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Anthony Kennada- 2019 APPEALIE SaaS Conference Featured Speaker

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The good news is that anyone can participate in category creation—even companies that are in their infancy or are in the early innings of bringing a product to market. While developing a 10x product is an incredible advantage (see Slack, Uber, or Airbnb as examples), it’s not a prerequisite.

The truth is that most entrepreneurs, executives, and marketers don’t set out to create a category from the onset, but rather, see patterns in the journey of planning the business that signal there’s a category to be created.

Here's how category creation works by Gainsight Founding Chief Marketing Officer (CMO), Anthony Kennada.

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Anthony Kennada- 2019 APPEALIE SaaS Conference Featured Speaker

  1. 1. Anthony Kennada Founding CMO at Gainsight
  2. 2. Disclaimers This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with such verbal or written comments, is referred to herein as the “presentation.” This presentation is being provided for informational purposes only. Nothing herein is or should be construed as investment, legal or tax advice, a recommendation of any kind or an offer to sell or a solicitation of an offer to buy any security. This presentation does not purport to be complete on any topic addressed. The information in this presentation is provided to you as of Sept. 26 unless otherwise noted and Battery Ventures does not intend to update the information after its distribution, even in the event the presentation becomes materially inaccurate. Certain information in this presentation has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. Certain logos, tradenames, trademarks and copyrights included in the presentation are strictly for identification and informational purposes only. Such logos, trade names, trademarks and copyrights may be owned by companies or persons not affiliated with Battery Ventures and no claim is made that any such company or person has sponsored or endorsed the use of such logos, trade names, trademarks and copyrights in this presentation. This presentation includes examples of companies in which Battery Ventures has invested. For a complete list of all companies in which Battery Ventures has invested, please visit www.battery.com/our-companies/list. Information regarding the specific performance of prior investment recommendations is available upon request. Past performance is not evidence of future. There can be no assurance that the investment objectives of a Battery Ventures Fund will be achieved or that the investment strategies utilized will be successful. The information contained herein is based solely on the opinions of Anthony Kennada and nothing should be construed as investment advice. The anecdotal examples throughout are intended for an audience of entrepreneurs in their attempt to build new businesses and not recommendations or endorsements of any particular business.
  3. 3. Do you believe there are any original ideas left?
  4. 4. “There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope… but they are the same old pieces of colored glass that have been in use through all the ages.” - Mark Twain
  5. 5. # Movie WW $$$ 1 Avengers: Endgame $2,790.2 2 Avatar $2,789.7 3 Titanic $2,187.5 4 Star Wars: The Force Awakens $2,068.2 5 Avengers: Infinity War $2,048.4 6 Jurassic World $1,671.7 7 Marvel’s The Avengers $1,518.8 8 Furious 7 $1,516.0 9 Avengers: Age of Ultron $1,405.4 10 Black Panther $1,364.9
  6. 6. A business strategy that focuses on positioning and evangelizing a brand new problem observed in the marketplace, in addition to the solution for that very problem.
  7. 7. Gainsight is a current Battery portfolio company.
  8. 8. Customer Support CRM Account Mgmt.
  9. 9. Why create a category?
  10. 10. Companies that were instrumental in creating their categories accounted for 53% of incremental revenue growth and 74% of incremental market capitalization growth than their peer set.
  11. 11. Startups with early leadership in a category benefit from: • More access to funding. • More resources to attract the best talent. • Higher valuation multiple than competitors. • Better chance of winning more market share over time.
  12. 12. a noble strategy that can spark a movement
  13. 13. Is category creation for me?
  14. 14. 1. Little to No Competitors in Your Space 2. Low Search Volume/Cheap(er) Ad Inventory 3. No Press or Media Coverage 4. A Marginalized Buyer No Company is Paying Attention to 5. Small (but Passionate) Niche of People Who “Get It” 6. Larger Population of People Who Don’t “Get It” (Right Away) Signals of Category Creation
  15. 15. 5 Principles to Create (and Dominate) a Category
  16. 16. Live Your Purpose, Values, and Culture Out Loud
  17. 17. The Power of Purpose in Category Creation Purpose informs brand. Purpose attracts, engages, and retains talent. Purpose inspires your community. Purpose grows your business.
  18. 18. How to Define Purpose • Start by Defining the Individual Purpose of the Executive Team • Break Out in Small Groups to Look for the Golden Threads • Develop a People Strategy Informed by Shared Institutional Purpose
  19. 19. Focus on the People in Your Market, Not Just Your Products
  20. 20. Developing a Content Marketing Strategy • Name Your Category • Identify Spokespeople, Writers, and Contributors • Articulate the “Why” • Educate on the “How” • Evangelize
  21. 21. Create a Lifestyle Brand for Your Category
  22. 22. Lifestyle Brand A company that markets its products or services to embody the interests, attitudes, and opinions of a group or a culture. Lifestyle brands seek to inspire, guide, and motivate people, with the goal of their products contributing to the definition of the consumer’s way of life.
  23. 23. Complement traditional content with premium content Digital Media •Video •Virtual Events •Podcasts Education and Career Services Industry Certification Online Job Board
  24. 24. Grow a Community by Doubling Down on Live Events & Experiences
  25. 25. Creating a category can be a lonely journey for early adopters.
  26. 26. How to Plan an Industry Event 1. Make It About the Movement, Not Your Product 2. Source Speakers Who Add Credibility and Validate the Category 3. Build an Agenda That Inspires and Educates 4. Create a Memorable Experience That Puts Your Culture on Display 5. Use Pricing Tactics and Team Activations to Drive Registrations 6. Monetize by Adding Value to the Prospect Experience 7. Measure Your Success
  27. 27. Activate Customers as Brand Ambassadors
  28. 28. How Do Customers Create Categories? • Customers Validate the Pain Observed Is Real • Customers Co-Author Industry Best Practices • Customers Make Your Product Better • Customers Crown the Category Leader
  29. 29. How to Mobilize Advocates Access, Power, and Stuff
  30. 30. For a Practical Playbook on How to Put these Principles into Practice… Category Creation: How to Build a Brand That Customers, Employees, and Investors Will Love • Available October 15 • Pre-Order Available Now • @CategoryTheBook

Editor's Notes

  • For startups creating categories, the value of dominating a market while scaling can lead to operational benefits as well.
  • If the answer is no, don’t worry, you’re in good company.
  • We live in a world that has put a premium on disruption… take a look at the top 10 movies on the all-time box office list.
  • Only 2 of the 10 most successful movies are original concepts, and not reboots of old ones. Both happen to be James Cameron movies, perhaps one of the great original thinkers of our time.
  • But this obsession with disruption is especially true in technology – in fact, Silicon Valley is obsessed with disruption. Just take a look at the selection of recent 2019 IPOs. All incredible companies, that have disrupted an existing market.
  • But, I don’t know. I happen to think that the death of originality has been greatly exaggerated. That not only are there original ideas in both consumer and enterprise markets, but that there’s a very pragmatic way to bring them to life. In fact, I would surmise it to say that there may be greater reward in the long run for companies who are able to do so successfully.
  • In our consumer lives – we know of an original idea cooked up by a team of researchers in Florida to replenish carbohydrates and electrolytes burned during sports activities. We can all remember a world where coffee did not come in pod form, and getting in cars with strangers was typically regarded as a bad thing.
  • We see it in B2B too – where companies like HubSpot, Salesforce, DocuSign and many others have done so much more than bring great products into our work lives, but quite literally introduce a brand new idea that transformed the way we work. As a result, they’ve experienced tremendous success, the three logos now worth a combined $140B and have become generational brands in our industry.

    So, how did they do it?
  • They used a strategy that has since become known as category creation. The output is an entirely new industry of products and services—distinct and differentiated from anything that had ever come before—with a single “category defining” company positioned as the winner in the new market. Unlike the disruption playbook, category creation typically has no incumbent vendor in the market, and no single company articulating the problem in a way that’s currently addressable by a product. Therefore, the value proposition is not just different, it’s brand new.
  • - ~100k of ARR, a few good logos…
  • Investors love it, we know that the market values it.
  • For startups creating categories, the value of dominating a market while scaling can lead to operational benefits as well.
  • Beyond any and all quantitative measures of success—financial or otherwise—there is undoubtedly a higher calling of category creation for customers in the community and employees who are enrolled in the mission.

    Customers of category creators benefit from a company in the marketplace seeking to help them solve complex problems, get promoted, and self-actualize in their own lives and career journeys. Employees at category creators have a unique opportunity to unleash their creativity in the workplace, participate in an incredible corporate culture, and launch a movement behind a new product or service.
  • The good news is that anyone can participate in category creation—even companies that are in their infancy or are in the early innings of bringing a product to market. While developing a 10x product is an incredible advantage (see Slack, Uber, or Airbnb as examples), it’s not a prerequisite.

    The truth is that most entrepreneurs, executives, and marketers don’t set out to create a category from the onset, but rather, see patterns in the journey of planning the business that signal there’s a category to be created. These signals are observations of a unique problem in the market that no one is paying attention to in a meaningful way.
  • 1. Little to No Competitors in Your Space—Although there may be a handful of small, early stage companies addressing a similar problem (or at the fringes), there is no incumbent “800-pound gorilla” brand that dominates the market.
    2. Low Search Volume/Cheap(er) Ad Inventory—Typically no one is searching for the problem you solve by name, which makes your ability to buy traffic exponentially harder than those operating in established markets.
    3. No Press or Media Coverage—There are no beat reporters or media outlets covering your space (although you may have some early influencers who can serve as evangelists and brand advocates).
    4. A Marginalized Buyer No Company is Paying Attention to—Do your buyers or users have power within the organization? Is there a company in the marketplace focused on making them heroes? Are they underserved?
    5. Small (but Passionate) Niche of People Who “Get It”—Are there small communities, consultants, or influencers who are out ahead of any company talking about the problem?
    6. Larger Population of People Who Don’t “Get It” (Right Away)—Our brains are wired to identify cognitive references when approached with an original idea.You may find that your friends in the industry, partners, maybe even investors can’t understand the full scope of your vision, but instead try to compartmentalize the vision into an existing category.
  • To be successful in category creation, your brand must stand for something bigger than simply the products that you create, and beyond that, the community needs to know it.
  • Purpose informs your brand, shows the industry and community a preview of the world you are creating, and inspires the values that will guide your decision making along the journey.
    Purpose draws talent into your company, retaining leaders within the movement that you’re building and creating a sense of vocational fulfillment through seasons of both triumph and trial.
    Purpose inspires your community to navigate uncharted waters together toward the idealistic true north that you’ve described.
    Finally, purpose helps grow your business by attracting customers who build stronger emotional connections that go far beyond a transactional relationship.
  • Start by Defining the Individual Purpose of the Executive Team. Company purpose will always correlate to personal purpose. The two components of expressing personal purpose are defining (a) your talents, gifts, or core competencies and (b) how you choose to employ those gifts out in the world. As executive teams set out to answer those two questions and articulate their own higher purpose, the outcome of that discovery will almost certainly result in an expression like the following: I want to get better as a human, and in the process of doing so, I want to lift up others and help them achieve what’s important to them.
    Break Out in Small Groups to Look for the Golden Threads. Ask each other questions like: What business are we really in? What is the benefit of our service to our customers and society at large? Why does that matter? What is the end result we offer? Why does that matter? Why do we exist?
    Develop a People Strategy Informed by Shared Institutional Purpose. That’s where the purpose statement articulated in the second step comes in—a container that becomes a filter for how organizations recruit, enable, and align teams in the pursuit of institutional purpose.
  • People are at the heart of category creation, not products. Humans have a desire to realize our fullest potential which, according to American psychologist Abraham Maslow, is our highest motivation for psychological health once our most basic needs (such as physical survival, safety, and others) are met. Your job as a brand is to help the humans in your market on their journey to self-actualization.

    Eventually your products will matter to them, especially if positioned as an accelerator to movement up Maslow’s pyramid. However, even at that point, developing a content marketing strategy that speaks to all levels of the pyramid will build that trusted advisorship and category leadership that’s much more impactful than positioning feature benefit in the early innings of new markets.
  • How many webinars have you watched in your personal life as a consumer? How many e-books (not from Amazon or Apple Books) have you downloaded for any reason other than work?
    The B2C world understands the power of brand in driving business results, a notion from which those of us in B2B marketing can draw inspiration, but seldom activate in our day-to-day jobs of building and optimizing marketing funnels
  • Thinking about your content marketing philosophy as a lifestyle brand for the community in your new category is a powerful way to optimize for both short- and long-term outcomes.

    For companies creating categories within the business context, an analog for lifestyle brand would be career companion—the sum of your content marketing efforts can inspire, guide, and motivate the professional development of the people in your community. Can your brand aspire to “do life” with those in the role that you serve?
  • Give example of Drift -> $30M ARR business growing purely on brand – successful podcast (Seeking Wisdom), premium content subscription (Insider/Insider+), videos, etc.
  • What is it about in-person experiences that gives us energy as humans? In our personal lives, we spend money to go to concerts and sing along to the same songs we hear on the radio, or attend sporting events to root for the same team that we can watch on TV.

    These are strangers we’ve never met before, but when together, we are united by the lyrics to the songs we know by heart and the stat lines of our favorite players. When we feel the weight of being hyper-connected digitally—yet so alone in a broken world—community gives us the sense of belonging that we so desperately desire.

    The pursuit of connection and belonging is hardcoded into our psychology as humans and is not a toggle that can be intentionally switched on/off when at work.
  • Within the context of category creation specifically, facilitating the development and growth of community around your market is vital to success. The unmet need you’ve identified in the market is the common cause that binds your audience together, similar to the concert and sporting event examples that I referenced earlier. Unlike those examples, however, which have established fan bases to begin with, the early chapters of a new category can often feel very lonely for those who are participating. There can be an overwhelming feeling of being alone in figuring out how to solve that problem, realizing that there are not enough resources to be effective, or navigating a lack of empowerment to contribute to strategy.
  • One of the best ways to gather and grow your community is by putting on a live event.
  • At the end of the day, a company’s ability to create a category successfully is inextricably linked to validation from its ecosystem—with customers serving as the most leveraged relationships from which to begin.
    Consider a company that yells new category positioning into a void themselves with no external validation. Eventually, the company will realize that something isn’t working with that approach and move on to try something new. But what if that same company created a platform for other voices to position the category, with trusted voices from reputable companies?
    social proof is embedded in the psychology surrounding market perception of companies and their products.
  • Advocacy moments are not favors, but opportunities for customers, teammates, or general members of the community to go on the record with their personal stories and experiences.

    Access, power, and stuff. Access means treating your customers as VIPs or rock stars, creating exclusive experiences such as a private networking event or customer-only lounge at your industry conference. Power creates a belief that advocates can actually influence the strategy of your business or category, through programs such as beta access to messaging or product releases in exchange for feedback. Stuff is a bit more material.
  • Advocacy moments are not favors, but opportunities for customers, teammates, or general members of the community to go on the record with their personal stories and experiences.

    Access, power, and stuff. Access means treating your customers as VIPs or rock stars, creating exclusive experiences such as a private networking event or customer-only lounge at your industry conference. Power creates a belief that advocates can actually influence the strategy of your business or category, through programs such as beta access to messaging or product releases in exchange for feedback. Stuff is a bit more material.
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