Palo Alto Networks insisted on calling its product a "next-gen firewall" despite sales team fears. This forced conversations about replacing incumbents, preventing them from being relegated to a secondary "helper" category and ensuring long-term market leadership.
Prepared realized it couldn't win against GovTech incumbents on their terms of sales relationships and lobbying. Their strategy was to fundamentally shift the competition. By offering a free, easy-to-use product, they forced the purchasing decision to be about technology quality, an arena where they could excel.
When launching into a competitive space, first build the table-stakes features to achieve parity. Then, develop at least one "binary differentiator"—a unique, compelling capability that solves a major pain point your competitors don't, making the choice clear for customers.
Bootstrappers lack the capital and time to establish a new market category. A better strategy is to anchor your product in a known category (e.g., "site audit tool") and then use your unique features (e.g., "that also fixes the issues") as a key differentiator.
Your team's internal names for features often confuse customers. Systematically harvest the exact words customers use to describe outcomes during sales or support calls and use that language to rename features. This self-identifying language, used by Apple (e.g., "AirDrop," "Retina Display"), makes products instantly understandable.
Palo Alto Networks' M&A playbook defies convention. Instead of integrating an acquisition under existing managers, they often replace their own internal team with the acquired leaders. The logic is that the acquired team won in the market with fewer resources, making them better equipped to lead that strategy forward.
Don't force your sales team to learn and sell a completely new product. Instead, integrate the new capability into an existing, successful product, making it "first" or "default" for that channel. This reduces sales friction and complexity, leveraging established momentum for adoption.
A "takeaway sale" replaces an existing competitor (their toilet paper vs. yours), while a "demand gen sale" introduces a new category (a bidet). This distinction is critical because in takeaway sales, prospects already have a solution, so a pitch about your product's features is not inherently valuable.
Palo Alto Networks pursued cloud cybersecurity when experts claimed no one would trust it. Founder Nir Zook saw this skepticism not as a warning, but as a sign of a wide-open market with a significant competitive moat if they could prove the doubters wrong.
To fund its pivot to the cloud via acquisitions, Palo Alto Networks did not lower financial guidance. They absorbed the OPEX and dilution into their existing plan. This risky move forced go-to-market excellence and signaled immense confidence and discipline to the public markets.
Many 'category creation' efforts fail because they just rename an existing solution. True category creation happens when customers perceive the product as fundamentally different from all alternatives, even without an official name for it. The customer's mental bucketing is the only one that matters.