Notes — Christopher Lochhead on Category Design, the Better Trap, and Languaging

Four questions [Adler frame]

Q1 — What is it about? Category design as a business strategy: why creating a new market category generates disproportionately more value than competing in an existing one, how to go about it (languaging, point of view, backcasting), and how to market it effectively (lightning strike, super consumers, damming the demand).

Q2 — How is it argued? Primarily through data (the 76% rule, from a peer-reviewed HBR study of all venture-backed US tech companies 2000–2015), historical case studies (Gojo/Purell, Otis elevator, Starbucks, Peloton, Lomi, Threads, Amazon Fire Phone, Red Bull Cola, Microsoft Stores), and a set of memorable frameworks. The tone is evangelical and rhetorical; the argument is more example-driven than analytical. Lochhead is not a neutral narrator — he is selling category design. That noted, the counterexamples (why “better” fails) are well-chosen and compelling.

Q3 — Is it true? The 76% data point is specific (venture-backed US tech, 2000–2015); its generalisability across industries and geographies is untested. The “better product doesn’t win” argument has real support in the examples chosen, though the set is curated — many successful companies did succeed on incremental superiority within a category (Chrome, Slack, Spotify). The backcasting framework (Mike Maples) has support in the design-thinking and scenario-planning literature. The “positioning is for losers” framing is deliberately provocative; the underlying point (competitive comparison positioning is less valuable than category creation) is defensible. The lightning strike vs peanut butter argument is intuitive and consistent with attention economics.

Q4 — What of it? The most actionable takeaways: (1) ask explicitly “am I competing or am I designing?” before going to market; (2) use the backcasting exercise to unshackle strategy from present constraints; (3) craft a category POV that is about the customer’s problem, not the product’s features; (4) concentrate marketing in lightning strikes rather than spreading thin. The category design lens is a genuine complement to the product strategy lens — they are not in opposition.

Glossary

Category design: The deliberate creation of a new market category by reframing a problem in a way that makes the existing solution inadequate and your solution the only logical answer. Distinct from competing in an existing category. Does not mean “first to ship a product with X features” — it means designing the problem space.

The Better Trap: The unquestioned, unconsidered assumption that building a better product in an existing category is a sound strategy. Lochhead’s data: one company earns 76% of market cap in tech categories; competing for “better” means fighting for the 24%. Examples of the trap: Threads (despite greatest-ever distribution advantage), Amazon Fire Phone, Red Bull Cola, Microsoft Stores.

Category queen/king: The company that earns approximately two-thirds (76% in Lochhead’s data) of the total market capitalisation/valuation created within a market category. The goal of category design is to be the category queen.

Languaging: The strategic, deliberate use of new language to create new thinking about a problem. The company that creates the category language wins. Examples: Elisha Otis calling the elevator a “vertical railway” (making the use case legible); Starbucks inventing “venti/grande/latte/macchiato” to justify 3× price premium on coffee; OpenAI introducing “large language model” and “training data” as category-defining terms.

Point of view (POV): A structured, resonant articulation of a problem and a new or different solution; what executes the frame/name/claim process. A good POV is about the customer (their problem, their world) not about the product. Marketing’s job is to put the right words in the right mouths — a category POV that is transmissible word-of-mouth is the goal.

From-to (FROTO): The movement the category designer wants to lead customers through: from the way it is now (the status quo, the existing problem/solution) to a new and different way. Category designers compete against the status quo, not against competitors.

Backcasting: Mike Maples’ technique for unshackling strategy from the present. Forecasting: stand in the present and project forward. Backcasting: stand in the desired future (5 years out, everything has gone incredibly) and look back to the present, asking “what did we do to make this happen?” Backcasting prevents the mental scaffolding of the present from constraining the imagined future.

Reject the premise: A thinking technique for radical innovation — abandon all assumptions about the current solution entirely. John Bielenberg’s teaching exercise: design a bicycle that cannot be ridden. By removing the core premise, thinking opens up. Synonymous with Lochhead’s first law: thinking about thinking is the most important kind of thinking.

Lightning strike vs peanut butter: Two marketing models. Peanut butter: spread budget evenly across the year in campaigns — derived from 50-year-old reach/frequency media logic, increasingly ineffective in an attention-scarce environment. Lightning strike: concentrate all effort into 1–3 focused moments per year that create total saturation and undeniability among super consumers. “I’d rather matter for one week a year than be irrelevant for the rest of the year.”

Super consumers: The 8–10% of buyers who drive the majority of profits and, more importantly, set the professional/cultural zeitgeist in a category — they are who others look to for best practice, opinion, and aspiration. Primary targets for category design marketing. Category POV must resonate with supers first; WOM then spreads the category.

Damming the demand: Competing category-to-category rather than brand-to-brand. A category dam intercepts demand flowing toward an existing category and redirects it to a new one. Examples: spinning intercepted road cycling (“why risk your life?”); Peloton dammed spinning (“why drive to the gym?”). Neither attacked the incumbent category directly.

Magic triangle: Product, company, and category must all be designed simultaneously and intentionally. They are equally important. Category design is not pejorative to product — products fail because they don’t get category-designed. Product without category design = invention without adoption.

The 76% rule and what it means

Lochhead’s data (from Play Bigger, peer-reviewed HBR publication): in venture-backed US tech companies 2000–2015, on average one company earns 76% of total market capitalisation in a category. Two strategic implications:

1. If you enter an existing category, you are mathematically competing for at most 24% of the economics — and that’s only if you become the #2 player.
2. If you design your own category and become its queen, you are competing for 76% of a market you helped define. The TAM question becomes irrelevant because you are creating demand, not capturing it.

Limitation: the data is specific to US venture-backed tech in a 15-year window. Lochhead does not quantify how many category creation attempts fail vs succeed.

The Better Trap — failure case studies

Pattern: all four had significant advantages (distribution, brand, resources), all failed because they attacked an existing, well-defined problem with an incrementally better version of the known solution.

Frame, Name, Claim — the operational process

Three steps Lochhead identifies, executed through languaging and a POV:

Frame: Restate the problem in a way that makes the existing solution inadequate and creates an opening for a new one. Gojo: “How do I wash my hands without a disgusting bar of soap?” → reframed to “How do I clean my hands in the absence of water?” → hand sanitiser. The frame must be meaningful to the customer, not just compelling to the founder.

Name: Attach new language to the problem and solution that creates a mental category. Elisha Otis: “vertical railway.” Starbucks: “venti/grande/latte.” The name must be learnable and transmissible. New languaging creates new thinking → new value perception → price and/or share premium.

Claim: Execute enough category marketing (POV + lightning strikes + super consumer education) that the category becomes associated with your company’s name. When people think of the category, they think of you. Salesforce owns CRM; OpenAI owns LLM.

Category design vs product positioning

Lochhead explicitly separates these:

• Positioning (in the competitive comparison sense): “Here are our 25 features vs their 18 features.” Designed to capture demand from an existing category by demonstrating superiority. Lochhead calls this “category design for the cowards” — it already concedes that you’re fighting for the 24%.
• Category design: Designing the problem space such that there is no obvious comparison. The goal is to be irreplaceable — “switch to what?”

This directly challenges April Dunford’s positioning framework, which is about finding the best category for your product to compete in. Both can be valid at different stages: Dunford’s positioning assumes you have a product and need to find the right frame; Lochhead’s category design assumes you have a problem and need to design the frame.

See Product Positioning for April Dunford’s complementary treatment.

Connections

• Product Positioning — April Dunford’s framework for competitive positioning; Lochhead’s category design is an upstream step that, if done right, makes competitive positioning largely unnecessary
• Chandra Janakiraman on An Operator's Guide to Product Strategy — strategy as hypothesis; category design is one possible content for a strategy hypothesis (“we will win by designing a new category”)
• 7 Powers — Lochhead’s “76% rule” is empirically consistent with Hamilton Helmer’s argument that power in technology markets concentrates at the top; category design is one path to establishing counter-positioning power
• Arielle Jackson on the Art of Building Legendary Brands — languaging and brand naming as tools for category creation; Arielle’s brand hierarchy maps onto Lochhead’s frame/name/claim process