Successful startups go through two stages: before product-market fit and after. Getting to product-market fit as a business is critical to the long-term growth potential of that business. Without reaching this milestone, a company has no chance of any long-term success. But what comes before this? As Marc Andreessen, the founder of Andreessen Horowitz notably stated, the first stage of the startup process is getting to a problem/solution fit.
The way you position your product in the market greatly influences your growth opportunity. For the most ambitious dreamers amongst us, one way to set yourself apart from the competition when finding that problem/solution fit is to “Create a New Market Category.” Especially, if your product attempts to create a new set of behaviors in your users, then you might have the opportunity to carve out a brand new category in the market.
“Forget the brand. Think categories. Prospects are on the defensive when it comes to categories. Everyone is interested in what’s new. Few people are interested in what’s better." — The 22 Immutable Laws of Marketing.
But creating a Category is easier said than done. Thankfully, we had the opportunity to sit down with Brian Balfour, Founder & CEO of Reforge and former VP of Growth at HubSpot. During his tenure at HubSpot, Brian had the chance to work with the team that created 'Inbound Marketing' and learn what it takes to establish a new category in the market.
Inspired by the conversation with Brian, we have outlined a framework for category building in this article. Buckle up, you may have just found one of the most interesting reads of the week!
Before diving in, it is important to understand that Category creation is extremely difficult and not for everyone. Here is a quick look into the caveats.
1. Long-term Investment:
For real, it’s a long-term investment.
You must have a clear vision of the future and what your future customers will need. Your brand will only get as big as your Category, so it is essential to build momentum that is bigger than you and your company and start beating that drum consistently for as long as you can. This is a marathon.
No matter how large your launch event is, it’s just not enough. You need to think long-term and build a team that pushes the Category into the minds of your users — one beat at a time. To put this into perspective, HubSpot spent more than a decade to make the category of ‘Inbound Marketing’ a household name and part of every brand’s marketing strategy.
“In our early years, we did create the “inbound marketing” category -- and though that helped us with growth in the early years, it was hard, expensive, and risky. I don’t know that I’d recommend it for everyone.” - Dharmesh Shah, HubSpot.
2. Beating the Drum:
You have to beat the drum — for years to successfully create and own the Category. The moment you decided to carve out a new Category in the existing market, you’ve also made your decision to make a consistent and significant investment.
Once you start, you’ll soon see yourself in a catch-22 situation. You want to establish a new Category that connects your product to a greater vision and more importantly, want your users to see it; experience it. At the same time, you’ll come across “low-hanging fruits” that fit the use cases you are solving.
When HubSpot created “inbound marketing”, it wasn’t a known term or Category yet, so search volume was quite low. At the time, there were other categories and terms like ‘content marketing’ that had more volume and awareness.
When your category is new, by nature it will not have much awareness or inherent demand. Whenever a brand successfully creates a category, it will look apparent in hindsight, but not so obvious when they start from nothing. In some ways, you need to have blind faith in the value of what you are building. HubSpot identified a pain point, designed a category to solve for this pain point that was bigger than just them, and stuck with it through thick and thin. They kept beating the drum and never gave up.
If you decide to head into the jungle with your machete and shape a new category, it always helps to have a map. Here is a step-by-step process, mapping out the strategies and tactics that give you a much better chance at success.
The reason why ‘Inbound Marketing’ worked so well for Hubspot is it represented a methodology. It’s not just a term created for the sake of it. It’s an idea wrapped around a bunch of easy-to-understand behaviors that help marketers adopt a new set of strategies. Not only can they rely on inbound marketing to do their jobs better, but they could also identify with it.
“Both the hardest and most impactful part is naming and framing”
Because it was easy to identify with, being an “inbound marketer” became a new thing and something to put on your resume. This made it sticky.
Your first step is to get the naming and framing right.
When you come up with a Category, you aren’t just coining a term. You are creating a story and of course, your users are the ‘heros’. But, for a winning story, you need a strong enemy.
For HubSpot, it’s ‘Outbound Marketing’, which of course is the opposite of ‘Inbound Marketing.’. A little-known secret is that HubSpot also came up with the term ‘outbound marketing’.
Yes, they not only coined ‘inbound marketing’ but also created a strong enemy — ‘outbound marketing’, to make it easy for marketers to see how HubSpot’s inbound methodology is better for them and their customers.
Why focus on the enemy? When you’re trying to get people to adopt a new set of behaviors and advocate for it — you need to first help them understand the problem with their existing behaviors.
You’re not saying people were always wrong to play the old game. They’re only wrong now because something in the world has changed — there’s new knowledge, new technology, or new things buyers want. — Andy Raskin.
Imagine if HubSpot said, here’s how marketers should do marketing and we’re calling it ‘Inbound Marketing’. It wouldn’t have gotten far. You need strong anchoring and to help your users understand that their existing way of doing things isn’t efficient in today’s world. This is something many overlook. Don’t just say — “hey, what you’re doing is wrong. Instead, help them see why what they are doing is wrong so that they can then come to a new conclusion on their own.
Defining and starting with an enemy that people understand, makes it feel real and urgent.
For HubSpot, the enemy was the B2B marketer’s existing way of acquiring customers — cold calls, email spams, paid ads, and media buys. Put it another way, it was always the company that tried to begin the conversation with potential customers. HubSpot called it ‘outbound marketing’ and completely flipped the script. What if marketers figured out ways to attract the right customers to the company? And that simple but complex question is how ‘Inbound Marketing’ was born.
A quick checklist to help pick the right enemy:
HubSpot created a manifesto page and a dedicated story page to define the ‘why’ behind inbound marketing and introduced itself as a tool made for ‘inbound marketers’. It served as a go-to place for anyone who wanted to take part in the movement.
They know their hero (marketers), the enemy (outbound marketing), and put together a captivating story of how marketers can leverage inbound marketing to win the enemy!
When it comes to a story, strong visuals play an important role. It helps you spread the message across the audience faster. So, you need to have a strong visual for both hero and enemy. It was a huge part of HubSpot’s success. Their visual storytelling was as good, if not better than the ‘why’ behind HubSpot. They had a dichotomy that’s hard to replicate.
“Many have tried but no one came close to what HubSpot did with Inbound Vs. Outbound.” — Brian Balfour.
Figuring out ways to consistently get your market to adapt to the new set of behaviors and subscribe to your Category (and obviously, your product). This consistent “beating of the drum” is where most companies fail.
There’s no time to wait. The company that develops the greatest of customer relationships in the first few years is often the winner. — Tomasz Tunguz.
But this is where you need tactical suggestions that could help you take the first steps. While strategies ultimately depend on your market, product, and more importantly, the story you are trying to establish, it’s helpful to learn and get inspired from others.
So, let’s see how HubSpot “beat the drum” with their category creation.
HubSpot’s blog is one of the most popular websites in all of marketing and every one of us probably read some of their content. Content helped them to establish the Category and continually get more marketers exposed to the idea of inbound marketing.
The content team at HubSpot published blog posts — almost daily — about different facets of inbound marketing. Every one of their blog posts either directly or indirectly tied the readers back to ‘Inbound Marketing’.
Fun fact: HubSpot co-founders Brian Halligan and Dharmesh Shah even published books on ‘Inbound Marketing’.
Living it yourself:
You’ve probably heard that you need to be the first user of your product. It applies here as well. You can’t expect others to buy in and change their existing behavior and become advocates of your Category (and product) if you aren’t doing it yourself.
In HubSpot’s case, the company renamed all its designations to reflect the story and the fact that they believe in it. All ‘marketers’ became ‘Inbound Marketers’ at HubSpot. It didn’t just stop at renaming, they went on to set marketing mandates and ensure their marketing reflects inbound methodology.
Marketers trust expert’s advice and when they hear experts believing in the same story and Category that you’re trying to establish — then it adds up in your favor.
HubSpot brought on great marketing influencers like Seth Godin to accelerate the growth of Inbound methodology. Simply put, they borrowed other successful people’s social credit who aligned with their philosophy to reach their goal faster. The key to their success is that they identified a real problem and then partnered with thought leaders who also believed in solving that problem. This kept it authentic and honest, so people wanted to support the new category.
Leveraging Early Adopters:
HubSpot identified and converted early adopters into advocates. Creating a Category depends more on what your target audience says to each other than what you have to say. HubSpot enabled their successful customers to write blog posts on their websites or Medium about how Inbound changed the game for them and it simply amplified the stories.
From Inbound Marketing conferences to communities, HubSpot created a place for Inbound marketers to get together, share insights, and grow faster. They enabled everyone to win — which in turn propelled Inbound Marketing to new heights that were way bigger than just HubSpot as a company. Instead of HubSpot owning the term “Inbound Marketing” it became a movement that anyone could stand behind and feel connected to.
HubSpot didn’t do it in a month or even a year.
Creating a Category and making it as big as your vision, is a long process as we have outlined in this article. It isn’t the same as a product launch where you spend weeks and then it’s all over.
HubSpot evolved a lot and it continues to do so, proving that it is important to always be evolving and growing. It started with marketing (Inbound Marketing) and since then has covered sales (Inbound Sales) and now it is truly seeing the effects of “The Flywheel”.
If you are building a product that changes the way people think, live, and work then creating a new category might be worth pursuing. We would love to hear from you on what you think about category creation, and what might be missing from this article.
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