How category definition works

We take for granted many of the categories of tech companies that exist: customer success, product analytics, data cloud, devops, revenue intelligence, inbound marketing, observability, headless CMS, CDP. At some point, none of these existed.

Someone (usually a company) made them up and popularized them, but how?

• Category definition happens after the behavior is defined. By the time a category is defined, people are already doing it. The functionality to help them do it exists, usually by the company doing the definition.
• Category definition consolidates. Take a bunch of different concepts, functions, ideas, and even categories, and combine them into one. The goal is to raise the prestige of this collection, “shifts the convo up a level.”
• Basically take two, max three, words. Usually a new combination of related words customers and employees are already using. Revenue orgs and business intelligence already existed when Gong coined revenue intelligence.
• They go all-in: When companies choose this path, they invest a lot in making sure it sticks. Qualtrics invested a ton in making experience management a thing, branding all their marketing, being a key part of their IPO (ticker $XM).
• Lots of content. Not just blog posts, but events, talks, frameworks, benchmarks, industry reports, job titles, LinkedIn skills, and expert analysis. All of these are legitimizing.

What happens after you define a category (successfully)?

• The ecosystem anchors on you. Every category has an ecosystem of companies playing different roles, specializing in different areas, but they all anchor on the original definition.
• You’re a part of every conversation. When people talk about the category, you’ll always be part of the comparison. “How is this different from X?”
• A new budget line is created. Suddenly companies are considering a new budget for the category you’ve defined. Others (hopefully) are doing it. “This isn’t X or Y, but a secret third thing.”
• Good for SEO. Experience management software gets 3,600 searches per month with Qualtrics ranking first. Revenue intelligence gets 1,900 searches per month (Gong only ranks third 😢).
• The pull of consistency. Category defining companies are often permanently connected in people’s minds. This becomes an anchor, which is great if what you’re doing is working, but not so much if not.