The B2B Tech Marketer’s Guide To Category Design: How To Engineer Your Market, Find What Makes You Different, And Become A Category Queen

Too often, the Marketing department sits at the kid's table in the C-suite.

Arrrrr! 🏴‍☠️ Welcome to a paid edition of Category Pirates. This foundational series shares category design principles, strategies, and actionable frameworks to help you design new and different categories. Thank you for reading. And of course, forward this mini-book to anyone who needs to hop aboard the Pirate ship.

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Dear Friend, Subscriber, and Category Pirate,

In enterprise technology, the company that wins the corner office wins.

(Let that cook in a corner of your cerebellum—we’ll get back to it soon.)

Marketing is a legendary career. 

Being great at marketing is a radical, unfair advantage. It's a source of lifetime employment and enjoyment. And building a company through marketing is one of the greatest professional experiences you can have.

Companies with legendary marketing seem to know something most people don’t. 

They set the agenda—they are bold, interesting, even provocative.

Companies with legendary marketing are (almost) impossible to beat. They do things on a regular basis that make you think, “Wow, why can’t we do things like that?” There’s almost a mystery to them.

Companies with legendary marketing stand out. They create an “it factor” for customers, partners, investors, and talent. The legendary marketing people are always cool (and rich!).

As a result, companies with legendary marketing have higher revenues, profits, and market caps.

But there is one exception—marketing at most B2B tech companies.

One time, an enterprise software CEO (in an effort to express disdain for marketing) told Pirate Christopher, “We make shit and sell shit, and everything else is bullshit.”

So, let’s start with the quiet part. 

Many CEOs in B2B tech think of Marketing and HR in the same way. 

They're internal cost-centers whose job is to “serve internal customers.” 

That makes Marketing in much of B2B tech a service bureau whose two most important internal customers are 1) the Sales team and 2) the Product team. Sales wants Glengarry leads. The Product team wants positioning. So Marketing scrambles to make their customers happy.

Service bureau marketers are reactive, not proactive. 

They're followers, not leaders. They let competitors dictate the rules of engagement. They accept the premise of the overall category as it is vs. how it could be.

Let’s keep telling the truth. 

Too many CMOs are happy to have the title CMO, even for a short while. (But it’s not about titles, it’s about results.) That’s why the Marketing department in tech, especially B2B, sits at the kid's table in the C-suite. 

And the CMO has the shortest life span of anyone on executive row.

The second a CMO falls into the service bureau hole, she’s done. 

Service bureaus are not strategic. Internal Marketing service bureaus are (slightly) more valuable than external payroll services. Service bureaus are paid to meet SLAs (service level agreements). They're measured on metrics, so when they miss their SLAs, they get fired.

Do you know who your company uses for payroll, benefits administration, or janitorial services? 

Do you care?

A Marketing service bureau’s value is measured in MQLs (marketing qualified leads), and B2B Sales and Marketing teams love to fight about leads. Which is a completely asinine discussion (more on that later). But many B2B tech marketers have bought into the service bureau swindle. So, they throw a ton at the “now” via ads to try to generate immediate service bureaus results. 

They need to service Sales, but this is a trap—a race to the bottom. 

As a result, B2B tech Marketing service bureau leaders are obsessed with “demand generation.” 

Top of funnel, top of funnel, top of funnel! They chase existing demand, in an effort to compete for existing market share. They often over-fixate on the buyer's journey, lead capture, SEO, PPC ads, demos, downloads, demand capture, etc. They analyze a few common search terms, and run ads like there’s no tomorrow. They over-rotate on near-term metrics. 

They're trying to capture demand, not create it. 

If you want to capture demand, you must market to the present and the past. But if you want to create demand, you must create and market to the future. 

You become a real B2B tech marketer the day you get the technology business is winner-take-all. 

The data are clear: One company (the Category King) earns 76% of the total category value, while everyone else fights for the remaining 24%.

Once you get this, you get a ton of other things:

1. Marketing is the leadership department.

2. Marketing sets the tone for everything in your business.

3. Marketing frames, names, and claims everything in the business.

4. Marketing’s job is to do whatever it takes to make your business the Category Queen.

Our best guess is that 5-10% of B2B tech CEOs are category designers. 

They're a different breed. They believe deeply in marketing and understand what’s at stake. They're not playing a demand capture game. They aim to summon the vision of Steve Jobs, the charisma of Sara Blakely, and the audacity of Elon Musk. And they fundamentally understand the task at hand: 

Design and dominate a giant category that matters.

Demand Creation > Demand Generation

According to Harvard Business Review, more than two-thirds of startups never deliver a positive return to investors.

Category creation is the strategy for winning the long, high-stakes game. It takes radical business savvy to meet the market where it is, and then lead it to a new and different place. That’s exactly what category designers do. 

G2, a review site for business software and services, has reviews for 1,700 categories and more than 93,000 products. Most of these categories have a Category Queen that earns up to 76% of the economics, followed by dozens of companies that compete for the remaining slice. (It’s good to be Queen!)

Here's an example of the Generative AI Category:

Source: Generative AI map by Sequoia Capital

So, how do legendary marketers stand out? 

They create radically different demand.

Now, we've written about what it means to DAM the Demand. And you understand the importance of using marketing to drive revenue. But this mini-book will look at category design through a B2B tech lens, so you can see the strategies legendary marketers use to rocket their companies to Category King. 

Grab your pirate mug, fill it with a libation, and come up on deck. 

We’re going to make revenue happen.

The B2B Tech Marketer's Guide To Demand Creation