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The Pirate's Guide to Dominating Markets
When Steve Jobs unveiled the iPad in 2010, he didn't just introduce another gadget. He created an entirely new category of devices that would generate $10 billion in revenue within its first year. Eight years earlier, Bill Gates had attempted something similar with the Tablet PC, predicting it would become "the most popular form of PC sold in America" within five years. It failed spectacularly. The difference wasn't just in product execution-it was in category design. Jobs positioned the iPad as solving a problem consumers didn't know they had, while Gates tried to shoehorn Windows into a different form factor. This pattern of category kings dominating markets while competitors struggle repeats across industries and eras, from Clarence Birdseye's frozen foods to Uber's ride-sharing revolution. "Play Bigger" has become a business cult classic since its 2016 publication, with entrepreneurs and VCs alike adopting its framework for creating market-dominating companies. The book's influence extends beyond Silicon Valley, with its concepts appearing in Harvard Business Review and being taught at leading business schools worldwide.
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The New Economics of Category Kings
In today's hyperconnected world, companies that define and dominate new categories capture 76% of the market capitalization in their spaces. These category kings don't just win-they take almost everything, leaving competitors fighting for scraps. Google captures search, Facebook dominates social networking, and Apple takes 93% of smartphone industry profits despite having less than 20% market share. This winner-take-all dynamic isn't just about technology-it's about how our brains work.
When faced with overwhelming choices, humans naturally organize solutions into categories and favor the company that defines the problem. The first brand to occupy a position in our minds gets twice the long-term market share of followers. This cognitive reality is supported by research on biases like the Anchoring Effect, which explains why early category entrants become mental reference points, and Choice Supportive Bias, which makes us attribute positive qualities to products we've chosen.
The economics of category kings are accelerating. Our research shows startups born between 2009-2014 reached billion-dollar valuations three times faster than those from the early 2000s. Meanwhile, companies that fail to establish category leadership within six years almost never become kings later. This isn't just investor speculation-it reflects fundamental changes in how markets form and consolidate.
Technology has dramatically lowered barriers to entry-what once cost $1 million to launch now costs $10,000-but paradoxically increased the advantages of market leaders. Category kings enjoy compounding benefits: best data, top talent, premier partnerships, and acquisition power. When Uber was valued at $40-50 billion in 2014, many thought it overvalued. Yet investors recognized Uber wasn't just creating a better taxi service but an entirely new transportation category it would likely dominate for decades.
The most exciting companies don't sell us better-they sell us different. They introduce entirely new categories that make previous solutions seem outdated. While "disruption" is celebrated in tech circles, it's merely a by-product of creation. Elvis didn't set out to disrupt jazz; he created rock and roll.
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The Evolution of Category Design
Business strategy has evolved through distinct phases, each reflecting the technological realities of its era. In the TV age of the 1980s, "Positioning" by Ries and Trout focused on maneuvering products to the top of existing markets. As computing became mainstream in 1991, "Crossing the Chasm" addressed marketing innovations within established categories. During the dot-com era, "The Innovator's Dilemma" introduced disruptive innovation concepts.
Today, the transformative force is category creation-developing entirely new markets for new products. This shift has been accelerated by technological developments since 2000: Google's search dominance, Facebook's social networking, Amazon's cloud computing revolution, and Apple's iPhone transformation. Combined with Agile development methods, new funding mechanisms, and dramatically lower startup costs, the barrier to entry has collapsed.
Category design has emerged as a new business discipline, similar to how product design emerged in the 1980s and experience design in the early 2000s. It involves simultaneously creating a great product, company, and category-a comprehensive approach impacting every aspect of an organization.
Jawbone serves as a cautionary tale of missed category design opportunities. Despite creating three innovative products that each pioneered potential new categories-noise-cancelling Bluetooth headset (2007), Jambox Bluetooth speaker (2010), and UP3 fitness tracker-the company repeatedly failed to develop and dominate these categories. Even when Fortune magazine declared the Jambox was "creating an entirely new consumer category," Jawbone couldn't capitalize, eventually holding just 5% market share as competitors flooded in. With the UP3, delays allowed Fitbit to steal the category entirely, capturing 68% of the North American market.
Despite its inventiveness, Jawbone's failure to properly execute category design prevented it from becoming an Amazon or Apple-level success. The lesson is clear: it's not enough to invent a great product; you must design the category around it.
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Discovering Your Category's Missing Piece
The journey to category kingship begins with discovering a category through powerful insights. These insights typically come in two forms: market insights and technology insights.
Market insights involve seeing needs that technology can solve. Flipkart created an India-specific e-commerce solution with cash payments and motorbike deliveries to overcome local challenges Amazon couldn't address, growing into a $15 billion company. Marc Benioff saw CRM software's shortcomings as the "missing" element he could fix with the Internet. Jeff Bezos recognized the Internet's explosive growth potential and methodically analyzed twenty mail-order product categories before realizing books had unique potential-physical bookstores could only stock 100,000 titles while millions existed in print.
Great market insights often seem crazy at first-they're nonconsensus views that entrepreneurs must believe in when no one else does. When Manoj Bhargava created 5-Hour Energy, he questioned whether tiredness and thirst were necessarily connected problems. Existing 16-ounce energy drinks competed against sodas and coffee while tasting terrible. By separating these problems, he created a new category of energy shots that made him a billionaire with 90% market share.
Technology insights typically come from scientists or engineers who see ways to create something entirely new, often before identifying what problem it might solve. VMware's founders developed virtualization technology before understanding its applications. Skype emerged from an unlikely source-the creators of file-sharing site Kazaa realized their peer-to-peer technology could enable free international calls. Pixar began with Ed Catmull's insight that computers could create animation, but initially failed selling animation computers before pivoting to making computer-animated films themselves.
Whether market or technology driven, insights must ultimately answer three critical questions: What problem are you solving (one people didn't know they had)? What category would you create by solving it perfectly? And what's the potential size if you won 85% of that category?
The category discovery process requires entrepreneurs to systematically identify the category that fits their insight rather than assuming customers will naturally understand their product. At Origami Logic, this meant exploring who their customers were (heads of analytics, digital marketing leaders, CMOs) and defining the "from/to" transformation they offered-moving marketing measurement from art to science, interpretation to fact, and lagging spreadsheets to real-time reporting.
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Crafting a Powerful Point of View
A powerful point of view (POV) is what separates beloved companies from merely tolerated ones. Unlike generic corporate-speak, a great POV tells a compelling story that reaches people emotionally and shifts their thinking. It frames a new problem your category identifies and positions you as the solution.
The most effective POVs focus on being different rather than better, as "different" forces customers to choose between what was and what could be, while "better" merely reinforces existing category kings. A well-crafted POV becomes the company's identity, culture, and invisible guiding hand-attracting the right employees, investors, and ecosystem partners while repelling those who don't align with your mission.
Stories have always driven human progress, from Homer to Shakespeare to Steve Jobs biographies. Brain research proves stories have 6-7 times more lasting impact than raw facts, with character-driven narratives actually increasing empathy-producing oxytocin in the brain. That's why category designers craft compelling POVs-they condition markets to embrace new visions and lead customers on their from/to journey.
Successful examples include Marc Benioff building Salesforce around "the end of software" and corporate responsibility, Apple developing a POV around beautiful design and seamless experiences, and GoPro creating an adventure-focused "point-of-view video" category that competitors couldn't match despite better technical specs. When companies establish strong POVs, their subsequent moves feel inevitable rather than surprising.
A great POV must be perfectly timed-pushing people just enough into the future while remaining achievable with current technology. If too present-focused, it seems unexciting or copycat; if too far ahead, products can't deliver and audiences won't believe. Reed Hastings masterfully timed Netflix's evolution-first as DVD-by-mail when streaming wasn't viable, then introducing streaming in 2007 when technology and 4.2 million subscribers were ready. His company name always signaled his ultimate vision, but he waited until the market could support it.
Creating a powerful POV requires writing it down explicitly-not just keeping it in the founder's head. The entire leadership team must align around this documented story that works like a movie trailer for your category. It should concisely explain the problem, outline a vision, provide a blueprint, and show potential outcomes.
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Fighting Gravity: Mobilizing Your Organization
Category design serves as an antidote to "gravity"-the forces pulling companies toward rational but ultimately limiting decisions. In a company's early days, the founder/CEO typically focuses on product design while neglecting company and category design. As the business grows, the CEO gets swept into operational duties, leaving product direction to others who may prioritize customer requests for "better" rather than maintaining the "different" vision.
This gravitational pull affects every business function, from sales to engineering, all preferring known markets over creating new ones. Fighting this gravity requires either a "maniacal totalitarian visionary" like Steve Jobs, or implementing category design with the POV as true north.
After establishing a POV, companies must inject category design into every part of the organization through a "lightning strike"-a high-impact market event scheduled within 3-6 months that captures attention from customers, investors, analysts and media while intimidating competitors. This concentrated approach contrasts with ineffective "peanut butter marketing" that spreads resources thinly.
Beyond the lightning strike, category kings must create four essential documents to make their implicit vision explicit: a category blueprint showing the category's future evolution; a product taxonomy that properly names and organizes offerings to align with the category vision; detailed customer use cases that clarify who will use the product and how; and a category ecosystem map identifying third-party developers, consultants, partners and even competitors who will participate in the category.
The mobilization phase reveals the truth about a company's capability to execute category design. While leadership can fantasize during POV development, mobilization exposes every weakness-from product flaws to marketing deficiencies to engineering limitations. The critical question becomes whether the category strategy fits the company's capabilities. Some companies discover their vision is too ambitious (like "an eighth grader wearing his dad's suit"), while others find it's too small.
When the fit is wrong, leaders must decide whether to downsize the vision or grow into it over time. Companies like Amazon and Facebook started with focused POVs (world's biggest bookstore; connecting college students) while keeping grander visions in reserve until they could grow into them.
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The Lightning Strike: Commanding Market Attention
Lightning strikes are category-defining events that evangelize new problems or new solutions to old problems. They demonstrate that your company understands the problem and knows how to solve it, making customers believe in your solution while sending competitors into panic mode. In today's noisy market where thousands of companies compete for brain space, these concentrated shows of force are essential for breaking through.
Sensity executed a legendary lightning strike in 2013, transforming from a small LED light company called Xeralux into the pioneer of Light Sensory Networks (LSN). With just 43 employees, they planned to hijack the Lightfair International convention, but events forced improvisation. When the Boston Marathon bombing occurred, a Wall Street Journal reporter rushed their story to press, creating a rolling strike that included a partnership announcement with El Salvador's president and culminated in a packed presentation at Lightfair.
This coordinated assault established LSN as a legitimate category and Sensity as its king, leading to strategic relationships with industry giants like Cisco and $36 million in funding despite their small size. Their pirate-like maneuver demonstrated how a well-executed strike can help a small company outmaneuver established competitors.
Lightning strikes take many forms-hijacking existing conferences, manufacturing industry summits, or creating anticipated annual events. Macromedia created the Experience Forum featuring Al Gore to establish itself as the "Experience Matters" company. Apple mastered the art with its product unveilings that synchronize all company departments, partners and ecosystems.
Even IBM's 1964 System/360 launch demonstrated the power of a coordinated strike-hosting hundreds of reporters in Poughkeepsie while running parallel events in 165 cities worldwide, presenting an overwhelming scope of products that scared competitors and defined a new computing category. The results were staggering: thousands of orders, doubled revenue within two years, and complete industry domination for the next quarter-century.
A lightning strike cuts through market noise by establishing in customers' brains that "this company understands my problem better than any other." This concept has deep business foundations in positioning research from the 1960s-70s, where category leaders place their brand "nailed to the one and only rung" of a category ladder in customers' minds.
After the initial lightning strike, companies must maintain momentum through opportunistic "hijacks" of news and events. Mercury Interactive exemplified this approach, becoming a "category execution machine" with nine lightning strikes over four years. When Oracle bought PeopleSoft in 2004, Mercury's team got quoted saying the merger would be "like watching two porcupines mating." When outsourcing to India became controversial, Mercury positioned itself as an expert on making offshoring work.
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The Flywheel of Enduring Category Kings
The most successful category kings like Facebook, Google, Amazon, and Starbucks evolved from modest beginnings into world-changing forces by putting a "category flywheel" in motion. This flywheel allows them to continuously expand their category potential while maintaining their king position.
A category flywheel builds on the foundation of company design, product design, and category design working in synch. The POV must align the company's ambitions with its capabilities while showing the path forward. Regular mobilizations and lightning strikes provide the force that keeps the flywheel spinning, counteracting the gravity of day-to-day business that pulls against category design.
As the flywheel spins, it creates tangible commercial advantages-the Experience Curve kicks in, allowing the king to do more with less than competitors. A powerful ecosystem develops around the king, with users, developers, and peripheral makers all contributing to momentum. Money fuels the flywheel, giving the king resources for acquisitions, marketing, and product improvements. Data becomes increasingly important, especially for cloud-based services. And talent feeds the system as the best people want to work for kings.
Facebook exemplifies the flywheel in action. Starting as TheFacebook exclusively for Harvard students, Zuckerberg methodically expanded category potential-first to other colleges, then high schools, guided by his evolving POV about connecting people online with real-world relationships. The addition of photos in 2005 led to Zuckerberg's concept of the social graph-mapping connections between everyone on earth. Venture capital from top investors, mainstream press coverage, the introduction of Newsfeed, and opening to developers all accelerated the flywheel.
Every category king eventually faces a moment when their current position becomes their biggest inhibitor to growth-when they realize their category will soon run out of potential. No category has unlimited potential, and all kings start by designing categories with distinct borders. When most of the addressable market has been addressed, the company must design and build a new category with greater potential to continue growing.
Some category kings choose to harvest rather than expand their categories. When a company has created a category with massive potential, it may decide to optimize and profit from that position rather than designing new categories. This "category harvesting" requires a different mindset than category design-focusing on evolutionary improvements, maintaining the flywheel, and maximizing profit margins.
The leadership transition from category designer to harvester is critical and visible in many tech companies. Bill Gates was a designer while Steve Ballmer was a harvester at Microsoft. At IBM, Thomas Watson Jr.'s rebellious succession of his father proved fortuitous, as he completely redesigned IBM around electronic computing with System/360, quadrupling employees and increasing revenue ninefold.
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Building a Category Creation Machine
Every legendary startup aspires to become an enduring company, yet most big corporations lose their innovative edge. The rare solution is building a culture of continuous category creation, turning corporate size and longevity into advantages rather than weaknesses.
Corning, founded in 1851, exemplifies a category creation machine despite seeming like the antithesis of Silicon Valley innovation. Over its history, Corning has repeatedly defined, developed and dominated new glass categories-from television tubes to laboratory glass to fiber optics.
The Gorilla Glass story illustrates Corning's category design approach. While the company had developed stronger glass technology since the 1960s through its "Glass breaks. Fix it" grand challenge, it took Steve Jobs' iPhone vision to create the market insight needed. CEO Wendell Weeks recognized the category opportunity: smartphones would need a new type of glass. Instead of making a white-label product, Corning intentionally created the Gorilla Glass category, complete with branding and positioning. By 2015, Gorilla Glass generated approximately $1 billion annually with 70% of category profits.
Amazon has mastered continuous category creation under Jeff Bezos, who conditioned investors early to expect funding of new categories at the expense of short-term profits. Bezos built a culture encouraging bold experiments, noting in his 1997 shareholder letter that "some of them aren't going to work." He identified two paths for Amazon's category creation: "from a customer need to our skills" (as with Kindle, where Amazon hired talent to build hardware despite no prior experience) and "from our skills to a new set of customers" (as with AWS, where Amazon leveraged its infrastructure expertise to create cloud services for developers).
Many established companies claim to be creating new categories when they're merely "kidding"-making peripheral moves while protecting their core business. SAP exemplifies this problem: despite acquiring cloud companies like SuccessFactors and developing HANA, they never fully committed to creating a cloud-based ERP category that would cannibalize their profitable legacy business.
This "kidding" phenomenon appears in many industries-newspapers creating websites without embracing digital transformation, universities offering online courses without fundamentally changing their model. The reality is that category harvesting and category creation rarely mix well in established companies, as the gravitational pull of quarterly expectations prevents true innovation.
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Category Design for Your Life and Career
Category design principles apply not just to companies but to individuals in their careers and lives. Dave's story illustrates the personal side of category design. After discovering his colleague Christopher earned ten times his salary despite being barely older, Christopher told him: "You have two choices in business and in your career. You can position yourself, or you can be positioned."
Category kings like Muhammad Ali, Gandhi, and George Lucas intuitively built careers through category design-creating something different rather than just better. But category kings don't have to be superstars; they exist in every layer of life, standing out by doing something different and making an impact.
Your success depends as much on the space around you as on your abilities. Create a category by defining a new way to solve an existing problem or identifying a problem people didn't know they had. When you articulate the problem well, people assume you know how to solve it. In every organization, unique problems await solutions or old problems need fresh approaches.
Jeff Bezos's approach at Amazon applies to individuals: identify a new need your skills can solve, or identify a skill you have and find a need. This requires harmony-the need must match your skills and vice versa. Always remember to seek different rather than better. Being better means competing on someone else's territory; being different means building your own ladder with yourself on the top rung.
Just as businesses must design company, product, and category simultaneously, individuals should design themselves, their offerings, and their categories together. Design yourself by developing personal beliefs and a lifestyle that fits what you do. Design your "product"-your offering to the world-by developing your skills. And design the space around you to fit your capabilities while still challenging you.
Developing a personal POV requires deep introspection about who you are and what you want to mean to the world. Write down how you define yourself, the problem you solve, and your unique approach. Refine this until it becomes a clear presentation that helps others understand your value. Your POV defines what makes you different and why people should care.
Individual category kings build supportive communities around themselves. Purposefully surround yourself with people you trust and treat them better than you treat yourself. Form bonds beyond workplace walls. These relationships will position you for success and create teams you'll work with throughout your career. Just as categories make category kings, other people make you successful.
Start by becoming the category king in a defined space, then gradually expand outward. Amazon began with books before dominating broader retail. Similarly, individuals should build on their position and move upward, either finding needs that fit your skills or acquiring skills to fit a need. Eventually, when you're satisfied as king of a category large enough for your ambitions, transition from category creator to category harvester, focusing on execution and making a difference.
