Category Creation | Marcus Carey (Founder and CEO of Threatcare)

by Vedant Nair

This week, we had the opportunity to chat with Marcus Carey, the Founder and CEO of Threatcare. Threatcare has since been acquired by ReliaQuest, where Marcus serves as an Enterprise Architect. Marcus is a thought leader in cybersecurity, a mentor for aspiring founders, and a technologist at heart.

In the episode, Marcus shares lessons from creating his own category to getting acquired. He discusses trends in cyber security, category creation, and his playbook for hiring.

Listen now on Apple, Spotify, and YouTube.

In today’s blog, we’ll discuss the key considerations for category creation. For any entrepreneur, it's a difficult road that has the potential to create great upside.

Category Creation

As a founder, you're constantly looking for ways to stand out in a crowded market and gain a competitive advantage. One strategy that has proven successful for many startups is category creation – the process of introducing a new product or service category that doesn't currently exist. By creating a new category, you can differentiate yourself from competitors, tap into new markets and customer segments, and establish yourself as a thought leader in your industry. But category creation isn't easy – it requires extensive market research, a clear value proposition, and a messaging framework that effectively communicates your unique offering. In this blog, we'll explore the ins and outs of category creation for startups, and provide you with practical tips and examples to help you succeed.

Evaluating the Market

When it comes to evaluating the market for category creation, there are a few key considerations to keep in mind. The first is to determine whether there is a significant enough market demand for a new product or service. This requires thorough market research and analysis to understand the needs and pain points of potential customers, as well as any existing solutions in the market. Additionally, it's important to consider how your solution creates unique value previously unmet by the rest of the market. This requires a clear understanding of your target audience and how to effectively communicate your value proposition to them. Finally, it's essential that the market you’re creating is large enough and growing quickly. This part takes some guesswork but is extremely important to potential investors. 

Let's take the example of Zoom, a video conferencing platform that has disrupted the market in recent years. When they first launched, the market for video conferencing was already established, with players like Cisco and Skype dominating the space. However, Zoom recognized a gap in the market in terms of usability and user experience. They identified that existing solutions were clunky, difficult to use, and often required IT support to set up. For enterprises and organizations, these solutions were hard to integrate and made them inaccessible to the average user. In response, Zoom focused on creating a product that was user-friendly, intuitive, and required minimal technical expertise. This allowed anybody in a team to download Zoom, invite their friends, and starting collaborating immediately. And fortunately for Zoom, the market was kind to them. Because of the pandemic, their market size grew rapidly, and their focus on product accessibility led to high rates of user adoption. 

Educating Potential Customers

When it comes to educating customers about a new category, there are several important considerations to keep in mind. First and foremost, it's important to clearly articulate the problem your solution is solving and why it's necessary. This requires a deep understanding of your target audience and their pain points, as well as a clear and concise messaging strategy. Additionally, it's important to provide educational resources that help potential customers understand the value and benefits of your solution. This can take the form of blog posts, webinars, demos, or even social media content depending on the messaging needed to get the point across.

Another key aspect of customer education is building a community around your product or service. This involves engaging with potential customers through various channels, including social media, forums, and events, and fostering a sense of belonging and shared purpose. By building a community of passionate advocates, you can create a network effect that drives adoption and growth. Finally, it's important to track and analyze customer feedback and behavior to continuously improve your messaging and educational resources, as well as your product or service itself.

Let's take the example of Slack, a messaging platform that has created a new category of workplace communication and collaboration. When Slack first launched, they recognized the need to educate potential customers about the benefits of their platform, particularly in comparison to existing solutions like email. To do this, they created a series of blog posts, webinars, and other educational resources that explained the problems with email and the benefits of a more streamlined, real-time messaging system. They also built a community around the platform by engaging with potential customers on social media and hosting events like Slack meetups. By continuously refining their messaging and educational resources, Slack was able to build a dedicated user base and eventually become a household name in workplace communication.

Finding Ecosystem Partners

Finding the right ecosystem partners can be a game-changer for businesses looking to build a new category or expand their reach. Ecosystem partners can help drive adoption and growth by integrating with your product or service, providing complementary offerings, or sharing similar target audiences. To find the right partners, businesses should first identify their target audience and pain points as well as potential partners who are already serving those customers. Networking events, industry conferences, and online forums can be great places to meet potential partners and explore collaboration opportunities. Once you've identified potential partners, it's important to understand their business model, target audience, and brand values to ensure a strong fit. Working together with ecosystem partners can involve a range of activities, from co-marketing and co-selling to integration and joint product development.

Here's an example of a company that has successfully leveraged ecosystem partnerships:

Stripe, the online payment processing company, has created a new category of online payments and e-commerce by partnering with other technology companies. Stripe has integrated with a range of popular platforms, from e-commerce giants like Shopify and WooCommerce to accounting software like Xero and QuickBooks. By partnering with these platforms, Stripe has been able to provide a seamless payment experience for customers using those services, while also increasing its own visibility and adoption. Additionally, Stripe has formed partnerships with other payment processors and financial institutions, allowing it to expand into new markets and offer additional value to its customers.