Marketers often mistake strategic positioning (finding a niche) for true category creation. A new category introduces a solution to a problem customers haven't yet articulated, requiring education on why they need a thing they've never bought before.

RJ Scaringe observes that many EV companies failed by creating "Model Y copies." Rivian's strategy is to offer a genuinely different product. He argues that if a customer wants the market leader's product, they'll buy the original, not a slightly different version from a competitor. Success comes from providing true variety.

Truly creating a new category is rare. A more effective strategy is creating a sub-category by anchoring your product to an understood concept, framing it as 'like X, but different in a key way.' For example, Drift was 'live chat, but for sales,' not an entirely new concept.

John Osher didn't try to make a cheaper version of the $80 electric toothbrush. Instead, he positioned the $5 Spinbrush as a superior alternative to the $3 manual toothbrush. This re-framing of the competitive landscape created an entirely new market category.

Facing a market where the "sports car is dead," Koenigsegg's strategy was market creation, not penetration. His approach was to build a car so extreme and superior—to "outdo everyone else"—that it would force people to take notice and generate its own demand. He built something so amazing that customers would find him.

Most companies claiming to create new categories are actually creating sub-categories. They anchor their concept to something familiar, like Drift positioning as "live chat, but for sales" or the first cars being called "horseless carriages." This is more realistic as it doesn't require educating the market from zero.

Instead of inventing a completely new market, position your product as a sub-category of something people already understand (e.g., "like live chat, but for sales"). This "horseless carriage" approach makes innovation digestible by grounding it in a familiar concept, as Drift did.

When fundraising, pitch the creation of a new market category, not just a better product. Investors view incremental improvements as capped opportunities fighting for existing market share. They disproportionately fund 'different' companies that can create, own, and dominate an entirely new market space.

Traditional branding competes to be better in an existing market. Category design is a business discipline that changes how the market defines a problem, creating a new space in customers' minds where your company is the only choice. This makes you irreplaceable, not just an incremental improvement.