Is Category Creation Worth It for Your Startup?

Is Category Creation Worth It for Your Startup?

For almost everyone, no. Category creation is a strategy sold on the outcomes of the few companies it worked for, and the buyer research points the other way. Most B2B buyers form a shortlist early, from names they already recognise, inside a category they already understand. A new category has to fight all three of those facts.

This is an opinion and we will argue it with evidence rather than assert it. We build the sites and content engines that category plays run on, so we have watched several of them up close, including ones that worked.

Here is what the data supports, where category creation genuinely is the right call, and what we would do with the money otherwise.

What Does Category Creation Actually Require?

Teaching the market a new word before you can sell them anything. Not positioning your product differently within a known category. Convincing buyers, analysts, competitors and eventually procurement that a new type of thing exists, that they have a problem it solves, and that you are the best example of it.

That is three sales in sequence rather than one. The category has to be real to the buyer before your product can be the answer, and you have to fund the first two sales without revenue from the third.

The strategy also assumes you win the category you created. You frequently do not. Creating a category can amount to running an education campaign that a better funded competitor converts, having let you pay for the market awareness.

What Does the Buyer Data Say About New Categories?

That shortlists form early and from memory. The 6sense B2B Buyer Experience Report for 2025 found that ninety five percent of the time, the winning vendor is already on the day one shortlist, and that four out of five deals are won by the vendor the buyer preferred before engaging any seller.

Think about what that means for a new category. If the shortlist exists on day one, the question is whether you were in the buyer's head before the process started. A buyer who has never heard of your category cannot have put you on a list, because they were not looking for that kind of thing.

The comparison behaviour reinforces it. 6sense reports buyers evaluating 5.1 vendors on average, with buying groups averaging more than ten members on deals averaging 250,000 dollars. Buyers compare. A category of one gives ten people nothing to compare against, and committees are not reassured by that.

Why Is the Evidence for Category Creation Weak?

Because it is drawn from winners. The case studies are all companies that succeeded, which tells you what success looked like and nothing about the odds. The companies that spent three years explaining a category nobody adopted do not publish a book about it.

We are also going to decline to quote the market capitalisation statistic that usually appears at this point in the argument. It is repeated constantly, and we could not trace it to a primary source we were able to read this run, so it does not belong in an article that asks you to make an expensive decision.

That is not a claim the underlying research is wrong. It is a statement about what we could verify, and it is the standard we would want applied to advice given to us. A strategy this costly deserves evidence you can check.

What Does It Cost to Teach a Category?

More time than most funding runways allow. John Dawes of the Ehrenberg-Bass Institute set out the 95:5 rule, arguing that up to 95 percent of firms are not in the market for a given product at any one time, reasoning from the observation that companies change major providers around once every five years on average.

Dawes is explicit that this is a heuristic rather than a precise rule, and that it varies by category. But the direction holds, and it is brutal for category creation. You are teaching a new concept to an audience who mostly cannot act on it yet, and who will have forgotten unless you keep teaching until their buying window opens.

Dawes' point about how advertising works is the relevant one here. It builds memory links that get retrieved later. Category creation asks you to build a memory link to a concept and a memory link to your brand simultaneously, and to sustain both for years. That is two campaigns funded as one.

What Happens to Your Search Traffic?

It stops existing, by definition. If you have invented the term, nobody searches for it. Your best keyword has no volume, and every buyer actively looking for a solution is typing the name of the old category you refused to be part of.

This is the practical consequence teams underestimate most, because it removes your cheapest acquisition channel exactly when you need reach. You are choosing to be absent from the search results where in market buyers are, in exchange for owning a term nobody types.

There are ways to work with low volume terms, and they are slower and narrower than category advocates suggest. We set out what is actually possible in our piece on doing SEO with no search volume.

When Is Category Creation Actually Right?

When no existing category can hold your product without misleading the buyer. That is the honest test, and it is rare. If placing yourself in the nearest category causes buyers to expect the wrong thing, evaluate you on the wrong criteria and reject you for failing at a job you never claimed, you have a genuine problem that positioning cannot solve.

The second condition is funding. Category creation is a multi year programme, and doing it badly for eighteen months is worse than not doing it, because you arrive at the end with neither category awareness nor a place in the existing one.

The third is that you must be able to win the category you make. If a larger competitor can adopt your language the moment it starts working, you have run an education campaign on their behalf. Ask what stops that before you commit.

What Should Most Companies Do Instead?

Be the memorable option in a category buyers already search for. This is less glamorous and considerably more likely to work. You get existing demand, existing search volume, existing comparison behaviour, and a buying committee that understands what you are.

Then differentiate hard within it. A sharp claim about who you are best for, in a category people already understand, is the cheapest competitive advantage available and the one most companies skip in favour of vaguer language. Our guide to B2B SaaS positioning covers how to get to that claim.

Lean into the comparison rather than avoiding it. Given buyers evaluate around five vendors, being the one that explains the trade offs honestly is a real advantage, which is why we recommend building those pages deliberately in our piece on competitor comparison pages.

How Do You Know If You Have Already Failed?

Three signals, all observable within a year. Your own sales team explains you using the old category name on calls. Nobody outside your company uses your term unprompted, including customers who love you. And buyers keep asking which existing thing you are like.

That last question is the clearest. If every discovery call includes somebody asking whether you are basically a version of a known product, the market has already filed you, and continuing to argue costs you the deal rather than the category.

The recoverable move is to accept the existing category publicly while keeping your distinct claim. Companies rarely do this, because it feels like losing. It usually reads to buyers as clarity, and clarity converts.

What Would We Advise?

Assume the answer is no, and make the case for yes properly if you believe it. Write down which existing category you would join, then write down exactly what the buyer would wrongly conclude about you. If that list is short or vague, you have a positioning problem wearing a category creation costume.

If the list is genuinely damning, you may have a real case. Then check the funding and the defensibility questions honestly, because a category play that runs out of money halfway leaves you worse off than never starting.

Either way, do the positioning work first. It is the input to both strategies, it costs a fraction as much, and in our experience it resolves most of these arguments before they need resolving.

If you want a blunt second opinion on whether you have a category or a positioning problem, we are happy to talk it through. Find us at phoenix.studio.