The Transaction

By the way, Kevin, how many total books have you written?

Ten.

That's the same number as I've read.

Wow, look at this guy.

Man, he's like...

You know, when I hang out with you, I do feel smarter, because I'm like hanging out with a New York author, you know, like just soulful, kind of like, I just feel, you know, Kevin comes to our events, I'm like, ah, this is my guy, Kevin, maybe.

It's like, it's the coolest thing.

Matt's looking at me like I'm weird.

Why is he weird?

No, because I feel dumber, right?

Because like when I'm in the presence of like actual greatness, I'm like, oh God, I'm so mean.

Oh God, we're like over the top here already, you guys.

From ABM to PLG, from Meddic to Meddpicc, the world of business is constantly evolving.

We'll cover the who, what, where, when, why, and most importantly, how you get The Transaction.

I'm Matt Amundson, and he's Craig Rosenberg.

Let's get started.

I'm just gonna start with this.

Kevin is the author of Play Bigger, which is like one of the most iconic sort of go-to-market books written in B2B.

And I can't say enough, like, you know, that it came out, I read it, then everyone read it, and you had to have read it, and it still has such legs.

That's the thing that's so amazing, Kevin.

It's like, when I think about it, I can still refer people to it.

I can still refer to it.

And that's something I don't know in the history of like, you see a lot of sort of B2B books or even sales marketing books that don't have the legs.

Like what, Ogilvy on advertising?

It's like the one with the big slugs or something.

I mean, like, it's really hard, you know?

It's like, if you go through Amazon, you try to find stuff that was written 15 years ago, you know, it's kind of, it's not around anymore.

And this had real legs.

And so Kevin was the author of this book.

He has a firm, he works with Category Design Advisors and spends a lot of his time writing books, including fiction books, am I allowed to say?

You are.

And working with folks on this idea of Category Design, which was for Matt and I, we brought Kevin and his team in to Scale Venture Partners, where I work.

I mean, it was just amazing experience, even for us, the folks that sponsored it.

And so today I'm just really excited to have Kevin Maney on here today and to talk about Category Design and wherever the conversation takes us.

And so, Kevin, thanks so much for coming on The Transaction.

We really appreciate it.

Yeah, very cool.

It's great, glad to be here.

All right, so, Kevin, let's get into business.

And then as you can see, we get distracted on a variety of other topics, but.

That's more fun, but go ahead.

I know it is more fun.

So the way we like to start the show is the way we will start with you, which is, what is something that today's B2B market thinks that they are doing correctly, or is the truism, or is a way of doing things, where actually they're wrong?

And there's a different point of view that they should be taking on.

What would that be and what should they do about it?

I'm gonna throw it to you, and then we'll see where we go from there.

Yeah, Craig, well, the big one to me is, if you go on 90%, maybe 95% of tech company websites, what you will first see is a lot about, here's what our product does.

And that is absolutely ass-backwards, because what I want to know is, why does it matter that you exist?

And what problem are you gonna solve for me?

And if you're first foot forward is, here's what my product does, you're leaving it to me to try to figure out, well, why does this matter to me?

Or what's this going to do for me?

And we often work with companies, is how could we turn that around and hit people over the head first with, what the problem is you're gonna solve for me?

Why does it matter that you exist in the world?

Because maybe there's like 100 other people that do this, what's special about you?

And now, okay, now I'm interested enough for you to tell me the details about your product.

And I think that is one of the most common mistakes that I see across the tech world.

You know, I'm gonna say something, and I'll have both of you guys react to that.

So one is, well, first, let me get in there and see what your opinion on this.

Kevin, this has kind of always been a problem in tech, because you used to have to try to figure out what people did when you were writing about it.

Always, always, always.

Okay.

But it does seem like, and here's where I'll get you guys' reaction, it does seem like now, okay, where I'll just set the scenario here, the world of tech is, there's a lot of tech, right?

Today, as Esteban said on our show, four guys in an apartment in Brooklyn with an idea can go create a million-dollar SaaS company in weeks.

So you've got all our venture, yeah, well, come on, if I can't be hyperbolic, how can I set an apocalyptic scenario without some hyperbole?

But you've got, so we've got all the venture money we have, by the way, AI is just bringing folks to the table, right?

We've got all the incumbents, and we've got a lot of information out there outside of the vendors, right?

And then we've got, anybody can create a sasquip, so you've got a lot of different sort of pieces of the world that is really hard to figure out who's who, what's what.

And then if I took it down a second layer, is so you compete with the whole world of someone could buy something on the technology side, then you're even in your category, which we'll have to talk about, in a second, you've got your direct competitors and sort of that second layer.

So if you took sales tech and you're in sales engagement, you have them, but then you have everything in sales tech, then you have everything in sales.

So the world, it's very hard for the buyer to figure out who's who, what's what.

So with that scenario though, what Kevin just described, which has been a problem for a long time, is today even more, is the imperative is heightened to a five alarm fire that what Kevin just described is absolutely what you have to be doing today in order to differentiate from a very crowded world.

Okay, go, react.

Me or Matt?

Well, Matt was saying yeah, but same works.

Yeah, I agree with you.

It's really challenging, especially when you see companies that are sort of huddled in either the same category or sort of tangentially they're in the same category and they appeal to the same buyer, but maybe they grow up at the same time and they're sort of like loose partners with one another.

One thing that you see pretty frequently, and you could say like maybe early sales tech where it was like could you truly differentiate between Zoom Info, SalesLoft and Outreach?

And one's a data company and the other two are workflow businesses.

You couldn't because it was all about, hey, we're gonna help you grow your pipeline through better prospecting.

It's like, okay, but you guys don't do the same thing at all and I shouldn't really think of Zoom Info and SalesLoft as competitors, but the messaging was so similar, even though one was a data company and one was a workflow company.

So I think this has always been a problem.

It's usually a problem when you see companies that are clustered around a single buyer who came up at a similar time because design sensibility of website, messaging sensibility tend to operate almost like the way fashion goes in and out.

We're gonna use active voice, we're gonna use passive voice, we're gonna use these design cues, we're gonna build a website in dark mode, we're gonna show curl commands, or we're gonna have people.

So like the way that people show their product, message their product often operates in fads.

And so as a result, it's very, very confusing for the buyer.

I'm personally very curious to hear how Kevin thinks about getting around this.

I think because everybody's intention is, hey, I wanna create a website that's really clear.

I wanna create a website where my buyer can come and understand the value of the product that we sell.

But I also think about differentiating it by explaining how it's different.

And so there's this tightrope that you walk along as a marketer where you're thinking, well, I've got to explain what we do and people need to understand why this is so cool.

But I also need to explain why we exist and why they should care.

How do you think about sort of navigating those two competing priorities?

Yeah, and as you're hitting on, it's certainly not just about the website, it's about every message you put out into the world, right?

But this is why, like the scenario Craig was describing too, why it's become so essential to be able to describe to the person you're addressing the unique problem that you solve that nobody else solves.

Because if you can tell me, so I'm a VP of sales, and as you pointed out, Matt, there's like six zillion companies coming at me with, I got this tech or this tech or whatever.

But if you can convince me that all of those other things are not solving this one problem that I've got, in fact, sometimes all those other things are creating a problem that I don't even quite realize until you explain it to me why they're creating this new problem that is just like sitting there waiting to be solved.

But if you could convince me that I have a problem, nothing else is solving it, and damn, if you're right, if I could fix that, I never thought I could, but if I could fix that, I'm interested.

That's where you have them so that you can then tell them, here's what my product does.

But if the buyers understand that first, they're just going to lump you in, as you said, with all these other ones and say, I don't know, I got to sort this out.

What's this one going to do for me?

Do I have to put four things together to solve this problem, whatever?

So as we often tell companies, or we work with, or just companies we speak to, or whatever, is that you really have to think of everything you do from the outside in.

Is first look out at the buyers in the market and understand what the unique problem is to be solved, why nobody else is solving it, why the others are even making the problem worse, perhaps, and find a way to describe that so that you've got the hook in my mouth first before you go and try to reel me into the boat.

When you go in and work with folks to sort of, so it sounds like, I know we sort of gravitated to the website.

It was a good reminder that we're talking about the overall.

I mean, this is a company-wide point.

Yeah, right.

Yeah, we know that, Kevin, don't worry.

But we just sort of, you know, Matt was pivoting off me where I got us into a really tactical place.

Which by the way, Craig, you know, we say company-wide and messaging, whatever.

I mean, it's even things like job descriptions.

Like if you as a company want to lure the right talent, that's really going to understand what you're trying to do and why you matter in the world.

You know, this same kind of language should be in the job description you put out.

You know, every kind of message, every way you talk to the world should be that way.

But anyway, sorry to interrupt.

No, that's perfect.

Yeah, I mean, that's what I'm trying to think about here.

So like, you know, if I'm going to go in and exactly, so one thing that I've learned from, you know, Kevin and Mike Damphouse, who he works with, is like, this starts at the CEO level, right?

And then, and we, so you're taught, you know, you're working with a CEO, or a CEO needs to do this for themselves, are they, so we first sort of figure out what's changed in the landscape, I'm just going for this and seeing what you say, what gaps have been created or problems have been created from these landscape changes, and then how do we solve it?

That's the thing I've learned from you and I've taken and stolen and done everything.

But is that, so let's just take that methodology.

That's where we start, is that fair?

Or is there other elements that we need to think about?

Or like, if I did one thing, would that be sort of one of the game changers that would at least lead us in the right direction to start thinking about how we build our company in the right way?

Or how should I figure it out?

Yeah, we've found that that's a really powerful first layer tool.

We actually presented as an equation, which we present as context plus missing plus innovation equals a new category.

So, and you just described that just using different words, but context is how the landscape has changed, what technologies are out there, what new technologies are arising like generative AI that can maybe make it possible to solve a problem in a brand new way.

You know, even what's going on in the world, COVID pandemic completely changed the nature of supply chains or where we work.

All these things might be part of the context around the audience you're trying to address.

And you need to understand that first, because if you understand, if you really understand what that context is and how it's changing, and by the way, the greater the context changes, the more opportunities there are for new products and services to go into that, because it's creating new problems or new ways to solve old problems.

So if you really understand that context around your target buyer, target audience, that really helps you see the next piece of that equation, which is what's missing.

What's the new problem to be solved, or the problem that everything is creating, or the problem that the new context of technology allows you to solve in a completely different and better way than ever existed before?

So if you can understand that context and use that understanding to see what is truly missing, so you're not like a me too, and not going in and offering like, well, we can do this 10% better than somebody else.

That's boring.

And if you understand those two things, then the next logical step is, what's the innovation we can create to solve this missing in this new context?

And if you see all of those things, basically now you've seen a new market category that doesn't exist yet, and is waiting there for you to create.

And that's a great thinking tool that we found works really well.

And every company should put that up on a whiteboard and try to have that discussion.

Yeah, see, I led you down that path because then you said category, so we're gonna go into category.

But what I've always loved about that formula is, because I'm too afraid to propose a category, Kevin, as you can imagine, because it's so hard.

That's why you do what you do.

But that exercise is so powerful.

So that's, I sort of, I didn't mean to lead you there, but that's why I like, I just love that as like, housekeeping is a terrible word because it's really strategic, but as an exercise that everyone should do.

Okay, so you said category, so let's make sure we set the table.

Like what is category, what is a category, what is category design?

And then let's dive into that.

Yeah, sure, okay.

Well, you know, Gartner Analyst or you guys, whatever, think of a category as, it's a market category that sits out there somewhere.

And I think of it a little differently.

I think of a category as a space in people's heads.

That's really what it is, right?

And if that space in people's heads, in people's minds, maybe is a better word, if people's minds doesn't exist, then your message, your product, whatever, doesn't really have any place to go.

And so what we talk about is that you need to create that space in people's minds in order to have a place for your message and your product to go.

I'll give you, to walk through a quick example, is electric cars.

So if we were gonna have, any of us were gonna sit down with our families 15 years ago and have a conversation about what kind of car to buy, we would all be talking about gas-powered cars.

Electric car would probably never enter the conversation because the space in our heads that said electric car is an option just didn't exist.

So now you fast forward, Tesla basically pried that space open in our minds and set in our minds what an electric car should be like.

And it's got the fancy panels and software driven and all the stuff that Tesla is.

So created not only a space in our minds, but an expectation of what this thing should be like.

And because Tesla opened that space and set those expectations, it actually created a category that others can move into.

So now Ford, GM, Volkswagen, whatever, they can build electric cars and now the audience is going to know what you're talking about.

Interestingly, Ford, GM and everybody else, if they're going to build an electric car, now they better build it to the expectation that Tesla set, which is an interesting little dynamic because if you're the company that can do that, it puts you in a real power position for a long time because you're setting the rules for what this industry is going to be like.

And so if you think of it that way, then your job, if you are creating a unique product that doesn't exist yet and you want brand new innovation that people aren't aware of, your first job actually is to go and open that space in people's minds.

Because then if you can do that, then there's a way to accept what you're going to talk about that the world needs.

And that's the way I think about a category.

It's such a great example, too, because it's one that everybody can understand.

I know.

I was like, every time I talk to a cat, I get it.

I get it.

But yeah, go ahead.

Yeah, you know, so the next step of that is, if you're a CEO of a company, how can you exploit that?

I mean, that should be the next thing you ask, right?

How can I be the one that not only opens that space in people's minds, but sets those expectations and sets the rules?

Because if I do that, I'm in a power position.

Another interesting example of that is, you know, if you go back to Uber's first presentation, which is available online, you can go see the presentation they made to investors.

We'll put it in the share notes.

Sorry, I just got the chance to say share notes.

Go ahead.

And in that presentation, they showed that app with a little map on it, where the car is going around and you see all the cars, whatever.

Now, if you think about it, if you were setting up a company to do like a ride sharing app or whatever, you know, before Uber ever existed, you could have done it a hundred different ways.

It didn't have to be the way that Uber did it, right?

But Uber did it that way and then, you know, blew up in the public's minds.

And so Uber was able to set that expectation of what ride sharing or on-demand transportation is going to look like and how it's going to look and feel on the app.

And if you go to anywhere in the world and, you know, you go to Singapore or you go to India or whatever, there's different companies that exist that do, you know, the same kind of thing that Uber does.

But all their damn apps look exactly like Uber's.

They all have some feature that looks basically like that whole operates that way.

That's an example of a company that went and set the rules and set that expectation so powerfully that everybody else in the world is going to do that, has to follow that expectation.

Which for, again, always puts Uber in this power position because, you know, basically we're the rule setters now.

And if we want to change the rules, everybody else better change the rules too.

Yeah, that, again, another perfect example.

The thing I'm thinking about is the map thing.

Do I even look at that anymore?

Oh, yeah, I do.

I want to know if the driver is close.

Yeah.

Yeah.

Where you're supposed to be standing when they arrive.

Yeah, that I'm bad at.

These dudes have to call me all the time and figure that out.

Yeah.

I was in Denver last two weeks ago and it was like, I came down from the building and it was like, no, you got to be in this.

You got to be three blocks over here.

So as you think about, I have a bunch of questions here, but I think maybe I'd start here because I work with a lot of founders, as you know, startups.

And what's the trigger?

Should you be thinking about, I guess you should be thinking about this when you found a company, right?

Or is there another way to be thinking about when?

Or is the most important thing to define sort of that matrix we talked about before on context?

And when should I do this and start to position myself for a new category?

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Well, first of all, I would think you'd want to stop thinking about this from day one or before day one.

I mean, this would be a way, if you're sitting there and trying to create your company from scratch, I would want to tell you to go through this exercise and help you see what you should be doing from day one.

But it also becomes something that is worth, it's worth doing any time, we've grown into a number of companies who that were maybe three to five years old, for instance.

And they were founded to do something and they did it pretty well.

And now we're looking at it and go, well, we've done this thing.

And we know there's more that we could work some places we could take this.

But there's like five different opinions on what that could be.

And we're having a hard time getting our hands around it.

That can be a great time to do it.

We've also worked with companies that are 30 years old and getting a little tired in what they've been doing.

And understand that fundamentally they have like all this great technology and a good reputation, but they just don't know where to go next to refresh themselves or what they do.

That can be a great...

So I think this is valuable at any point in a company's lifespan.

And it's probably valuable to do over and over and over again to go through this exercise, constantly be relooking at this.

And because again, going back to what we just talked about, that context is always changing.

Yeah, yeah, because I think if you use that same rubric to think about what is the context, what is the change, what gaps have this established, you need to be revisiting that pretty frequently, at the very least on an annualized basis, to say, okay, are these things that we believed when we started this company or when we created this category still true?

And if they're not, what's changed?

And is that a new place for us to either expand or create a new category or can we utilize what we have today to exploit that new gap?

We had one company we worked with that their whole business was based on serving companies, employees in an office, basically.

This was a few years before the pandemic.

The pandemic hits, completely changes the dynamic of who's going to be in an office, what an office is, what a corporate culture even is, because you're not physically in the same spaces.

That massive change in context forced them, and we helped them do it, to sit down again five years after the first one and say, this is an enormous change in context, it's going to have a huge impact on your business, but is there new opportunities that this creates, a new way to present what you do, or whatever?

And so, yes, just doing it on a regular schedule is one thing, but also recognizing that there are moments in time that the context around your particular customer or audience is changing dramatically, and that's a great time to do it.

Yeah, Matt, you know, I do think about, you know, Matt's a startup CMO, you know, and so like...

Thanks for the pitch.

In the game?

Does that mean his first startup when he was seven?

Amongst the many things that Matt is really good at, it is a unique ability to CMO early stage.

It is.

It is a skill set, right, like there is a skill set for I am going to take a company public or I am going to, you know, take it from a billion to two billion.

But, you know, it does seem like your world, the context is changing every three months.

It is very frequent.

It is very frequent.

So you take Kevin's thing, it is like right now with tech, I mean, like there are certain situations where you got to monitor the context on a semi-regular basis, right?

Yeah.

Yeah.

And, you know, for us, we work with some great partners who are, you know, real innovators in the space who, you know, kind of drive a lot of the changes that happen.

And so, you know, for our business, we have to stay in touch with the snowflakes and the Databricks and the Amazons of the world as they're thinking about things differently.

So how do we get ahead of that?

And we prepare our product for the things that they're going to change.

Yeah, because in this world and in many worlds, if you don't know that the context is going to change before it actually changes, you can be pretty far behind.

Yeah.

So, Kevin, and then the one question I used to get, my new world now I rarely get.

But if there's an existing, well, so like, is there if there's an existing category, I'll just use one, guys, that like I'm not saying there's disruptors here, but just CRM.

And you're a new newish company or you have a newish idea that would disrupt that category.

What do you do there?

Do you create a new one or do you redefine it or like, I guess it depends.

But like, give us some situations you've seen there and what like how you recommend attacking that or.

You know, maybe the CRM category is challenging, so if you want to use a different example.

Yeah, sorry.

Thanks, Matt.

Believe it or not, I agree with Matt, even though I'm the one who said it.

Good.

No, CRM isn't actually isn't a bad category to talk about.

But let me let me talk about it generally and then we could come back to CRM.

So there are two different situations.

And again, if you want to put something, what would you call your notes?

Your your work that you want to leave it on the side here.

I got I got one for you is a so a book called The Evolution of New Markets, which is by an economist named Paul Grosky, GER.

OSKI.

Show notes, there you go.

And by the way, I would recommend this to every interpreter, venture capitalists.

It's a really interesting insight into how market categories evolve over time.

And of course, you know, so he's an economist.

He used a lot of data to understand categories and create, you know, kind of a pattern of what happens.

And and of course, it's a general pattern.

And, you know, there's going to be deviations depending on what's going on.

But just generally speaking, this explains a lot.

So I'm going to try to explain this without being able to do a right boardy thing.

There are two trajectories that happen in a category.

So on day one, somebody invents something.

We'll say that creates a new market category, something that didn't exist before.

And if that thing is something that the world really needs, that really should exist in the world, others are going to quickly recognize that.

And very soon there's going to be a bunch of competitors and this sort of hockey-sticky thing is going to happen.

A bunch of competitors are going to dive in, probably all using some different version of the design.

They might all look and feel differently, but you're going to see this rise in number of competitors.

In fact, by the way, if you start a company and that doesn't happen, it probably means you started something that doesn't really matter.

Because if it mattered, others would want to be in there too.

And so you see this line go up and a bunch of competitors all come in.

And there's this point in time that Goransky identified and he calls it the moment that dominant design gets chosen.

And that's the moment when, because the world really doesn't like a whole lot of choices about things that are all different and who knows which one's going to still be around in two years.

And if I learn this one and it doesn't work really well, I got to learn a completely different design.

The market wants a dominant design.

And so after a number of years of all these competitors beating each other up, a dominant design is going to get chosen.

When that gets chosen, all those other designs mostly fall away.

And the number of companies in the space falls away until you get only a handful of companies, usually cluster around the dominant design, still in existence.

At the same time as that's happening, there's another graph that he, a line that he adds to it, which is the total value of that category.

So as that, before the dominant design, as all these companies are piling in, the value of that category stays pretty flat.

That's the era of the early adopters.

That's all the people that are kind of kicking the tires thinking this is a little bit interesting, but the broader market is not yet bought into this thing.

And when the dominant design gets chosen, at the same time as all those other designs fall away, that also is when the rest of the market goes, all right, this is safe.

This works.

This is not going to go away.

And that's when you see the hockey stick go the other way of the value of the market go up.

So they cross, right?

The number of competitors goes down, the value of the market goes up, and you end up with a handful of companies capturing this great amount of value.

So that's the Gorski curve, he calls it.

Now, what does that tell us about your question?

So it tells us two things.

One is that if you look at all what's going on around the context around the company you're starting, and you realize that there isn't a dominant design yet, and there's all these companies fighting it out, and maybe the category is already five years old, but it's still chaotic, and you're coming in for the first time, you do have a chance to create the dominant design.

You have to go barrel in there and blow everybody else's minds away, but you have a chance to create the dominant design.

By the way, a great way to see this is what happened with smartphones, because for years and years, there were five, six different operating systems and all these form factors, you have blackberries with little chiclet keys and everything else.

Apple comes in late and shows us the iPhone, and everybody goes, oh yeah, that's the dominant design, that's what these things look at.

Pretty quickly, everything else falls away.

So if you come in at that point, but if you come into a space, if you're looking at a category, you come in and you go, you know what, the dominant design is chosen, it's done.

If you come in at that point, all you're ever going to be able to do is make an argument that ours is a little bit better and maybe we can scrape some market share away from these other guys.

That's a classic like me too company, usually not all that interesting.

Yeah.

So if you're looking at the context and you realize that you thought you were going to head into the space that your dominant design has been chosen and the game's kind of already over, that's when you really have to kind of say, well, I don't want to be in that category.

I need to find something.

Maybe it's a niche of that category or an adjacent category or something that seems new and maybe makes that category seem old, but you've got to get yourself out of there.

So the CRM question is, long ago and far away, there was a company called Sievil that completely dominated that era of CRM.

It was this on-premise software that created design and had won that category.

And if somebody else would come into it, it's not really going to be effective.

Salesforce comes along and basically says, that's the whole no software thing that came into the market with its way to make the argument that that other category, the Siebel one, that should now be put out the pasture because it's too hard to maintain, it's too hard to install, get people to trade on.

And if the updates are really a painful thing, now we got this new thing called the cloud.

We can operate a CRM system for you.

You pay for it by subscription.

You don't have to do all this installation stuff, blah, blah, blah.

And so Salesforce came in and made an argument that we're not going to Siebel's category competing against them.

We're creating something entirely different, a new category of cloud-based CRM or whatever you want to call it.

So that would be the way to think about...

That's a long answer to your question.

Yeah.

You know who I was thinking about.

So you've got these categories that were created, and in many cases, the premise software guys started it.

Then we had a secondary disruption of said categories with SaaS, right?

Right.

And then in all likelihood, we'll have a third with AI, you know, no code and all these things, right?

Yeah, because you think about like service now disrupted paragraph, right?

I mean, there was others in the space, but just go with me on this.

Yes.

But Kevin, didn't they redefine ITSM?

So the category was ITSM.

They didn't.

It wasn't.

And so but what you said when you described CRM, you said cloud based, right?

But is that a redefinition of a category with a new design model, right?

A predominant design model, or is that a new category?

I know that's small.

It's like a nuance, but like it is, it does seem like they were able to, and I think it's better this way because what you said is right, which is the category creates a space in their mind.

They know by looking at the category, I have this problem and this is the type of thing that's, you are on the, I forget what you guys are, the grocery store shelf.

But now, so things have been around for 10, 15 years, but now a completely new design takes over.

It's the same category or redefined.

No?

Yeah, I would call it, Yeah, well, we're probably all quibbling over semantics, but basically, yes, they, you know, but what Salesforce had, so the Salesforce example still is, you know, when Salesforce came out, cloud computing was still a bit of an iffy prospect, right, for corporations didn't really want to put their stuff in the cloud at that point.

And so Salesforce's job, and Benioff was great at this.

I mean, it was the no software thing.

It was just all their messaging.

You had some of the crazy stunts that they pulled to try to, you know, a mock protest that they organized in San Francisco with people marching down the street with no software signs.

But all their messaging was around this idea of saying, that old way you did CRM, we need to open up a new space in your minds that says there's this other space for doing this in the cloud in a completely different way.

And even though it's still doing the same thing, it's doing it in a completely different way.

It's not solving the CRM problem, it's actually solving the on-premise software problem.

Which is why the no software thing was all about defining the problem as having the CRM software on-premise and having to maintain it, rather than we're going to do something different with CRM.

Gotcha.

Gotcha.

Makes total sense.

The thing is, the conversation, when I bring up Play Bigger and I talk to folks, there's these devotees who are like, well, I have to create a new category.

They're not winning in the one that they're in.

And they say, well, I got to create a new category.

That's hard.

It is hard.

And one of the things I would always say, I mean, every company can't create a new category.

I mean, that's not going to be, that's not real reality.

And there's thousands of millions, I don't know, God knows how many companies that exist in the world that there are perfectly good investments in companies and spinoff, decent returns that are in somebody else's category and grab 10% of the market or something like that.

And, you know, there's no shame in that, but the outside successes, the outlier successes, the things that, you know, that we all remember and, you know, the companies that make people passionate and what people want to be a part of, those are the companies that manage to create a category that really matters and has an impact on the world.

And so it's a matter of, you know, if that's your goal, if you want to be one of those companies, which, you know, of course, a lot of people who start a company want to be one of those companies, but, you know, it is hard.

It's an uphill battle.

You are trying to create a space of people's minds.

It doesn't exist.

That's hard.

And it takes years.

There's a few categories that get created overnight.

I mean, it's something that you have to hammer at for six, seven, ten years before it really takes hold.

Sorry, I love that.

I had to check my.

Yeah, well, I guess I don't know if you guys heard my little thing.

But so what's another.

So I just love these stories.

I've known about you, Matt.

I mean, yeah, I know.

And you're just like, oh, man, little old me.

We're talking about Uber and the iPhone and whatnot.

But do you have any stories where the category design was a double versus a quadruple grand slam?

And how did that come about and what, you know, how did they get there?

And what did that look like?

Just so I can have more realist.

Look, the tenets of the story are the most important thing.

And I get it.

I love them.

But like, you know, like something from a tech perspective that doesn't become the next Uber but was a winning strategy for them to do going through this process.

Any thoughts on that?

Like what that looks like or is that a dumb question?

Matt will tell me if it's a dumb question.

I don't think it's a dumb question, but I think maybe poorly worded.

Which is not every company can create a category, but every company can benefit from the idea of category creation.

Yes, bringing that into the way that they message and that can truly set them apart from maybe the other players that exist in that category.

So like, you know, let's say you already exist in a category, you know, one that maybe has lots and lots of players.

Like, how do you start to incorporate that to either create a niche within that category that feels like, yeah, I still want to play in the CRM space, but I want to play over here, right?

Like example of that might be Viva, who did that beautifully, right?

Like they built this incredible company that never really competed with Salesforce is a CRM and completely dominates the health care space.

Which, you know, I mean, and again, there's like a lot of like, because we're talking about sort of intangible concepts, right?

And so, you know, the semantics of that, maybe you could argue that they, they actually created a, you know, their own niche category within CRM, you know, for health care.

And, you know, and now, I mean, that's, you know, that may be one way to think of it, too.

But I absolutely agree with you, Matt, that every company, no matter what you're doing, can benefit from thinking this way, even if it's just about the way they message things to the world.

Because if there are like 10 companies you're competing with, just to go way back to the beginning of this conversation, and they're, all of them are, their foot forward is like, let me tell you what our product does.

And you're the 10th competitor to come into that space, but you're smarter about the way you message it and are saying, let me describe the problem that you have.

And then I'll tell you why we can fix it.

That way of thinking alone would probably be beneficial to any company in any space.

And Craig, to go back to one of your questions, and it sort of hits on the same thing that Matt's talking about, of just having this kind of thinking inside the organization.

We did, I know this is a long time ago now, eight years ago, seven years ago, we did a project for a company that's been quite successful called Big Panda.

And at the time, it was just, you know, it was very, very data centric, data center oriented, what we worked on them with, came up with.

And they ran with a category that we created for maybe a year or so, something like that.

And then if you look at their website or look at what they do, it's way beyond what we ever worked with them on.

You know, the messaging and whatever that we would have done with them is completely gone.

But we do know that they've ingested that sort of way of thinking.

And as they've developed over time, it has helped them to constantly create the new products and categories and messages and whatever that they've managed to do.

Even though they're far away from the original work we did at this point, it seems to have helped them be a tremendous success.

And I do believe that that's just...

It's kind of like having a new muscle inside the corporation or inside the business.

First of all, I just want to thank you for going back to my question.

That's the kind of validation that I'd like to have given.

You're welcome.

Yeah, no problem.

Great question.

Really well-worded, Craig.

Thank you.

Actually, Matt, it was.

I got an example.

I mean, give me some credit.

Well, we can talk about your question later.

It's very similar to the one in the front.

But, you know, hey...

But, Kevin, so this has been really helpful.

And actually, I can pull this theme out on this way of thinking.

One thing I wanted to sort of dig in on is, you know, you guys do like a narrative, right, as part of the process you go with people.

I'm just wondering if we can talk about that for a minute.

Does everything sort of...

Do you want to sort of culminate all of your activities into a story?

Is that kind of the idea of like, as you're thinking about category design or just the healthy way of approaching running your company as we've been talking about this whole hour?

But I remember you guys read me a story.

I won't say the company because I'm not allowed to do it.

I was with another analyst from Gartner.

And we're not allowed to talk.

We're not allowed to do anything.

We're just listening.

And we were like crying.

I'm not kidding.

Tears.

It was so good.

Yeah, it was this incredibly well-worded.

Obviously, Kevin did it.

No offense, Mike.

But it had all the elements you're talking about.

It was this brave new world and leaving these gaps.

And it was our world because it was in sales.

We were like, my guy, he's like, what do you think?

And we were quiet.

We're just like, well, dude, that was amazing.

Just tell me about that exercise and what that means and how that translated to a company that's just trying to think the way we're talking about today.

Is it important or is it something later stage?

I don't know, but it was just so amazing.

I didn't want to bring it up.

Well, thank you, Greg, first of all.

There are lots of ways to communicate what you want to say, but it's just human nature.

These stories are probably the most powerful way you can communicate something.

That's why we focus on crafting a story that captures the category strategy.

There's a bit of a formula to it.

I mean, it really is.

The first part of the story is let's talk about the problem and describe why you have it and what the pain is that you feel because of it and why nothing else is solving it.

And let's really make you feel that first.

And then once we describe that, then we can say, you're ready for us to say, but there's a new way to solve that.

Here is this thing that we do.

And then you can lay out more about here's how it works.

And if it works this way, here's what the world looks like when you solve that problem and what your world looks like.

And actually, we leave to the very end.

All of that has no branding in it whatsoever.

It's all just about what's something that should exist in the world, basically.

This problem that does exist and the solution that should exist, no matter who does it.

And if that's all true, then we've described something that matters.

And then that very last piece of this story is, and let us tell you why we're uniquely positioned to bring this to you.

And that only needs to be a short bit that just says, here's who we are, maybe a little, we've got a history of doing this, whatever, and then put a little branding spin at the end.

That's the way we construct the story.

Now, there may be other great ways to construct a story, but I think the larger point is that capturing a strategy in a story format is a great way to communicate it to the rest of the company, to the partners that you want to have, and ultimately to the market.

Thanks for joining us for another episode of The Transaction.

Craig and I really appreciate the fact that you've listened all the way to the end.

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