Should You Create a New Category?

Three questions to ask before you define your own space.

DEAR STAGE 2: We’re building a product that doesn’t quite fit into existing categories. We’re thinking about carving out a new one, but is it too early? How do we know if we should make the leap? ~DEBATING CATEGORY CREATION

DEAR DEBATING CATEGORY CREATION: There’s something thrilling about the idea of creating a new category. Founders are builders by nature, and when your product doesn’t fit neatly into an existing box, it’s easy to think: maybe we just need to draw a new one.

I called on Joe Sawyer, CMO at Flashpoint, and Stage 2 LP, to weigh in. Joe has both built successful new categories (e.g., telehealth, online marketplaces) and also repositioned companies to capitalize on existing ones. His take? Early category creation might not always be the power move it seems. Yes, category creators usually end up taking higher profits and a significant share of the market, but getting there is a high-stakes endeavor.

So before you invest in naming the space, shaping the narrative, and educating the market, take the time to reflect and ask yourself these three questions to chart your path forward:

Question 1: Am I Ready for a Long Game?

Category creation is expensive and doesn’t happen overnight, you have to be thinking long term and be willing to go all-in even when there aren’t immediate results. Creating a new category requires deep pockets, long timelines, and a serious appetite for brand and market education.

Joe advises “Category creation is a high-risk, high-reward play. It typically works when you’ve raised a significant round, have a long runway, and can invest in changing how your buyers think. That’s not where most early-stage companies are.”

And even then, it’s not just about having the idea. Analysts have to validate it. Press has to echo it. Buyers need to feel the pain before they buy into your language. That alignment takes time, and lots and lots and lots of repetition (see what I did there 😉).

Question 2: Is There an Existing Category I Can Anchor To?

Instead of trying to create something entirely new, Joe suggests anchoring in an adjacent category, especially one where buyers already have context, expectations, and budget.

Joe notes “You can still differentiate and plant the seeds of something bigger, without fighting to define a whole new space.”

This approach gives buyers a much needed frame of reference. If they don’t understand where your product fits, the burden is on you to explain it, and the risk is that they just walk away. When you anchor to something familiar (even loosely), it’s easier to start the conversation—and close the deal, bypassing one of the biggest risks when you set out to establish a new category.

Question 3: Am I Loud Enough About What’s Broken?

Category creation may be premature, but that doesn’t mean you have to blend in. Joe called out “You don’t need Gartner to name your category. You need your early customers to say, ‘Yes, that’s exactly the problem we’re facing.’”

This is where a strong point of view matters. If you’re solving a problem in a new way, say so. Be loud. Challenge assumptions. Just do it in language your customers already understand.

That approach will do more to create long-term pull than coining a term no one’s ready for…yet. This can be an alternative to category creation, or just the first of many steps on that journey. The right language matters in your messaging and this approach puts your customer at the front and center of deciding how you talk about your solution.

Then, once you’ve got real traction, customer advocates, and the capital to drive a broader narrative, you’ll be in a much stronger position to define the category, not just name it.

Big thanks to Joe Sawyer for keeping it honest, tactical, and founder-focused. Sell outcomes. Speak buyer language. Build momentum. The category will come.

Until next week!