So You Want to Create a Category?
Category creation is the ultimate form of B2B brand differentiation. Think Salesforce and CRM, HubSpot and inbound marketing—these top-tier brands are the leaders in their category because they were the champions of it from the very beginning. It takes a lot of work to get there, however, and not all brands are made for category creation.
This episode features three expert marketing execs who also happen to be veteran category creators—Chip Rodgers of WorkSpan, Gabi Zijderveld of Affectiva, and Bernd Leger (now at Mimecast). Tune in to learn the ins and outs of category creation, like how to engage with analysts to build credibility, how you know you’re on the right track, and how to manage competitors as a category leader.
What You’ll Learn in This Episode
- The stories behind multiple B2B category creation initiatives
- Why analyst relations are critical for creating a category
- How marketers can successfully bring a new category to life
Renegade Thinkers Unite, Episode 242 on YouTube
- RTU Episode 177: A CMO’s Guide to Cultivating Customer Champions
- RTU Episode 106: Creating the Category—Affectiva and Emotional AI
- Gartner’s 2020 Competitive Landscape: Emotion AI Technologies, Worldwide
- Girl Decoded by Affectiva CEO Rana El Kaliouby
- RTU Episode: The Big Pivot for 2021? Category Creation!
- WorkSpan’s Ecosystem Aces podcast
- [0:00] Cold Open: This is Renegade Thinkers Live
- [1:38] Category Creation at WorkSpan: Ecosystem Business Management
- [9:44] Category Creation at Affectiva: Emotion AI
- [15:23] Bernd Leger, Three Time Category Creation Veteran
- [20:23] The Relationship Between Category Creation and Company Culture
- [26:06] On CMO Huddles
- [28:26] Tips for Building and Maintaining a Relationship with Analysts
- [32:55] Why Category Creation Requires Patience
- [36:18] How to Manage Competition During Category Creation
- [42:52] Prerequisites for Category Creation
- [48:11] How Content Can Support Category Creation
Transcript Highlights: Drew Neisser in conversation with Chip Rodgers, Gabi Zijderveld, and Bernd Leger
[0:00] Cold Open: This is Renegade Thinkers Live
Drew Neisser: Hello Renegade Thinkers, Drew here! If this is your first time listening to the podcast, welcome—where the heck you been!? And if you’ve been here before, welcome back! This episode is a little bit different from our usual one-on-one interviews with just one CMO like it sounds. We actually are talking to three B2B CMOs about a hot topic and we do that Live. That live show is then turned into a podcast, like this one today.
This episode is all about category creation. How do you make one? How do you know when you have a category created? What are some of the signs that you’re on the right track? It’s not an easy thing to build a category. It’s ambitious.
We have three CMOs who have actually done that before, they are veterans, including Chip Rodgers of WorkSpan, Gabi Zijderveld of Affectiva, and Bernd Leger, who just recently joined Mimecast as CMO. They’ll discuss how they did it, how they brought categories to life, and share a wealth of tips for CMOs looking to differentiate their brands in a big way. Now, let’s get to the show.
[1:38] Category Creation at WorkSpan: Ecosystem Business Management“One of the things that is critically important is it really needs to be something different.” —@chiprodgers @WorkSpan Click To Tweet
Drew Neisser: I’m your host Drew Neisser, live from my home studio here in New York City. Lest you had any doubt, mission number one for you the marketer is to differentiate your brand from your competitors. Without differentiation, your brand is not a brand, it’s a commodity, and you’ll find yourself in a race to the bottom in terms of pricing.
With differentiation, you have pricing power. With differentiation, you have shorter sales cycles and less churn. With differentiation, you have an easier time recruiting and retaining employees. That in turn becomes a virtuous circle because these employees help you sustain your competitive advantage.
Now, differentiation comes in many shapes and colors, some of which are emotional perceptions built over time. You know, the old, “I just like them better, I trust them more.” And others are more tangible in terms of product performance like faster or more agile. Or service performance—more reliable, more responsive).
The ultimate form of differentiation for B2B brands is category creation—when you set about to be in a class by yourself. If you’re “phewing” right now you’re going, “Finally, he’s getting to the point.” Yes, the point of this show is we’re going to be talking about category creation.
Think Salesforce and CRM. HubSpot and inbound marketing. Creating your own category is also fraught with challenges and ironies. The challenge is that you have to do a lot of educational work. You have to commit to selling the category versus selling your brand. And the irony is, it’s not really a category until you have competitors and someone with authority—usually analysts—says it is a category, which brings us to today’s show in which we will dive into the nitty-gritty challenges of category creation with three awesome guests.
Got through that and I’m ahead of schedule. First up is Chip Rodgers, the CMO of Workspan, star of Renegade Thinkers Unite Episode 177. Chip, thank you for being here. How are you?
Chip Rodgers: Hey, Drew, I’m great. I’m great. Thank you for having me on. This is going to be a terrific session. I’m really excited.
Drew Neisser: Well, excited to have you here as well. Let’s start with the category that you’re creating at WorkSpan. Can you describe it in a few words?
Chip Rodgers: Sure. We’re in the B2B space and really, with technology companies, one of the challenges that people have had is that the world is really changing. It used to be that if you were a software company or a hardware company, you would sell everything through resellers, direct to a channel. That’s been the model for 20 or 30 years.
With the cloud, everything completely has changed. You’re no longer selling—well, you can be doing reselling, but there’s a lot more what’s called, “co-selling,” and it’s around an ecosystems model. Having different kinds of partners working together to build a solution, bring it to market, and then co-sell with your partners—that’s a completely different way of working with partners. What’s been happening since then is everybody is doing everything on spreadsheets, literally.
It’s a really different approach to partnering. People have been muddling along and WorksSpan has built a solution to optimize that, to automate it, to build it all in a cloud, and build it in a network so that all partners can work with each other.
Drew Neisser: It’s so interesting because there are so many products or services that the competition is a spreadsheet. It’s hilarious, which is the way they’ve been doing business. You’re presenting a different way of doing business, which involves changing behavior, though that’s hard. I’m wondering how long—first of all, do you have a name for your category?
Chip Rodgers: Yes, it’s called Ecosystem Business Management.
Drew Neisser: EBM, because it has to have initials.
Chip Rodgers: It’s got to have initials. And only three!
Drew Neisser: All right, so you’ve established the category. Would you say that the category is established?
Chip Rodgers: It is. All the analysts have been calling it. We’ve been working with analysts for a long time. Companies are seeing it. We’re seeing huge thought leaders like Accenture and Accenture Research talking about how ecosystems are the new wave. We’re seeing a lot of momentum and we’re seeing competitors coming in as well, which I know we’re going to talk about as well.
Drew Neisser: It’s interesting. As much as you want it to be, it isn’t a category until the analysts say it’s a category, which is hilarious. And then it isn’t a category until you’ve got competition, which is annoying. Somehow you have to embrace the idea if you’re the first one in there that you’re going to get the largest share. How long did it take you—you said a long time. How long did it take you from deciding you were in fact a new category to getting an analyst to agree?
Chip Rodgers: We started this journey back in May of 2018. In fact, in preparation for this conversation, I brought up our original category creation plan. Our two co-founders, actually three co-founders, sat down and said, “Look, what we’re doing is something that’s very different, and let’s figure out how we get the word out and bend everybody’s mind to this new way of thinking about things.”
Drew Neisser: Interesting. While one might argue that under two years is not a long time, except for if you’re in Silicon Valley, which I know you are, that’s like—you could have sold a company four times in the period of two years. You’re not quite a lightspeed billionaire yet.
I love the fact that there’s a plan there, and I think we’ll end up circling back to some of those elements. Clearly, you had a thought that there’s a playbook here for developing a plan. Maybe you could give one insight before we bring on the next guest. What were the preliminary steps that you needed to take to get this category off the ground?
Chip Rodgers: I think one of the things that is critically important is it really needs to be something different. It needs to be different. But no, I think putting the plan together, and I credit our co-founders for thinking through the process. My boss, Amit Sinha, had been with SAP for many years and had created a category with SAP with HANA. We used a lot of those learnings in the process to really put the plan together. Then it was executing, so working with analysts and bringing people around to this new way of thinking.
[9:44] Category Creation at Affectiva: Emotion AI“The benefit is really that it creates a lot of inbound demand and credibility with clients.” —@gabizij @Affectiva Click To Tweet
Drew Neisser: We’re going to bring Gabi in now. Gabi Zijderveld, CMO at Affectiva and also Renegade Thinkers Unite star, Episode 106. Hello, Gabi.
Gabi Zijderveld: Hey, Drew. How are you?
Drew Neisser: I’m great, thank you. I’m particularly excited to have you not only because you’re a category creator, but you’re also a big gin fan, which we’ll get to in a few minutes. When you and I talked about category creation back in the fall of 2018 when we did our podcast together, you talked about having created the emotion AI category. Was there a moment where you realized that you had done that?
Gabi Zijderveld: Yeah, I think the moment actually was when Gartner came out with a report that I think the exact title was “Emotion AI: The Competitive Landscape.” That was also after a good year of having conversations with Gartner on the topic and being very consultative to them on the category. But for us, that really solidified like, “Hey, we have done it.”
Drew Neisser: Which is amazing. You talked about it, there was a year between getting the analyst, getting them involved in this conversation over and over and over again to bring them along. I know there’s some pride of authorship with the analysts. They like to name these categories and they often want to be the first one. You are giving them something they want to be able to do.
On the other hand, they have to believe it. Like Chip said, it’s got to be real. Some of the things that happen after that—I guess we could talk about it—what were some of the milestones or what have you done to maintain that you’re the leader in this world?
Gabi Zijderveld: Yeah. Actually, I’ll add a little bit about what we did also before getting Gartner to that point because we had spent a lot of time developing our talk track. I think we were a little bit less methodical than Chip in saying, “Okay, we’re going to create a category, and this is how we’re going to do it. This is our plan.” We spent a lot of time on the messaging and positioning, and that is what I consistently brought to Gartner.
But in the meantime—and this was also a multi-pronged approach—we were getting a lot of inbound press interest from the big publications to newspapers to the trade industry, trade press to tech press. At the same time that I was having these conversations with Gartner, we were also having these same conversations with reporters, and we started seeing this noise bubbling up around our space and people starting to use this terminology, “emotion AI,” that we had started.
Getting back to your question, after this Gartner report that more or less put the seal of approval on it, if you will, I think our biggest challenge was to stay focused and stay with our narrative, especially for our CEO who is really my thought partner in all of this. She felt like, “Okay, I’m constantly going on stage talking about the same thing and talking about this emotion AI thing. We need to come up with something new.” I’m like, “No, no, no. We need to be consistent. Let’s stick with it.”
It was very detailed, though. It was really all about: What is emotion AI? Why does it exist—you know, what’s the need? Why did we create this? Who cares? How does it work? There’s a lot to be said about the ethics of it all. Where is it being used today and where do we see it going in the future? That was really consistently what we kept talking about. Then you build in the proof points.
Drew Neisser: It’s this narrative, which is really interesting because—and we’ll get it when Chip rejoins us—there was a difference. They set out from the beginning to create this; that’s what the company was started for. Yours was a journey and I really enjoyed your boss’, Rana’s, book. Her journey in and of itself is just incredible. A woman from Egypt who is an engineer and literally her Ph.D. was about creating the first software that could read emotion. Certainly, you had your bona fides in the thing.
What do you think—maybe give us one more milestone or thing. Gartner does it—what is the benefit, I guess, of having emotion AI attached to your brand?
Gabi Zijderveld: I think the benefit is really that it creates a lot of inbound demand and credibility with clients. At the end of the day, that’s why it matters. I will also say I think, for us, the timing was really right because there was this renewed AI wave. Everyone was beginning to ride the AI wave. Every new company was doing AI, but we built a very credible narrative that proved why this is really AI. And part of the narrative was talking about our deep learning and how we collect and annotate data to train our machine learning models and to validate all that technical stuff that goes with it.
[15:23] Bernd Leger, Three-Time Category Creation Veteran“When you get to that point where your requirements become the de facto standards for the industry, that's when you're doing the happy dance.” —@berndleger @Mimecast Click To Tweet
Drew Neisser: We’re going to bring on Bernd, our next guest, and then we’ll bring everybody back for a conversation. Hello, Bernd. Bernd Leger is a veteran tech CMO with category creation experiences at Nexthink and I think you had it at some previous companies as well. First of all, how are you? Oh, you’re on mute.
Bernd Leger: Sorry about that. Great to be here, Drew. Thanks for having me on the show. I’m doing great.
Drew Neisser: Hey, it’s great to have you. When you’re thinking about category creation, it’s not like you can wave a magic wand and say, “Hey, we’re a category unto ourselves.” Where does the process start at least with your experience at Nexthink, for example?
Bernd Leger: Yeah, that’s a great question. For me, it’s like my third go-around in creating a category. I’ve done it at a CloudLock and Checkmarx and Nexthink.
I just also want to say, category creation is not for everyone. You don’t necessarily have to create a category. In many markets, it’s perfectly reasonable not to try to define your own category. In many cases it is, it is valuable to create your own category.
Where I’ve started typically is you define a group of people who want to be involved and who should be involved in the category design. I would also say, in many cases, it’s not always category creation. In some cases, it could be a category redefinition. For example, Checkmarx. We were in a space that had been around for 15 to 20 years. What we required there was to redefine the requirements and the needs of the marketplace. I think that really shifted our trajectory and how we were able to change the fortunes of the company moving forward.
Drew Neisser: Where do you start? It’s interesting—I definitely see the distinction. The nice thing, as I mentioned earlier, if you in fact do create a category and you become known for it and that category has value, you’re just instantly the authority in the category. You would not go to XYZ brand to talk about inbound marketing. You would go to HubSpot. That is the source. They created that idea. Let’s take Nexthink, for example, first of all, what category did you create?
Bernd Leger: At Nexthink, the category we’ve created is called “Digital Employee Experience.” The space is all about organizations helping their employees to really optimize their experience and their journey. Everything from how you’re able to work from home in a remote working environment to do you have everything that you need to be successful at work. And it’s all from a digital experience perspective, so like your laptop, both the quantitative and the qualitative aspects of your workplace.
And the market, we’re at the point where we, similar to Chip and to Gabi, are at the point where the analysts are now recognizing that this is a space. For the first time, Forrester has adopted a wave that is now stating that this is a market and Gartner is at that point as well. That is that external validation we’ve been looking for.
Drew Neisser: When Forrester does that, is this like a moment where you’re doing your infinite happy dance?
Bernd Leger: Well, as long you’re the leader in the wave, but I think you are—you’re doing the happy dance. In our case, that was the case. You had asked Gabi as well, what are the benefits? I think some of the key benefits are that you’re able to redefine the requirements.
I think that is a magic moment when you’re able to say, “This is what it takes for an organization to satisfy the needs of your buyers.” When you get to that point where your requirements become the de facto standards for the industry, that’s when you’re doing the happy dance. Clearly, having a four-star state that we’re a leader in the space is a critical component of that.
Drew Neisser: I’m just imagining—I’m going immediately to a buyer’s guide where you list all the things that you should be looking for. Of course, you’re the only ones who have it because you defined it.
Bernd Leger: 100 percent.
Drew Neisser: That makes a lot of sense. After you get the analysts to agree, how do you maintain your leadership? What do you need to do to keep it going?
Bernd Leger: I think a lot of it has to do with continued thought leadership. In our case, we’re working extremely heavily on making sure we have compelling content. We want to become the destination for, in our case, head of end-user computing professionals for them to get educated on the marketplace.
It’s not just about our solutions, but it’s basically becoming the destination for people to learn. You mentioned HubSpot and I think that’s what HubSpot did really well. They not just coined the term “inbound marketing,” but they became the destination for people to learn how to do it. I think that’s similar in our case from an ongoing perspective. We want to be that destination for people to learn about digital employee experience.
[20:23] The Relationship Between Category Creation and Company Culture“This has to be driven throughout the entire organization and it has to be adopted by the entire teams.” —@berndleger @Mimecast Click To Tweet
Drew Neisser: Let’s bring Gabi and Chip back. While they’re joining us, I have a question: Hey, Google, what is category design?
Google: According to Wikipedia, category design is a business strategy and discipline that helps companies create, develop, and dominate new categories of products and services. Category design extends beyond the leadership teams’ narrower focus on products, company culture, and business models.
Drew Neisser: Okay, so that’s interesting. Company culture and business models. We haven’t really talked about that as part of this notion of category creation. Have you guys been thinking about that at all in terms of how that extends into your thinking? Did Google give us some fresh thinking here?
Gabi Zijderveld: I think the culture is interesting, but Chip, go ahead, please.
Chip Rodgers: I think it’s about really reshaping the thinking and having a strong point of view. One of the things that we did actually when we started this journey and meeting with analysts is we had sessions with analysts, briefing sessions with analysts. We built a talk track around the founder’s story and what led them to create this, to take this crazy startup journey. It’s never easy.
But they had both been through a lot of pain. It helped—just telling that story says, “Oh, this is really interesting that these guys had this problem, and they went out to go solve it and build something because they figured that other people had the same issue.” I think that that’s ingrained in everything at the company. It is part of our culture.
Drew Neisser: Interesting. It is sort of a founder’s myth part of this category creation. In many ways, Gabi, with the book that Rana did, it’s the same kind of thing. Here’s the journey that brought us here that makes it feel so important and legit and it gives you a back story. I think that’s a fascinating part of this and a nuanced part of it.
There could be an impression that you just wave a magic wand and poof, you have a category. Because we can think of and name so many of them, but we know that it isn’t. I’m curious, from your perspective, what’s the hardest part of this? Maybe, Gabi, you could start. What is the hardest part of creating a category?
Gabi Zijderveld: I think there’s actually a lot of hard parts to it. I think for us as a small company, it was really quite critical that we stuck with the narrative especially as a start-up when you applicability across many industries. It’s really easy to get distracted and keep the focus away from that talk track that Chip also referred to.
I think also, with a small team and just super tiny budgets, just slugging it out and being super creative. I agree totally with what Bernd said around thought leadership and all the content development that needs to be around it. I think just, for us, it was very much about being resourceful and crafty and just getting a lot of things done from the content to all the events we’ve got to managing the press to managing the analysts.
And the big aspect—starting off, it was challenging, but then we got momentum—was really an ecosystem development, so building alliances and partnerships with companies adjacent to us or sympatico to us and getting them on board to start telling our story as well because we found a way to defend them as well. That really got it moving for us.
Drew Neisser: That’s interesting. Well, that plays right into Chip’s world of ecosystems. Bernd, I’m curious, from you, you’ve done this three times now. What would you say are the hardest parts of category creation from your experience?
Bernd Leger: I think, from my experience, the hardest part is when your CEO says, “Hey, let’s create a category.” Then, the notion is that this is a marketing-led initiative or a CEO-led initiative, and I think that’s a recipe for failure. What I found is that typically this has to be driven throughout the entire organization and it has to be adopted by the entire teams.
I’ll give you an example of that. In our case, at Checkmarx it actually happened that we didn’t just take what the product did and redefined that. We actually helped define the product strategy by creating a definition of the category, that influenced where our product was going as well. It does take a village to raise a child and I think it’s important that it’s not seen as a marketing or a C-level initiative, that it’s really seen as a cross-functional initiative where the entire company has to chip in and coming back to content or even sharing on social. You talked about culture—that has to be ingrained in the entire DNA from hiring to what all different teams work on a continuous basis.
Drew Neisser: Yeah, because suddenly, you have a North Star where you’re saying, “This is where we’re going. You better be on board with this.” I think it speaks to what Google was sharing with us as well. As you said, Bernd, it’s about the culture.
[26:06] On CMO Huddles
Drew Neisser: If you don’t mind, I’m going to do a little plug here for the Huddles. We launched CMO Huddles in 2020. It’s an invitation-only subscription service that brings together an elite group of CMOs to share, care, and dare each other to greatness. One CMO described a huddle as “A cross between an expert workshop and a therapy session.” Chip, Gabi, does that match with your experience?
Gabi Zijderveld: Absolutely. I remember in the early days of the pandemic shut down—exactly a year ago, I think in March—we had our huddle and it was a weekly thing at the time because I think everyone was just like, “Ah! What are we going to do?” Just being able to share these best practices but do it in a circle of trust, with honesty and vulnerability. Then, of course, the Black Lives Movement was taking place and we had some really profound conversations about that. I love the description because it’s learning, but it is a good therapy session as well, especially in those days when we were figuring this pandemic out.
Drew Neisser: Yeah, that was amazing. And Chip?
Chip Rodgers: Absolutely. It’s been great to really connect with these CMO huddles. We now have monthly sessions like this where eight to ten to twelve will join together and just share ideas and challenges, what’s working, what’s not working, what technology is working, what new approaches, what are some measurement benchmarks, and things like that that we throw out.
And Drew, you do an amazing job of capturing all the notes and then putting it out in an email that is anonymized. You don’t say who said what, but you really capture the things that happen. Then you’ve also created this Slack group and people are in there now all the time sharing ideas. It’s a terrific program.
Drew Neisser: I love it. Thank you, guys. That’s great. If you’re a B2B CMO that can share and care with the best of them, visit CMOHuddles.com.
[28:26] Tips for Building and Maintaining a Relationship with Analysts“I think one recommendation I would have in regards to building the category is finding that analyst who is out there who wants to build a brand for him or herself as well.” —@berndleger @Mimecast Click To Tweet
Drew Neisser: We are just a couple of minutes away from the gin tasting. We’ve talked a little bit about how analysts fit into this whole thing, we’ve all said they’re really important. One question that’s come up, and it’s come up in a huddle—do you classify the expense of marketing to analysts as brand work or demand gen work? We know that those budgets really matter because one of them is always up for grabs and the other one is, “You can’t touch the demand gen.” Any thoughts on that?
Gabi Zijderveld: I have a weird one here to share, if I may. For us, it’s been mostly brand. I’ve built really great relationships with especially one analyst over at Gartner, a lady over in Germany. We’ve just had really good conversations, very consultative. I would even advise around, “Hey, you’re these competitors of ours that really should be in your report.” Not just like touting our own story in our own company.
But here’s the thing. As a start-up, especially this year with my budget getting cut, I can’t afford Gartner at all. I used to get courtesy copies of the reports that I would spend hours working on and they changed their whole policy, so even if I spent hours with them, I don’t even get a courtesy copy anymore. It is bizarre, and they offered me start-up pricing, which is prohibitive for startups without a budget.
Drew Neisser: That’s ironic.
Gabi Zijderveld: It’s very strange.
Drew Neisser: Chip, Bernd, any more thoughts on analyst’s management and relationships and keeping those things going?
Chip Rodgers: I have a habit, I put a tickler in. Every month, I have a list of about maybe 15 or 20 analysts between Gartner, Forrester, IDC, Constellation, that I just try and—maybe it’s a customer story, a win, or some new thing that we’ve come out with that’s even just a slide that it just says, “Hey, this is really interesting. I thought you’d like it.” To keep the relationship going, have them have a continued sense of the direction that things are going and the momentum.
Drew Neisser: You’re really becoming a trusted source of information for them and a consistent one over time.
Bernd Leger: Can I add one comment, Drew? I was going to say, I think one recommendation I would have in regards to building the category is finding that analyst who is out there who wants to build a brand for him or herself as well. In many cases, you’re working with analysts who are not the leading edge, they’re kind of the lagging indicator for where markets are going. If you can identify a couple or that one analyst who is on board with your vision and who will go along with you to make a name for him or herself, that’s been a good recipe for success for me currently at Nexthink and in the past as well.
Chip Rodgers: Good suggestion.
Drew Neisser: What a great suggestion. I love that because any time that you can help someone else build their brand in this world, you’ve earned a lot of brownie points.
[Show Break: To get your free ½ hour consulting session with our CEO, visit http://renegade.com]
[32:55] Why Category Creation Requires Patience“You can't have a category one. That's part of what takes time.” —@chiprodgers @WorkSpan Click To Tweet
Drew Neisser: Knowing how hard it is to create a category, think about what would you do differently this time. If you could start again with your respective categories, what would you do differently? Who wants to take that?
Bernd Leger: I would say, for me, it’s setting expectations in the right way. Category creation takes time. It’s not a short-term initiative. It takes time. I think just setting expectations internally that it’s going to take time as we talked about the analyst community—this isn’t something where an analyst is going to switch over his or her thoughts in six months. It could take a year, could take two years, it could take three years. Just making sure you’re setting expectations the right way, I think that creates better alignment. You’re in it for the long haul.
Drew Neisser: Yeah, I think that’s such a good point because if you start down this road and then you try to pivot—and Gabi you had referenced that as staying focused on it. That’s one. Chip, knowing again what you know now versus two years ago, what would you do differently?
Chip Rodgers: You know, I think Bernd’s suggestion actually is a good one, which is, it takes time. I don’t know that we would do anything differently other than we get impatient.
Drew Neisser: Who doesn’t right? “Let’s do this, come on! We’re a category! Everybody else, get with it!”
Chip Rodgers: For a while, as we were maybe a year into it, we had good recognition from analysts and others that this was something that was really different. I think getting back to Gabi’s point, and Drew, you said this as well—you can’t have a category one. That’s part of what takes time. Not just the thought leaders, but to have everyone come around and say, “All right, woah, there’s an opportunity here. Let’s go jump into it and start building something.” That’s one of the things that takes a while to really make it turn into a category.
Gabi Zijderveld: One thing that struck me, when Bernd was providing that observation on managing expectations, what I realized was that my CEO and I had very different perspectives on maybe what came down to success. I was doing a little bit of the joy dance more so when our competitors started copying us than even that Gartner report. I felt like, okay, when these companies are shifting their narrative and mimicking their website and their messaging to be ours, that means we are doing something right.
Gartner can say all they want because, what was mentioned earlier, there’s also a stake in it for the analysts to build their own brand so they might attach to something like that. Whereas I was doing that joy dance, our CEO was freaking out. She’s like, “How can they do that? We created it.” “No, it’s good! Good. It means we’re onto something. Stay the course.”
[36:18] How to Manage Competition During Category Creation“You have to have strong product differentiation and an investment in engineering to ensure that you have that competitive differentiation.” —@berndleger @Mimecast Click To Tweet
Drew Neisser: That begs the question as we’re thinking about this, it’s not a category until our competitors come along, and obviously, they see what you’re doing because you’re the one who started the conversation. If they copy it directly— which happens, we’ve all seen it happen—what’s the play then?
I’m curious because it’s like, we know that the way free market works is someone creates an opportunity, other people follow in. In the old rule, there’d be three profitable companies in a category and then everybody else is competing for scraps of price. But what’s the play? Do you have to keep redefining the category a little bit to stay ahead?
Chip Rodgers: I think in our case, it’s really two things. One is the company was founded four and a half years ago. We have put a lot of energy, resources, time, and thought into engineering, to product design and engineering.
Even if someone already gets the idea and tries to do it, it’s going to take a couple of years just to go try and build something like this. The other is the network. With WorkSpan, we have some really big customers—SAP, Intel, Microsoft, Citrix, Cisco—as soon as you get more partners and more companies in this, we’re built as a network, so once you have that network built, then it’s like LinkedIn. Is there another LinkedIn? There’s no other LinkedIn. That becomes the moat as well, is that someone else needs to go create their own network.
Drew Neisser: Right. You’ve built in a sustainable competitive advantage in that we design it into the product and this network which, again, increases the value of the product because yours is an ecosystem. So, you better have a large ecosystem. I’m curious, Bernd, how does this align with the way you thought about evolving the categories that you’ve been in?
Bernd Leger: I would agree with Chip. There’s certainly an element of you have to have strong product differentiation and an investment in engineering to ensure that you have that competitive differentiation. I also agree with Chip on the ecosystem play, looking at yourself in a way of how can you attach yourself to adjacent spaces or to adjacent partnerships of other organizations who think like-minded and who can help to further your cause. We talked a little bit about the content side and the ownership aspect, and you can differentiate that way.
The last thing I’ll say is what we’ve done successfully over in multiple companies now is leveraging your customer base as well and having your customers speak on your behalf. Things that we’ve invested in heavily are things like Gartner Peer Insights or G2 Crowd where you’re letting your customers speak on your behalf. You have this multipronged approach of the analyst community who are manifesting your leadership, you have your customers manifesting leadership, and then you have your ecosystem manifesting leadership. That combined helps to really create that differentiation in the marketplace that hopefully will keep your competitors at bay.
Drew Neisser: I am so glad you brought up customers in this conversation because obviously there is no category without customers and ultimately, customers need to feel that they’re an important part of this. I know from other communities of creation, there’s a sense of proprietary-ness that a customer that’s discovered and is an early adopter feels better towards the category. They go like, “Yeah, we got that early. We’re part of this thing,” and they become literally customer champions, which is the best thing. You see that in this world, and I could use inbound, it started with a few people and now there’s thousands, right? You get to this place where your community can do a lot of the work for you.
This is the moment in the show where I always ask Dr. Benjamin Franklin what he would say to this whole thing of category creation. What Ben always focused on is if you worked hard, you would accomplish a lot. This was an early to bed, early to rise prescriber, didn’t necessarily live that way. But anyway, if we think about it, we could summarize his thoughts on this in four words: “Industry needs not wish.”
What he’s saying is, if you work hard often enough, you’re not wishing because you’re doing it. What you guys have described is you’re really working hard. It’s not just about saying, “Hey, we’re a category. Emotion AI, hashtag, we’re done.” We’ve been talking about product and product enhancement. We’ve been talking about partnership. We’ve been talking about culture and all those things that you need to do to really be a legitimate category creator.
So, we’ve talked a little bit about customer competition. I’m curious if any of you have had situations where you felt a competitor just went too far or you had to smack them down or they tried to copy you and it didn’t work?
Gabi Zijderveld: A little bit, but I think what we have noticed is that in client engagement—and we’ve had a few competitive wins where we got accounts away from our competitors. I think, and this is such an age-old adage, but you become a partner to your client, right? It’s very consultative, collaborative, and we hear over and over again that ultimately they choose us because we don’t just throw our technology over the fence. We really work with them, people to people, to get them successful. Of course, in the long run, that’s not how you scale your business, but I think especially in the early days of creating this category and wanting to maintain your leadership, that is super important. So that’s been something that’s made a difference for us.
[42:52] Prerequisites for Category Creation“If you want to create a company that is going to thrive and expand and really launch, it has to not only be unique, but it also has to be tied to a larger trend.” —@chiprodgers @WorkSpan Click To Tweet
Drew Neisser: As I’m thinking about this and looking at the three of you as CMOs who have had this experience of category creation—as you look at that, is that like an insurance policy on your resumes in the sense—and again, Bernd, you’ve done this several times now—that there are always going to be brands that are going to want to do this? Do you see that as part of your personal brand now?
Bernd Leger: In my case, I do. I think there’s something that I see highly in demand. I think regardless if we call it a category or category creation or category design or if it’s a matter of positioning your company for success, I think that’s a critical skill set that every CMO should have. I do think it’s a skill set that helps as practitioners enormously in how we differentiate ourselves or how we help companies to succeed, so I would say absolutely.
Chip Rodgers: Yeah. And the only comment I would add to that, Drew, I touched on it earlier. It actually has to be something new. You can’t just say, “Oh, we’re going to hire this person and they’re going to create a category.” It’s got to be a good combination of things to make it work.
Drew Neisser: Yeah, it’s gotta be real. And I think that that’s such a good point. There’s a lot of sense in the marketing world that it’s smoke and mirrors and that you can come up with a positioning and boom, then it’s just a few words here. What we’re really talking about is something quite substantive. I guess what you’re saying is, be wary of the company that says, “Hey, CMO, come create a category” and then you start digging and you say, “No, you’re no different than anybody else. There’s no ‘there’ there.” That is an interesting point.
Well, let’s look ahead for a second. Do you think that more brands are going to seek to create their categories? And again, I’ll go to you, Bernd. Do you see this as a bigger trend? I mean, it wasn’t very hard to find the three of you creating categories. I know I had Anthony Kennada, who had done it at Gainsight and was doing it again. Is this something that you see happening over and over again?
Bernd Leger: Well, I think Chip brings up a really interesting aspect which is you have to have something unique, and as I said earlier, category creation is not for every company. In some cases, it’s perfectly fine to tackle an existing market because category creation by definition means you have to create something new, and new means that you’re redefining something. It’s an interesting aspect. I do think I see a lot of interesting category creation overall. And like I said, if it’s category creation or if it’s redefining or repositioning your organization for success, it’s a very similar skillset that I think is important.
Drew Neisser: Interesting. I’m going to go back to some very basic marketing thoughts as we come to a close here. One thing—
Chip Rodgers: Drew, can I just—one quick thing we haven’t really touched on. I think the other aspect that’s important is—and I think, Bernd, you’re touching on it—if you want to create a company that is going to thrive and expand and really launch, it has to not only be unique, but it also has to be tied to a larger trend.
It needs to be something that’s really important where, I mean, in our case, it was the move to cloud, public APIs. It’s really easy to plug and play technology, but it’s not so easy to build those agile business relationships. That was the challenge. Here’s this huge trend of cloud, so you know that, and it just like connects immediately—I’ve got these partners and they’re not… That’s just another aspect I would bring to category creation‚ it’s got to be part of that, and you need to be able to articulate that as well.
Drew Neisser: Right. That’s a great point. In the early days of my career, I worked on packaged goods products, and if you were a leader in the category, you actually probably created the category like a Kleenex. They actually created the category and everybody else is competing with them.
So, what you ended up doing, the rule of thumb was, you sold the category, right? This goes way back, and it gets interesting, when you think about Kodak, they were the film category. Kodak doesn’t exist anymore, but for a good hundred years, that was billions of dollars’ worth of business. They owned the category. And so, what did Kodak sell? They sold memories. They sold the notion of taking pictures. They didn’t say, “Hey, buy Kodak instead of Fuji.” They didn’t have to bother. They had 90 percent of the category.
This is a long-winded way of saying, “Sell the category. Tell me about that and what you’re doing.”
[48:11] How Content Can Support Category Creation“We're bringing others in that we have conversations with about the bigger category.” —@gabizij @Affectiva Click To Tweet
Drew Neisser: For example, Chip, you have a podcast where you feature people who are leading in this area. Talk a little bit about the mindset of the marketer and the things that you do that are different because you’re selling the category. You’re just not putting up your speeds and feeds versus somebody else’s; you’re saying there’s a new trend, there’s a new way of doing things. Talk a little bit about that in terms of the difference.
Chip Rodgers: Yeah, in our case, our ten-step plan was to identify and bring along these fellow thinkers, fellow travelers, along this journey. People that are having pain, haven’t had the attention of anyone, they’ve been sort of out there struggling and still doing spreadsheets. Let’s bring those stories to light. We created a community, a place for people to share things, share those stories, and again, make heroes out of those people. Broadly, I mean, the podcast, many are not customers. It’s really about people that are in this space and doing their best with the challenges that they have.
Drew Neisser: Yeah. And I think that’s so great. The fact is they don’t have to be customers. That’s the part of this thing that you’re thinking about. You’re thinking about category. And Gabi, I know that you did, and we talked about this on the show, you created an event out of nothing and brought a bunch of people together with the first emotion AI conference. What, 2017?
Gabi Zijderveld: Yeah, exactly. Very similar to what Chip was just describing. You build an ecosystem of like-minded people and supporters and those can be your clients, but don’t always have to be your clients. You bring them together. We did exactly that with the Emotion AI summit. And in a virtual world, we just shifted to digital events. And like you, Drew, we got super crafty with live streams like this. We were able to get amazing people and to this day and get amazing people on because it’s very accessible and we just basically keep pounding the pavement. But not just us talking about it. We’re bringing others in that we have conversations with about the bigger category.
Drew Neisser: So, Bernd, we’ve talked about podcasts, we’ve talked about events. Is there some other thing in your playbook that you go to as part of an executional part of making sure that you build this category effectively?
Bernd Leger: Yeah, it’s very similar to what Gabi and Chip said. It’s a similar playbook in regards to creating your own industry conference. We’ve done that face-to-face, now we’re doing it virtually. We have podcast series. We’ve talked about this notion of creating content and bringing the broader ecosystem together. As I mentioned earlier, we use a lot of customers to give the message, so not us always preaching, but letting our customers tell the story, so that’s a big part of what we do. It’s not dissimilar to what Chip and Gabi are doing as well.
Thank you, Chip, Gabi, Bernd. You’re great sports and amazing category creators. Thank you to the audience for staying with us. Let’s cue that music!
Renegade Thinkers Live is produced by Melissa Caffrey. Our intern is Charlotte McEvoy. Our botanical expert is Nicole Hernandez. For show notes and past episodes, please visit renegade.com, home of quite possibly the savviest B2B marketing agency in New York City. I’m your host Drew Neisser, and until next time, keep those Renegade Thinking Caps on and strong.