simple formula that we can. That leads a discussion. So I'll explain it, and then anyone can do this. It's a great way to, like, try to see if there's something, you know, category creation we could do. So the formula, and I can explain the pieces, is context plus missing plus innovation equals a new market category. And so context, what we'll tell you know, a company is like, put your product aside. Because if you're. All you're doing is trying to describe your product, you're basically just having a marketing meeting. So put your product aside, your company aside. Let's pretend this is day one and you're all sitting here. First conversation we want to have is, who are the people you want to address? What is the target customer? Target audience? And context, meaning what's changing around them, um, what is changing their lives. That could be new technologies. It can be the fact that there's a war in the Middle east and is disturbing supply chains or changing energy costs. Um, it can be, uh, society, people's mores changing or who knows, There's a whole lot of things that are. Context is always changing. And the more that context changes, um, the more opportunities it opens up to create new things. Right? Because it's always creating new problems or new ways to solve old problems. So if you have this deep dive discussion around the context, around your target audience, um, then that starts to lead to the second piece which is missing, which is what's now missing in this new context. What is a problem that your audience has been frustrated with for years and never been able to solve? And maybe in this new context we could solve it. Or for that matter, does the context create an entirely new problem that didn't exist before and now needs a way to be solved? So if you can see what that missing is in this context, it becomes a m. Pretty easy thing to see what the innovation is to fix that missing in this context. And you know, again, tech, yes, you know, a lot of that is technology. But again, it could be, you know, it could be a food, it could be a, you know, um, a kind of makeup. It could be anything. Right? And, um, if you put all those things together, you pretty much guarantee two outcomes. One is you'll see something that, um, that is probably new. Because, because, because you're basically anchoring this in. How is context changing now? Right? So you're going to see something that is probably new. Um, and you're, but you're also going to see something that matters. Um, you're not going to go and create a product that nobody particularly really wants, right? Because now you've actually seen the thing to solve for people and put together a reasonable story of something that has to exist in the world. So if you go through that exercise, um, it becomes the category sort of emerges, uh, the new product or innovation. And product category emerges and you can see it pretty clearly. And then you can apply it to. Okay, now the question is, this product that we've built, does that satisfy what we're talking about? If not, maybe we go back to the drawing board and, and alter the product, or if the product hits that perfectly. Now we have a way to talk about this and a way to make it, um, important to the world that, you know, that can go out into the, you know, messages we send out into the world, the position we put ourselves in and all of that.

Speaker B: I'm curious in, as you said, like, so how often. And, um, you might not have an answer for this, but it feels like if you come back and say, and our product hits it point perfectly. Wow, is it like, okay, we actually didn't think about this well enough. If we're only landing on the thing that we've already made, like, maybe we should, like, revisit this a little bit more. Like, it feels like, because, so I do something, it's very different. But like the, uh, training I do with teams, I call question storming, and we make sure we're working on the right problems. So it's like, similar, but we have a different approach to kind, uh, of how we do these things. And like, if you don't come out of that realizing that you've been missing something, like, we didn't do it right. Like, there's, there's more to it than where you, you were when you began. So it feels like more often than not, like, so especially if someone does this on their own, where you're not facilitating, they go through the process and realize, oh, good, like, we led right back to where we started. Like, maybe they did it wrong. Would that be fair?

Speaker D: Um, well, I think, I think there's a bigger danger of doing it yourself and coming to that conclusion, inclusion, than having an outsider perspective.

Speaker B: Right. Outside facilitators can be like, no, no, no.

Speaker D: Yeah. Uh, I wouldn't say it's necessarily a lost cause. I mean, look, if you, if that's where you land, at least the one thing that you're going to end up having is a far better way to tell the story of why this thing should exist and a far better message for the market, because you're not. Now, you're not saying, which 99% of tech companies do, they say, here's our thing. You figure out what to do with it. That's really.

Speaker B: We made this cool thing. Isn't it cool? Like, go find a way to use it. That's your job now. Right, Exactly.

Speaker D: And so this is turning that upside down and saying, I understand you, I understand what you need, I understand your problem. Um, here's what a great solution would look like. And by the way, I have a product that does that. Um, it's a different kind of message. Um, but I would say that most of the companies we work with, um, they don't necessarily come to the. Some have come to the conclusion that our product is actually wrong, and we've Got to, like, redo the product. Others have come to the conclusion of, okay, our product is. Our product is right for the moment. But now we see what we're about and the journey we need to take people on.

Speaker B: Yeah.

Speaker D: So we can give this story to our product team and they're going to know what the product roadmap is because we have to solve for this. And, uh, it gives, um, even, you know, clients that have been around for 20 years or 30 years, uh, it gives them a real direction. A North Star to work towards. And that can be very powerful too.

Speaker B: Yeah. That purpose piece is so key. I always think back to the, um, really great marketing Myopia article from Harvard Business Review. Thousand years ago, it feels like now, but, uh, where it's talking about, uh, you know, people who made buggy whips and if they had continued to say, we make the best darn buggy whips in the world, like, pretty soon, you know, the cars come around and like, too bad for you, nobody wants a buggy whip. I don't need that anymore. But if you realize, you know, we're in the business of making things go of like, helping people get to where they want to get to quickly or whatever, you can pivot when you have that purpose on what people are needing. Um, you know, and right now it happens to be, you know, buggy whips. Right. And I know in the book you mentioned like the horseless carriage as an idea. Right. I love this piece of how metaphor. It ties in as we find the. The context of something in, um, you know, like I said, as you have the adjacent possible. You talk about in the book in this, like, to tie it into like where my brain is to something that's similar to it sort of, uh, if you just say, no, it's an automobile, like a. Oh, I don't know what that even means. I hate that. I don't like it. Right. But if we say, you know, horseless carriage, like, uh, it ties to something, or electronic mail or whatever, something that we're already sort of using, then it helps someone to have that meaning and purpose and make the connection that you need when you are creating that new category.

Speaker D: No, absolutely. Absolutely. Right. Well, this is actually based on, um. There's real academic research that, that shows how this can work. But. Yeah, good day. But, um, uh, the, um. So when we work with a company, one of the things we try to, you know, we're trying to help with is. Is language. Um, because having, you know, having shorthand versions of things and labels and ways for people to refer to things help reinforce not only that category thing, but also then gives an easier way to communicate it once, you know, the kind of that language gets out there. So one piece of that, you know, important part of that language is what do we call this thing, this category? And, um, uh, and one of the most powerful ways to think about it is to, um, take an anchor word of something that we already know what that is, but put a modifier either in front or in back of it that makes it seem like, oh, that's something different. So that's that, but a different version of that. Uh, and so you get a. We all know what a phone is, and you put smart in front of it. Now we've got something, okay, that's intriguing. It's a smartphone. Or way back when, you know, we all knew what an oven did. It cooked food, right? But now you've got this new technology and put microwave in front of it. It's like a microwave oven. Like, okay, I know it's must cook food. Obviously it cooks food differently. Um, and, uh, so we will try to look for that kind of pairing, um, uh, and try to make something like that stick.

Speaker B: Yeah. So. So key for people. And it does make it kind of a nice. As you go through that association process, as you're looking at the categories, right? And understanding the context of the problem you're looking to solve, right? Like, people need this. Like they're trying to achieve what. What don't they have, right? You saying that missing element in the context that they have, say, okay, they like, we're. We're sending mail communication or whatever, but it just takes a really long time to get, you know, things across the country or whatever. In this way, it'd be great if we could send it quicker. We could do that electronically. We've made electronic mail good for us, right? Like you can find those. Uh, and that's exactly how easy it was. And they just did it, right? That's how that category got created. Uh, but when you think about it in that way, it helps in understanding this. Like, who are you talking to? What are they trying to do? How are you helping them solve that problem in a way that they're not able to do right now? What's the benefit to them? And like you said, that helps in the message, of course. And people will then likely find other ways that they might use it that are even, you know, adjacent to your own adjacent possible that you've seen set up here, which is great. And maybe they uncover something you hadn't thought about yet, and that becomes more of what you do. But picking something to help it become more tangible in the brain and get enough people on board to realize there's some momentum behind this thing. It actually needs to be. There is. Is key in those, Those early days and getting those really, um, loyal, those fans that just love what it is that you're doing and are going to follow behind you as you make, um, you know, those continued innovations over time.

Speaker D: And you've given those fans, you've given them a way to talk about it, Right. You've given them languages and phrases and things so that, you know, that it can, like, then propagate, um, you know, throughout the, you know, the population.

Speaker B: Oh, yeah.

Speaker D: I want to bring something else up that, um, you touched on, actually, in one of your questions in the last.

Speaker B: Please. Yeah.

Speaker D: Few minutes here. It's this idea of listening to your customers to go back to like, old apocryphal sayings. Right. I mean, supposedly Henry Ford said, if I listen to my customers, that they would have said they wanted a faster horse.

Speaker B: Right.

Speaker D: Um, your customers know what exists, and they will tell you that, uh, okay, here I, I have this thing that exists. And you know what, here's what's wrong with it, or here, here's how it could be better, or I want a couple of other knobs on this thing or something like that. Right? That's what they're going to tell you. Your customers are not going to imagine something entirely new. Now, you have, you have to know your customers really well. You have to know enough about them to have that context, conversation. Right. Understand what their problems are, what they're going through and all that kind of stuff. But the companies that are going to create a new category have to have that mindset of. But we're going to imagine something that nobody else has yet.

Speaker B: Yes.

Speaker D: Um, and that is the hard part. Um, but it is, uh, it is letting go of that. I'm going to listen to my customers and put what they want to. Like, I'm going to listen to my customers and understand them and then build them something they don't yet know they want.

Speaker B: Yes. Yeah, I, uh, don't. I think it potentially is, like, flipped around and you potentially can't even read the title of my first book is what your Customer Wants and Can't Tell youl. Uh, and so even the language of what you're using there is, uh, like music to my ears. We're speaking the same uh, language on this. See, I knew we were kindred Spirits from me having read your book. So definitely, uh, uh, a lot of the same wavelength. And I'm all about storytelling and word choice. And like I said, I love metaphor and cognitive semiotics and understanding the people we're talking to, uh, in a way that we can communicate, that's going to make them excited and help them to buy in. Uh, because it's not about what you care about or like or even want or would need. Typically, uh, your customer's not you, and they want to need something different. Like maybe if you're creating something like, you know, going from the buggies to automobiles, like, you probably want that thing too. But a lot of the time, you know, the thing you can see, they don't see yet. And so think, understanding and really empathizing with people in a way that they can't yet articulate. I always like to look to, um, you know, there's the example, and I think it was from Tide, but where it's like with the laundry detergent and people are pouring. It's making such a mess, uh, all the time. And they're trying to. And they came up with all these weird, um, you know, they've like, MacGyvered with duct tape or maybe something, but they just have a mess and they don't really think about it. And people are like, why have you never brought this up when they were doing, you know, like, ethnographic research?

Speaker A: So I don't know.

Speaker B: That's just like, that's how it is. Right. And they've been doing focus groups and things for years, and nobody's ever talked about what a nightmare mess it is to pour this stuff. So they create the pourable spout, and it, like, changes the whole game. Right. But, like, nobody even thought about how inconvenient and terrible it is. It's just an accepted norm of the world around you. And we do that about so much stuff all the time. And so if you can, like, step back enough to observe what people are, like, dealing with and doing and ask some thoughtful questions and get interested and be curious, like, just unlock so much, um, I think in life and business.

Speaker D: Yeah. I mean, if you got several minute, I can tell you there's a good example right out of one of the great, you know, category creating companies of all time. Right. Apple. Um, of why the story matters so much.

Speaker B: M. Yes.

Speaker D: Um, so let's do a comparison here. Um, so, you know, this whole thing, context, missing, innovation. And again, I was thinking we looked at patterns not only of companies we worked with, but of how People we admired thought about these things, realize that every time Steve Jobs introduced an important new product, that's exactly how he introduced it. And so I go back to the 2011 introduction of the iPad. And so Steve Jobs gets up on stage, and first, um, thing he does is describes this change in context that we're probably not quite aware of yet, which he starts talking about. You know, we're starting to consume every kind of media on digital devices. And that means not just, you know, you're already listening to music and you're, you know, reading stuff online or whatever, but it also means we're going to be watching movies and sports events and, um, reading books and all this stuff. Everything is going to be. So it kind of sets the tone of, like, there's a changing context. And we kind of go, oh, yeah, that sounds. That sounds right. Right. Um, and. And then he says, it basically sets up a problem that we didn't yet know we had, which was he puts up on the screen, he says, okay, so this is happening. Um, right now you have this iPhone. Great product, right? Wonderful product. But you know what? The screen is really small, and it's going to drive you crazy trying to watch a movie on that, you know, on that screen. And this other product, you have this great MacBook. Like, I'm sure you really love your MacBook. But you know what? Taking that. Yeah, exactly. But you know what? Taking that to the beach to read a novel is really not very practical. Uh, or, you know, or play, you know, playing music while you're on the run. And, um, uh, so he sets up this idea that there's a. There's a missing. There's a problem. We don't. Didn't even recognize that. We had that. He basically gets up there and says, you don't. So you don't have the right kind of device for this new media landscape. That's why we're introducing this new category of products, and ours is called the iPad. And he puts up on the board in the middle between these two things, the iPad, and then goes on to describe why it's the perfect device for all of these digital media. And by the end of that thing, you're going, okay, I get it. I never thought of that before, but

Speaker B: now I can't unsee it. I can't unsee it.

Speaker D: I can't see it as a good phrase. I, uh, can't unsee it. And maybe I should get one of those. Right?

Speaker B: Yes. Yeah.

Speaker D: So compare that all these years later to Tim Cook, who does not operate that way, um, going on stage to introduce the Vision Pro Goggles. So he goes up on stage, um, and the first thing he does is puts up a slide of the Vision Pro Goggles and says we've got this cool new product and here's all the things it does, here's all the features. Um, and so there's no definition of what it's good for, why we need this or any of that. Right. Left up to us to figure that out, which we've never figured out, which is why the Vision Pro Goggles don't exist anymore. Um, and uh, so not being able to. Well, first of all, if you go back, obviously Apple didn't see a product that actually needed to exist in the first place. They thought it was a cool product to make and then they made it. They didn't tell us why we needed it. Um, uh, and uh, and so it never, you know, other, other than, you know, with the small groups of, you know, gamers or whatever or early adopters, it never really caught on. So it does really matter how you know, how you bring something to market and how you embed it in people's brains.

Speaker B: And just the unveiling of that experience and thinking about the dopamine you get from anticipation and the um, just like where we're building this trust and we're excited about the thing that's going to be coming up and you're having these revelations where you're part of the unveiling. Like Steve Jobs does it in a way that yeah is then by the time the thing gets announced you're like, yes, right. And that's where being able to announce that like something is coming, get excited about it. Right. I actually have a whole episode about Apple Card in kind of this. I ah, used to work in financial institutions space and it's like we knew this was coming forever and like nobody actually did anything. And the stuff of the features of Apple Card were things that any financial institution could do, but they just didn't, they didn't talk about it in the right way. And so it's like a cool um, just so much of how you talk about it matters more than whatever it is you're talking about. So yeah, love it, love it, love it. Well, for everyone who is now so excited to follow you of course to get their own copy of the category creation formula and to learn more and maybe if their business is looking to, you know, create a category, they want to hire y' all, like what's the, their best path to do these things.

Speaker D: Thanks well, we have a firm. Firm's called Category Design Advisors, and the website is simply category designadvisors.com you find, if you could find, uh, our work there. Um, I have my own personal site, KevinManey.com. if you're interested in past books I've done or anything else I've worked on, you can find it there. So those are the two main places.

Speaker B: Awesome. Well, we'll put links in the show notes to make it easy, but always great to hear it directly from you. So thank you again so much for coming on the show and chatting with me today. It was really delightful to learn from you and share these ideas.

Speaker D: That was a total pleasure, Melina, thanks.

Speaker A: Thank you again to Kevin Maney for joining me on the show today. What got your brain buzzing in today's conversation? For me, there were so many great insights from the book and our conversation. But one of my favorite new terms I picked up from the book is something called the adjacent possible. There's actually a whole chapter on it. And the basic idea is there's a narrow sweet spot between an idea that's

Speaker B: already fully built out, where you're really fighting over scraps of a crowded category,

Speaker A: and an idea that's so far ahead of its time that the market and the technology just aren't ready yet. The companies that really win are the ones that land right in that space between the two. The Tesla example that Kevin shared in our conversation illustrates this well.

Speaker B: Electric cars existed before Tesla, but they

Speaker A: were clunky and people didn't really want them. The world wasn't ready. Tesla didn't have to invent the electric car, but they found the moment when the technology and the public's appetite finally lined up to really create the category in a very different way. And this connects back to one of my favorite ideas from our conversation. A category is really just a space in people's minds. That means you have this opportunity to create something that doesn't fully exist yet, just by understanding how your product or service serves people, what they actually value, and how to message that in a way that helps them see it. That's a different skill than building a good product. It's understanding the story your category and company need to tell. And now that you've had a chance to reflect, where do you think your category sits in people's minds right now? And is there a space nearby that hasn't been claimed yet?

Speaker B: Whether you're ready to share that category

Speaker A: yet or you just want to share one of your top insights from the episode while you're ruminating on that. Whatever it is, come share it with me on social media. You're going to find me as the Brainy Biz pretty much everywhere and as Melina Palmer on LinkedIn. There are links in the show notes to make it easy, as well as links for my top related past episodes and books, including the category creation formula, ways to get in touch, and more. It's all waiting for you in the app you're listening to and at, uh, the brainy business.com584 and thank you again to Kevin Maney for joining me on the show today. It was a delight to chat with and learn from you. Join me next time for another brainy episode of the Brainy Business Podcast. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me and remember to be thoughtful.

Speaker C: Thank you for listening to the Brainy Business Podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness. Com.