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Market Categories Are B.S.


We can’t see the world as static. Conceptual boxes can be helpful as long as we realize we have invented them ourselves to help us understand things. The moment we forget that we can uninvent them, we’re stuck.

There is a tendency to view market categories as a given. We think we’re in the “server hardware” category. Or the fitness club category. Or the E-commerce category. Like Blackberry (Research In Motion) was in the smartphone category and Apple was in the personal computer category. Oops.

Or Starbucks was in the coffee shop category and McDonald’s was in the Fast Food category. If categories tell us which competitors to ignore and which competitors to track, than category thinking is dangerous. You won’t see them coming!

If category thinking limits your imagination about how to expand and grow your brand and business, then category thinking can be deadly

David Gardner of the The Motley Fool talks about “top dogs” and “first movers.” A first mover is a company with a new technology or system that completely changes an industry, disrupts the existing categories and creates a new one. Ebay in digital auctions. Amazon in online retailing. NetFlix in digital streaming of movies and TV shows. Better to be one of these, or follow one of these, then be the disturbee. For more inspiration, read about an industry that ruled the world:

When I was growing up, my Dad was an electrical engineer, working on his PhD and developing silicon chip technology. I fondly remember his slide rules and his easy comfort with calculating based on these pre-digital computers. The slide rule category was once a thriving global category and the 1960’s represented this two hundred year old industry’s peek. Curiously, even as digital computing was coming up, slide rule makers were enjoying a robust market. But all of that ended abruptly in 1974 when HP introduced the first inexpensive scientific calculator. Today only one Japanese company continues to manufacture slide rules.