Should You Create a Category or Enter One?

Should you create a category or enter one?

Enter one, unless you can afford to spend years teaching a market that does not yet know it has a problem. Category creation is genuinely powerful and it is also the most expensive marketing decision available to a small company, and most founders who think they are doing it are simply being hard to understand.

This comes up constantly in positioning conversations. Someone has built a good product, the obvious category does not quite fit, and the instinct is to name something new rather than accept an imperfect label.

Here is what the people who have actually done it say about the cost, and how I would make the decision for a business that has to pay its own bills.

What does creating a category actually mean?

It means changing what buyers believe the shape of the problem is, and then owning the name they use for it. Andreessen Horowitz's conversation on the topic frames the purpose bluntly. Category creation is not just about making a dent in the way companies work, it is about setting the price.

That is the real prize and it is worth stating plainly, because it is more honest than the usual language about vision and narrative. If you define the category, you define what a reasonable price for it looks like, and nobody can reduce you to a line item on a comparison chart.

The same conversation is equally direct about the timescale, calling it a long game. That phrase is doing a lot of work. A long game is not a launch, it is a multi year budget line that has to survive several planning cycles.

What does it cost you?

Clarity, first. The a16z discussion describes the particular difficulty that startups need to do everything in two phases, for the now and for the later, and toward two constituencies, both direct lines of business and IT. Doing all of that at once produces exactly what you would expect.

The consequence they name is the one that should worry you most. All of these things can give entrepreneurs very confusing, mixed signals about whether or not they have product market fit yet. You lose your ability to read your own evidence.

That is the hidden cost nobody budgets for. In an existing category, a slow quarter means your product or your marketing is not good enough. In a category you are creating, a slow quarter might mean the same thing, or it might mean the market has not arrived yet, and you genuinely cannot tell which.

What do you get by entering an existing category instead?

A buyer who already has budget, a search query that already has volume, and a comparison you can win on merit. Those three things compound from day one, and none of them require anybody to change their mind about how the world works.

The trade is that you accept being measured against incumbents on their terms. That feels like a disadvantage and often is not, because a buyer comparing you to a known alternative has already decided the problem is worth solving, which is the expensive half of the sale.

It also makes your content strategy obvious rather than speculative. People are already searching for the category name, the alternatives, and the comparisons, which is why those pages tend to earn their place. I made that case in whether alternative pages are worth building.

What must you be able to explain either way?

Two things, and First Round Review puts it as clearly as I have seen. Arielle Jackson writes that you need a simple explanation for why you win versus the old way of doing things, and why you win when the choice is between you and another startup in your space.

Notice that both halves are required regardless of which path you pick. Category creators often answer only the first, assuming the second will not arise, and then a competitor appears with a similar pitch and they have no answer ready. Category entrants often answer only the second and forget that plenty of buyers are still doing nothing at all.

If you cannot write both explanations in one sentence each, the category question is premature. That is a positioning problem, and renaming the market will not solve it.

How do you tell which situation you are actually in?

Listen to how buyers describe you to each other. If they reach for an existing label when they explain your product to a colleague, you are in that category whether you like the label or not. The market has already decided and you are arguing with it.

The test I use is simple and slightly uncomfortable. Explain the product to someone outside the industry, wait a day, and ask them to explain it back. Whatever words they use are your category, and I wrote up that exercise in the message test where a stranger repeats what your product does.

The genuine category creation cases are rarer than the conversation suggests. You are usually creating a category when buyers have the problem, are solving it badly with a mix of tools and spreadsheets, and have no word for what they are doing. That is a specific and recognisable situation, not a general feeling that your product is special.

What does this change about your website?

Almost everything above the fold. If you are entering a category, your homepage should use the category name in the first sentence, because your visitor arrived with it in their head and you are confirming they are in the right place.

If you are creating one, the homepage has a harder job: describe the problem in the buyer's own words before you name anything. The naming comes last, after the reader has agreed the problem exists, and a new name introduced before that point reads as jargon.

The comparison pages differ too. In an existing category you are competing on attributes buyers already weigh. In a new one you are mostly competing against doing nothing, and the page has to argue that the status quo is a choice rather than a default. I went into the mechanics in comparison pages that win B2B buyers.

Can you change your mind later?

Yes, and doing so is more common than the public narrative admits. Moving from a category you invented into one buyers already recognise is usually a growth decision rather than a retreat, because it swaps expensive education spend for demand that already exists.

Moving the other way, from an established category into a new one, is harder and usually requires a product change rather than a messaging change. If you are still selling the same thing, buyers will keep filing you where they filed you before.

The First Round piece points at Rita McGrath's transient advantage framework, and the implication is worth taking seriously. Positions are temporary, so treating your category choice as permanent is its own mistake regardless of which one you picked.

What would I do with a small budget?

Enter the category, win on a sharp wedge, and earn the right to rename things later. A small company competing in a named market can be found, compared, and bought this quarter, and that cashflow is what funds any longer story you want to tell.

I run a small practice, mostly fixed fee projects for founders and marketing teams, and I position inside terms people already search for rather than inventing my own. It is less romantic and it means the enquiries that arrive already understand roughly what they are asking for.

The exception is genuine and worth naming. If you have real funding, a long runway, and evidence that buyers are already improvising a solution with no name for it, category creation can be the highest return decision you will make. Just make it deliberately, with a budget attached, rather than by accident because no existing label felt flattering enough.

What should you do next?

Write both explanations this week. Why you beat the old way of doing things, and why you beat the closest startup alternative. One sentence each, no adjectives, and show them to somebody who does not work with you and never has.

Then look at how your last ten inbound enquiries described what they wanted. If they used a category name, use it. If they described a situation with no name, you may have something rarer, and it is worth planning for properly.

Across more than seventy projects, the businesses that struggled most with marketing were almost never in the wrong category. They were in a category they refused to name. If you are working through that decision, reach out and let's chat about what your buyers are already calling you.