#BestOf2019: Why Category Design is a Marketing Superpower w/ Christopher Lochhead

WEBVTT 1 00:00:05.879 --> 00:00:08.830 Hey there, this is James Carberry, founder of sweet fish media and one 2 00:00:08.869 --> 00:00:11.710 of the cohosts of this show. For the last year and a half I've 3 00:00:11.710 --> 00:00:15.509 been working on my very first book. In the book I share the three 4 00:00:15.589 --> 00:00:19.989 part framework we've used as the foundation for our growth here at sweetfish. Now 5 00:00:20.030 --> 00:00:23.140 there are lots of companies that have raised a bunch of money and have grown 6 00:00:23.179 --> 00:00:26.100 insanely fast, and we featured a lot of them here on the show. 7 00:00:26.859 --> 00:00:31.100 We've decided to bootstrap our business, which usually equates to pretty slow growth, 8 00:00:31.660 --> 00:00:35.219 but using the strategy outlined in the book, we are on pace to be 9 00:00:35.380 --> 00:00:39.170 one of inks fastest growing companies in two thousand and twenty. The book is 10 00:00:39.250 --> 00:00:43.250 called content based networking, how to instantly connect with anyone you want to know. 11 00:00:43.810 --> 00:00:45.850 If you're a fan of audio books like me, you can find the 12 00:00:45.890 --> 00:00:48.890 book on audible, or if you like physical books, you can also find 13 00:00:48.929 --> 00:00:54.039 it on Amazon. Just search content based networking or James Carberry, car be 14 00:00:54.240 --> 00:00:58.799 a ARY, inaudible or Amazon and it should pop right up. All right, 15 00:00:59.000 --> 00:01:03.799 let's get into the show. Hey, everybody, Logan with sweet fish 16 00:01:03.880 --> 00:01:07.790 here, as we've been doing all month long. We're rounding out our countdown 17 00:01:07.870 --> 00:01:11.750 of the top twenty episodes of two thousand and nineteen. Coming in at number 18 00:01:11.790 --> 00:01:15.390 two is the first in a two part series we did with Christopher lockhead within 19 00:01:15.629 --> 00:01:21.859 the category creation series here on BB growth. Along with ABM, category creation 20 00:01:22.060 --> 00:01:25.739 was one of those common themes that we heard throughout two thousand and nineteen. 21 00:01:25.939 --> 00:01:29.620 We hope you enjoyed this and stay tuned tomorrow for the second part of this 22 00:01:29.739 --> 00:01:33.930 series as we reach number one on the top twenty episodes of two thousand and 23 00:01:33.930 --> 00:01:37.730 nineteen. To get more episodes coming up in the countdown. Make sure you're 24 00:01:37.730 --> 00:01:41.849 subscribed to the show in apple podcast or wherever you do you're listening. You 25 00:01:41.969 --> 00:01:47.280 can also check out the full list at Sweetish Mediacom blog. Just look for 26 00:01:47.439 --> 00:01:51.159 the Hashtag Best of two thousand and nineteen in the categories on the right hand 27 00:01:51.200 --> 00:01:56.879 side of that page. Hi Everyone, and welcome to another episode of the 28 00:01:57.040 --> 00:02:00.510 Category Creation Series on the BDB growth show. I'm John rugie. To kick 29 00:02:00.590 --> 00:02:06.150 off this twelve episode in the category creation series, I have just three words 30 00:02:06.230 --> 00:02:10.590 for you. Follow your different that's what our guest Christopher Lockhead, wants us 31 00:02:10.590 --> 00:02:15.710 to think about when approaching category design. Now, if you don't know about 32 00:02:15.710 --> 00:02:20.300 Chris, you absolutely should. Not only has he written the book that every 33 00:02:20.419 --> 00:02:23.860 aspiring category designer needs to read, called a play bigger, but he's also 34 00:02:24.060 --> 00:02:29.620 the host of a top thirty rated podcast, a number one Amazon best selling 35 00:02:29.659 --> 00:02:34.569 author and a former three time silicon valley CMO with at least one IPO to 36 00:02:34.689 --> 00:02:38.810 his name. Chris is also an advisors to over fifty venture back startups. 37 00:02:38.930 --> 00:02:42.530 Wow, not only is Chris Super Accomplished, but he's an ultra nice guy 38 00:02:42.689 --> 00:02:46.120 and we had a really fun conversation. Now, Chris's Advice on category design 39 00:02:46.199 --> 00:02:51.639 is pretty extensive, so we've broken his interview into two parts. This is 40 00:02:51.879 --> 00:02:54.199 part one, and here's what you're going to learn from Chris in the next 41 00:02:54.400 --> 00:03:00.629 thirty minutes. Number one, why Chris thinks category design is at marketing superpower. 42 00:03:00.669 --> 00:03:05.990 Number two, why the category kings tend to capture seventy six percent of 43 00:03:06.110 --> 00:03:09.430 a marcus economics on average, and number three, what the three pillars of 44 00:03:09.509 --> 00:03:14.620 a legendary company are. Sound good, then let's fire up part one of 45 00:03:14.699 --> 00:03:17.860 our interview with Chris Lockhett. Chris, welcome to the show today. So 46 00:03:19.099 --> 00:03:21.340 great that you could be with me today. John, thank you for having 47 00:03:21.340 --> 00:03:23.300 me on I'm stoked to be here. Yeah, yea. You know, 48 00:03:23.379 --> 00:03:27.020 as a student of category design, just getting to interview you is is pretty 49 00:03:27.020 --> 00:03:30.250 humbling. It's a huge honor and just yeah, I can't thank you know 50 00:03:30.370 --> 00:03:32.449 for taking the time to be with me. Well, I can't thank you 51 00:03:32.490 --> 00:03:37.449 enough for having me. And I'm a student of category design to well, 52 00:03:37.449 --> 00:03:39.129 I think it's safe to say that you're a little bit further ahead of me, 53 00:03:39.330 --> 00:03:43.319 but you know, we've got a lot of talk about in that in 54 00:03:43.400 --> 00:03:45.719 that regard. But you know, before we dive into things, I got 55 00:03:45.840 --> 00:03:47.560 to ask you, Chris. You're at this book with a few others called 56 00:03:47.599 --> 00:03:53.080 play bigger, and one of the authors described you as the Bruce Willis of 57 00:03:53.639 --> 00:03:55.830 CMOS, or like the Bruce Willis if you were a Cmo and the die 58 00:03:55.870 --> 00:03:59.789 hard movie. So I would ask you, is that your superhero? Is 59 00:03:59.789 --> 00:04:02.870 that your action hero of choice, or that kind of thrust upon you? 60 00:04:03.789 --> 00:04:06.949 It's funny. I forgot that. Yeah, Kevin Mayne wrote that, which 61 00:04:06.990 --> 00:04:13.219 is very fun I guess. I mean my superhero as a kid and even 62 00:04:13.219 --> 00:04:15.620 today, is an adult that I related to more. Was Always Batman, 63 00:04:15.939 --> 00:04:18.740 and Bruce Willis was not, was not famous when I was a kid, 64 00:04:18.860 --> 00:04:24.410 but it's hard not to love, particularly the first die hard movie. You 65 00:04:24.490 --> 00:04:27.689 haven't gotten any glass in your feet in your marketing career, though I hope 66 00:04:28.209 --> 00:04:30.009 you know I've gotten a lot of glass of my feet in my marketing career 67 00:04:30.089 --> 00:04:32.610 and I've had a lot of people shoot at me and call me names and 68 00:04:33.810 --> 00:04:39.480 try to kill me and wish ill upon me. So I relate to that 69 00:04:39.639 --> 00:04:42.040 part of it and I've left a lot of blood, sweat and tears on 70 00:04:42.160 --> 00:04:46.839 the on the marketing start up battlefield, so to speak. Right well, 71 00:04:46.959 --> 00:04:48.399 you know, speaking of blood, sweat and tears, you've you've built a 72 00:04:48.439 --> 00:04:54.750 major consulting company called science during thecom boom. I think you went hired a 73 00:04:54.790 --> 00:04:59.709 couple thousand people in just three years. Helps later, you help reposition macromedia 74 00:04:59.790 --> 00:05:05.990 before Dobie made that acquisition, and you even turned software company called Mercury Interactive 75 00:05:05.990 --> 00:05:11.060 from a one billion dollar company to a five billion dollar company. So maybe 76 00:05:11.100 --> 00:05:13.860 to give us some context for the interview today, can you just give me 77 00:05:13.899 --> 00:05:16.420 a little bit more about your your thirty years of marketing experience and have that 78 00:05:16.579 --> 00:05:19.500 brought you to where yard today? Sure so, as you said, you 79 00:05:19.620 --> 00:05:24.970 know, I've done three tours of duty as a public company, tech, 80 00:05:25.170 --> 00:05:30.449 a CMO in Silicon Valley, and I got started pretty early on John I 81 00:05:30.529 --> 00:05:33.730 got thrown out of school at eighteen for failing out and being stupid, and 82 00:05:33.930 --> 00:05:39.000 so I, like a lot of entrepreneurs, you know, for me entrepreneurship 83 00:05:39.120 --> 00:05:43.839 was not away up in the world necessarily, but a way out, you 84 00:05:43.920 --> 00:05:46.720 know, a way out of a life of struggle. And I think for 85 00:05:46.800 --> 00:05:51.230 a lot of US entrepreneurs we start a company because it's no one else will 86 00:05:51.230 --> 00:05:55.949 bet on our future, because there's no evidence that betting on us makes any 87 00:05:55.990 --> 00:05:58.430 sense at all. And so, you know, in a lot of ways 88 00:05:58.430 --> 00:06:01.509 entrepreneurship is a way to bet on yourself. And so I very early on 89 00:06:01.709 --> 00:06:05.819 bet on myself and started my first company at Eighteen, and then by the 90 00:06:05.899 --> 00:06:12.779 time I was twenty eight I was here in Silicon Valley and I was ahead 91 00:06:12.779 --> 00:06:15.300 of marketing for a publicly traded software company, of firm called the Phanto at 92 00:06:15.339 --> 00:06:18.529 the time and, you know, just onward and upward since then. And 93 00:06:18.649 --> 00:06:24.649 then at by thirty eight, after we sold mercury to Hewlett pack or, 94 00:06:25.009 --> 00:06:28.410 you know, I just decided it was time to hang them up and front. 95 00:06:28.490 --> 00:06:34.000 Since then I've been doing some advisor board consulting type stuff and then, 96 00:06:34.399 --> 00:06:39.199 as you know, most recently in the last couple years, have kind of 97 00:06:39.319 --> 00:06:43.279 reinvented myself as an author and a podcaster. Yeah, and you've written a 98 00:06:43.279 --> 00:06:46.389 couple books that are pretty widely circulated, at least among the crab that I 99 00:06:46.430 --> 00:06:50.550 speak to, niche down and play bigger. Can you give me quick can 100 00:06:50.589 --> 00:06:54.910 I run down of those two? Yeah, the both books are about this 101 00:06:55.269 --> 00:07:00.269 concept, this new strategy and business called category design and play. Bigger is 102 00:07:00.430 --> 00:07:03.019 more for, if you want to think of them this way, biggie entrepreneurs, 103 00:07:03.699 --> 00:07:06.579 that is to say, I raise a bunch of money, I'm trying 104 00:07:06.579 --> 00:07:10.579 to grow really fast, I'm trying to design a new category that that I 105 00:07:10.620 --> 00:07:15.129 can dominate and become the next Cisco, Google or Cole Facebook, except. 106 00:07:15.529 --> 00:07:19.410 And then my second book, Niche Down, is about the same concept of 107 00:07:19.529 --> 00:07:24.490 category design, but applied to, if you will, a Smiley Entrepreneur. 108 00:07:24.810 --> 00:07:29.009 I just opened a pizza parlor, or I'm a flower shop, or I'm 109 00:07:29.050 --> 00:07:33.000 a restaurant or, as we have here in I live in Santa Cruz California, 110 00:07:33.839 --> 00:07:39.040 we seem to have a new craft group hub opening every fifteen minutes in 111 00:07:39.160 --> 00:07:43.120 town. So for those entrepreneurs who, you know, save up a little 112 00:07:43.120 --> 00:07:46.670 bit of money, maybe borrow a little bit of money from their uncle Steve 113 00:07:46.709 --> 00:07:49.230 or whatever, and on her hanging out of shingle. So niche down is 114 00:07:49.350 --> 00:07:55.069 for smallly entreprenurs. Hain't a category and play biggers for biggie entrepreneurs and how 115 00:07:55.110 --> 00:07:57.670 they can do the same thing. Okay, yeah, so you've written two 116 00:07:57.709 --> 00:08:01.500 books. You've had a pretty long marketing career, louts of different experiences, 117 00:08:01.980 --> 00:08:05.139 and I believe you have been referred to this kind of a sense in the 118 00:08:05.180 --> 00:08:09.779 marketing space. Said how you describe yourself for a week iy, something else, 119 00:08:09.779 --> 00:08:13.370 Chris. Well, some people have pejorative things to call me, but 120 00:08:13.850 --> 00:08:16.490 I mean, look, I don't know that. That's for other people to 121 00:08:16.610 --> 00:08:20.810 decide. I'm I'm a guy who, like a lot of marketers, like 122 00:08:20.930 --> 00:08:26.009 a lot entrepreneurs, you know, got into business because it was a way 123 00:08:26.050 --> 00:08:30.879 for me to bet on my future when nobody else would, and so I 124 00:08:31.000 --> 00:08:33.639 had nothing to lose. And I've learned a lot of things along the way, 125 00:08:33.919 --> 00:08:37.759 some from reading, some from mental tours and, of course, a 126 00:08:37.840 --> 00:08:41.399 lot from trial and error. And you know, so look, I think 127 00:08:41.399 --> 00:08:43.909 I'm just like a lot of marketers, you know, we get out there 128 00:08:43.950 --> 00:08:46.950 in the world and we're trying to design and dominate new categories and build great 129 00:08:46.950 --> 00:08:52.190 companies. And I love technology, you know, and I came to Silicon 130 00:08:52.190 --> 00:08:56.580 Valley from Canada and, like a lot of immigrants, you know, Silicon 131 00:08:56.620 --> 00:09:00.299 Valley has been an amazing place for me. And so the a ha though 132 00:09:00.419 --> 00:09:03.220 for me in this regard, John, is, you know, my whole 133 00:09:03.299 --> 00:09:05.580 career I was the youngest guy in the room, you know, because I 134 00:09:05.659 --> 00:09:09.779 started at eighteen. I was the CMO of a public company a two thousand 135 00:09:09.210 --> 00:09:13.809 and twenty eight and I never thought I would be doing anything other than that, 136 00:09:13.090 --> 00:09:16.769 you know, being the guy who is working hard, sixty to eighty 137 00:09:16.850 --> 00:09:18.889 hours a week, traveling all over the place. He used to travel to 138 00:09:20.009 --> 00:09:22.090 the four hundred thousand miles a year. And you know, I was the 139 00:09:22.169 --> 00:09:24.679 upandcoming guy, right. Yeah, and sort of the interesting thing is you 140 00:09:24.759 --> 00:09:28.120 get to a place in your career where you wake up one day and you 141 00:09:28.200 --> 00:09:31.440 go, Oh, you're not the upandcoming guy anymore, you're now the been 142 00:09:31.480 --> 00:09:35.320 there, done that guy. And so I'm a been there, done that 143 00:09:35.440 --> 00:09:39.190 guy and of course, I'm still trying to learn, you know, just 144 00:09:39.350 --> 00:09:43.950 like you, I'm a category design student. Yeah, well, so real 145 00:09:43.990 --> 00:09:46.909 quick, just to give us more context, best moment as a marketer? 146 00:09:46.149 --> 00:09:50.269 Worst moment as a marketer? HMM, you know, I've had so many 147 00:09:50.309 --> 00:09:54.580 best moments as a marketer. You know, look that you can't you can't 148 00:09:54.620 --> 00:09:58.779 beat going public, standing there at Nasdak pushing a button, you know, 149 00:09:58.860 --> 00:10:03.779 as I got to do it scient and you know, I joined that company 150 00:10:03.820 --> 00:10:07.529 as the founding CMO. We were thirty something people and you know, we 151 00:10:07.649 --> 00:10:11.289 got to well over twozero people and we designed it dominated a space and that's 152 00:10:11.370 --> 00:10:16.929 incredibly exciting, and so experiences like that are amazing. That mercury we got 153 00:10:18.009 --> 00:10:22.639 into a massive amount of trouble and our stock cratered and we had to fire 154 00:10:22.679 --> 00:10:26.960 our CEO, CFO and general counsel in one day and the whole company almost 155 00:10:26.000 --> 00:10:31.080 blew up. And that happened in November and our stock went from the mid 156 00:10:31.679 --> 00:10:35.549 s to the low S and it was incredibly challenging. And then fast forward 157 00:10:35.669 --> 00:10:41.789 to June July of the next year, we sold the company to Hewlett Packard 158 00:10:41.830 --> 00:10:45.389 for five billion dollars. That was a pretty good day. And then I'll 159 00:10:45.429 --> 00:10:48.309 tell you. You know, as a kid with no education, who essens 160 00:10:48.350 --> 00:10:50.659 we got? I guess as we got thrown out of high school. I'm 161 00:10:50.659 --> 00:10:56.740 dyslexic and have some number of these other learning differences. To sit there and 162 00:10:56.860 --> 00:11:01.659 be the first authors to launch a book at NAS DEC on Facebook live in 163 00:11:01.779 --> 00:11:07.450 front of almost half a million people in the NASDEC recording studios and Time Square. 164 00:11:07.970 --> 00:11:11.809 You know that that was an amazing experience. And the other one today, 165 00:11:11.889 --> 00:11:16.809 that's probably maybe a little less dramatic than that, but it's rare for 166 00:11:16.929 --> 00:11:20.559 me today, John, to go a day without somebody sending me an email 167 00:11:20.600 --> 00:11:24.240 or a tweet or a linkedin or something saying that one of my books or 168 00:11:24.440 --> 00:11:28.240 one of my podcasts made a difference for them in their life. And and 169 00:11:28.840 --> 00:11:33.230 that maybe isn't quite the big thrill of hitting the Naz deck button or becoming 170 00:11:33.269 --> 00:11:35.309 a number one best seller, but when you get to the stage of life 171 00:11:35.350 --> 00:11:39.590 that I'm at, you know all I really want to do today, John, 172 00:11:39.750 --> 00:11:43.389 is have a very good time and make a very big difference, and 173 00:11:43.629 --> 00:11:48.259 so it's insanely rewarding knowing that other people say I'm making a difference for them 174 00:11:48.299 --> 00:11:52.139 and their careers and in their business and the fact that you know somebody lets 175 00:11:52.179 --> 00:11:56.139 me know that on a pretty regular basis. That's probably the greatest reward that 176 00:11:56.620 --> 00:12:01.220 I could I could imagine for having a thirty year career like I've had. 177 00:12:01.259 --> 00:12:05.610 Absolutely I can. I can imagine that and hopefully after we share this episode 178 00:12:05.610 --> 00:12:09.169 you'll get a few more of those emails and phone calls kind of thanking you 179 00:12:09.289 --> 00:12:13.649 for your expertise. And you know you've talked about category design. Your books 180 00:12:13.690 --> 00:12:16.039 are on that kind of thought process. So maybe to kind of dive into 181 00:12:16.080 --> 00:12:20.360 that topic a little bit further. Just kind of start us off by telling 182 00:12:20.399 --> 00:12:24.879 us what category design is and why should marketers and entrepreneurs care about it? 183 00:12:24.360 --> 00:12:31.110 Yeah, so it's you know, my writing partner Kevin Maney, says that 184 00:12:31.309 --> 00:12:37.029 category design is a new Lens on business and once you have the Lens you 185 00:12:37.429 --> 00:12:41.350 have really, I think, an unfair competitive advantage. I don't know if 186 00:12:41.389 --> 00:12:46.019 you if you saw the movie taken with Liam Neeson. No, I haven't. 187 00:12:46.019 --> 00:12:48.820 It's a great movie about a guy who's a former I don't know if 188 00:12:48.820 --> 00:12:52.980 he's Seia, but he's, you know, he's a former badass black ops 189 00:12:52.019 --> 00:12:56.580 kind of a guy and and these these bad guys kidnap his daughter. There's 190 00:12:56.620 --> 00:13:01.009 a scene in the movie where he's on the phone with the bad guys and 191 00:13:01.129 --> 00:13:03.289 he says then they say they want a lot of money to get his daughter 192 00:13:03.409 --> 00:13:05.570 back and he says, look, I don't have a lot of money, 193 00:13:05.850 --> 00:13:09.970 but what I do have is a very special set of skills, skills honed 194 00:13:11.009 --> 00:13:15.120 over a long career, that make me a really big problem for people like 195 00:13:15.279 --> 00:13:20.159 you. And so I think category design is a very special set of skills 196 00:13:20.960 --> 00:13:26.120 that, for marketers and entrepreneurs, give them an unfair competitive advantage. And 197 00:13:26.870 --> 00:13:35.190 here's why. Most people believe in it unchallenged way, that the best product 198 00:13:35.309 --> 00:13:39.710 wins. Most people believe that if we can expose the world to our product 199 00:13:39.750 --> 00:13:45.059 or our service that we're going to win. And most people sort of treat 200 00:13:45.179 --> 00:13:48.460 the market like they treat the weather. Right, so you wake up in 201 00:13:48.500 --> 00:13:50.220 the morning and I say, well, what's the weather going to be in 202 00:13:50.340 --> 00:13:52.820 northern California today? It's going to be sunny, it's going to be this, 203 00:13:52.899 --> 00:13:56.690 it's going to be that, and they treat the market like it is 204 00:13:56.850 --> 00:14:03.090 the way that it is. And the first big Aha is that categories markets 205 00:14:03.929 --> 00:14:11.039 behave the way they do because somebody designed them that way, either on accident 206 00:14:11.600 --> 00:14:15.200 or intentionally. And I'll give you a simple example. If you take a 207 00:14:15.279 --> 00:14:18.960 big step back and start thinking about well, why is it that this is 208 00:14:18.120 --> 00:14:22.799 the way that it is in our space, a simple example that I can 209 00:14:22.879 --> 00:14:26.309 relate to is in the United States of America, a high end pair of 210 00:14:26.429 --> 00:14:33.950 sunglasses is about three to four hundred dollars and a pretty good medium sized flat 211 00:14:35.029 --> 00:14:39.620 screen TV at Costco is a hundred and fifty to two hundred and fifty dollars. 212 00:14:39.259 --> 00:14:43.379 Now, if you are an alien and somebody said you hey, John, 213 00:14:43.820 --> 00:14:48.860 there's this one category of products that is a piece of plastic that you 214 00:14:48.940 --> 00:14:52.570 put on your eyes to make you less sensitive to the sun, and then 215 00:14:52.610 --> 00:15:00.610 there's this other category of products that is a technological marvel that talks to satellites 216 00:15:00.690 --> 00:15:05.090 in space and delivers, you know, a hundred thousand channels, or certainly 217 00:15:05.129 --> 00:15:11.559 feels that way, of News and information and entertainment. which category of product 218 00:15:13.360 --> 00:15:18.200 is four hundred bucks and which category of Product is two hundred and fifty bucks? 219 00:15:18.960 --> 00:15:22.629 Most people would say, well, it must be the technological marvel that 220 00:15:22.710 --> 00:15:26.549 talks to satellites in space, when, of course, it's not sure. 221 00:15:26.029 --> 00:15:31.909 And so category design is really about why our categories the way they are? 222 00:15:33.590 --> 00:15:39.259 Who set it up and, most importantly, what problem and therefore what solution 223 00:15:39.500 --> 00:15:46.059 matters. And the big hoges like this. The company that designs the category 224 00:15:46.220 --> 00:15:50.169 is best position and to dominate it and in play bigger. We did a 225 00:15:50.250 --> 00:15:54.929 big data science research project orianalyzed every venture back technology start up bounded in the 226 00:15:54.929 --> 00:15:58.610 United States from two thousand to two thousand and fifteen, and we asked the 227 00:15:58.649 --> 00:16:06.639 data set what percentage of total value created in any given category goes to the 228 00:16:06.759 --> 00:16:08.360 market leader, or what you could think of, is the category Queen of 229 00:16:08.440 --> 00:16:12.039 the Category King? And it turns out the answer to that question, and 230 00:16:12.840 --> 00:16:18.320 we wrote an article for the hbr about this, is seventy six percent. 231 00:16:18.029 --> 00:16:22.830 So two thirds of the economics in any given market category goes to the category 232 00:16:22.870 --> 00:16:27.350 Queen. And so what's my point? The A high is most of US 233 00:16:27.750 --> 00:16:34.139 embark on a battle of competition. Legends don't do that. Legends proactively position 234 00:16:34.299 --> 00:16:40.220 themselves as different and unique and design a new way of thinking about a problem 235 00:16:40.620 --> 00:16:45.500 and therefore a solution that meaningfully advantages them and is a meaningful disadvantage to anybody 236 00:16:45.580 --> 00:16:51.570 that comes after them. And so the big Aha is the most legendary marketers, 237 00:16:51.610 --> 00:16:56.129 the most legendary CEOS, the most legendary company founders and, frankly, 238 00:16:56.730 --> 00:16:59.769 the people in the world that make the biggest difference. We could talk about 239 00:16:59.809 --> 00:17:03.200 how this plays outside of business, if you want. Are the ones that 240 00:17:03.320 --> 00:17:07.160 do three things. One, they design a legendary product, to they design 241 00:17:07.160 --> 00:17:10.519 a legendary company and three, and this is the part that most people don't 242 00:17:10.559 --> 00:17:15.750 get, they design a legendary category and when they do that, they proactively 243 00:17:15.829 --> 00:17:18.670 position themselves to be the company that takes two thirds of the economics. So 244 00:17:18.789 --> 00:17:22.869 what play bigger is about, what niche down is about, is this discipline 245 00:17:22.910 --> 00:17:29.390 of category design trying to unpack what are the things that the most legendary leaders 246 00:17:29.430 --> 00:17:33.259 in business history have done, intuitively, to teach the world how to think 247 00:17:33.299 --> 00:17:37.539 differently. And when the world agrees with the way you think, Byam they 248 00:17:37.660 --> 00:17:41.740 literally line up in front of your building to get whatever it is that you're 249 00:17:41.779 --> 00:17:45.250 selling. And fundamentally that's what category designs about. So you talked about those 250 00:17:45.529 --> 00:17:49.089 three kind of pillars coming together roughly the same time. A great company, 251 00:17:49.130 --> 00:17:53.170 a great product and a great category, and I think those first two. 252 00:17:53.730 --> 00:17:57.640 There's a lot of literature around at a design great products. There's a time 253 00:17:57.720 --> 00:18:03.920 around company culture and how to design a great team, but it seems like 254 00:18:03.559 --> 00:18:10.599 the topic of category design, it's not really been talked about in depth as 255 00:18:10.680 --> 00:18:12.710 much as there's other kind of two pillars that you mentioned. Why do you 256 00:18:12.789 --> 00:18:17.549 think that's the case, Chris? Because I think that we live in a 257 00:18:17.710 --> 00:18:22.190 world where we get taught that the most legendary entrepreneurs, the most legendary companies 258 00:18:22.230 --> 00:18:29.339 are innovators. Right. Christensen wrote the INNOVATOR's dilemma, and what most people 259 00:18:29.539 --> 00:18:33.220 here when they hear that is product innovation. Right. So you ask most 260 00:18:33.259 --> 00:18:40.859 people why did apple beat blackberry, most people are going to say well, 261 00:18:41.609 --> 00:18:45.970 you know, the iphone is just a way better product, and so that's 262 00:18:45.970 --> 00:18:49.529 where everybody focuses. And what I would say to you is the statement the 263 00:18:49.690 --> 00:18:59.400 IPHONE is a better product is a an interpretation. Be Not true, because 264 00:18:59.720 --> 00:19:03.599 it's an interpretation, you know, to quote the Big Lebowski that's just like 265 00:19:03.759 --> 00:19:07.640 your opinion man. Right. So an objective measurement it's not. And so 266 00:19:07.839 --> 00:19:14.710 what category design asks is, how do you teach the world to see things 267 00:19:14.789 --> 00:19:17.869 the way you do? So if you are, if you are research in 268 00:19:17.950 --> 00:19:21.910 motion, and you were, I guess, if you could go back in 269 00:19:22.029 --> 00:19:23.819 time and kind of lead that company, what would you have done differently than 270 00:19:25.099 --> 00:19:29.299 to kind of position the blackberry as that category King, and sorry, the 271 00:19:29.619 --> 00:19:34.380 category King, and to kind of position any apples or other efforts as kind 272 00:19:34.380 --> 00:19:38.769 of a secondary player within that space? Yes, so the category King or 273 00:19:38.769 --> 00:19:44.690 Queen Stays in their position as long as the world agrees with the definition of 274 00:19:44.769 --> 00:19:51.369 the problem in the solution. And so blackberries problem was they did not continue 275 00:19:51.490 --> 00:19:56.559 to evangelize the ray zone detra for the blackberry or said in a different way 276 00:19:56.599 --> 00:20:02.640 when the definition, when the design of the smartphone category was it's a mobile, 277 00:20:02.759 --> 00:20:08.190 untethered device whose primary you this case, is email and phone. Then 278 00:20:08.230 --> 00:20:14.509 the blackberry one, when the design of the category gets changed, that is 279 00:20:14.589 --> 00:20:19.910 to say the RFP for what most people agree a smartphone is, moves from 280 00:20:21.390 --> 00:20:26.380 the blackberry definition to a definition called, oh, it's a magical star trek 281 00:20:26.539 --> 00:20:29.740 like device that has all these APPs. If you remember, in the beginning 282 00:20:30.339 --> 00:20:33.339 what made the iphone go, they had this mantra that they use. They 283 00:20:33.380 --> 00:20:37.930 said, oh, there's an APP for that, right. And so when 284 00:20:37.970 --> 00:20:42.930 it became about APPs, not about email. They were done and so they 285 00:20:44.130 --> 00:20:48.009 lost not just a product battle, but the truth is the main thing lost 286 00:20:48.529 --> 00:20:53.240 was a battle for what the definition of a smartphone was, and when enough 287 00:20:53.279 --> 00:20:57.119 people agreed with apple, it was over. And, in point of fact, 288 00:20:57.119 --> 00:21:02.480 as far as I'm concerned, for email, the blackberry was and still 289 00:21:02.640 --> 00:21:04.069 is the better device. And I'm a I'm a big guy, I have 290 00:21:04.190 --> 00:21:11.230 big hands and using a tactile keyboard that I can feel with my thumbs is 291 00:21:11.910 --> 00:21:18.349 a much more effective way to do email than using a non tactile device where 292 00:21:18.660 --> 00:21:22.299 I would say probably one in four times when I hit a letter with my 293 00:21:22.420 --> 00:21:25.500 thumb it's the wrong letter. And that I was so in other words, 294 00:21:25.819 --> 00:21:32.180 from if the use case is email, blackberry crushes the iphone. But jobs 295 00:21:32.259 --> 00:21:37.289 and apple got the world to interpret what a smartphone should be as something meaningfully, 296 00:21:37.369 --> 00:21:41.529 and I'm going to use this word on purpose John, different than what 297 00:21:41.049 --> 00:21:45.690 the definition was before, and when enough people agreed with there what I would 298 00:21:45.690 --> 00:21:51.359 call category design of what a smartphone is, Bam it was over. And 299 00:21:51.440 --> 00:21:56.079 at that point there was nothing blackberry could have done. So, if someone 300 00:21:56.960 --> 00:22:00.509 was listening to you, kind of lay at those two examples and they are 301 00:22:00.509 --> 00:22:04.430 little skeptical. They might say something like well, those are consumer products and 302 00:22:04.470 --> 00:22:10.869 there's so much advertising and marketing and they're deserving such mass markets that it's it 303 00:22:10.990 --> 00:22:14.829 doesn't really apply. People don't buy phones based on speeds and fees. They 304 00:22:14.910 --> 00:22:18.819 buy for emotional reasons. It's kind of a aspirational purchase, you know, 305 00:22:18.900 --> 00:22:21.859 for an Iphone, especially when they're, you know, nearing a thousand dollars. 306 00:22:22.259 --> 00:22:23.339 But again it's skeptical. Person might say, well, but in the 307 00:22:23.380 --> 00:22:27.259 BB space people are more rational, they are doing product research, they have, 308 00:22:27.819 --> 00:22:32.650 you know, committees who are buying these these products and services and there 309 00:22:32.730 --> 00:22:36.809 are taking a more thorough, objective, kind of measured look at what the 310 00:22:36.890 --> 00:22:40.809 capabilities of each product is. Now I know how you're going to tell me 311 00:22:40.849 --> 00:22:44.599 that's not true, but I want to hear why that's the case and why 312 00:22:44.680 --> 00:22:47.839 that skepticism is kind of unfounded. Well, the first thing I'd say is, 313 00:22:47.920 --> 00:22:52.440 if you think that be to be products are purchased based on any kind 314 00:22:52.480 --> 00:23:00.630 of analytics, any kind of objective RFP process, your eft. You're finished, 315 00:23:00.150 --> 00:23:04.589 because it turns out there's no difference between the way human beings by consumer 316 00:23:04.670 --> 00:23:10.190 products and be tob products and you could set up the biggest evaluation committee you 317 00:23:10.430 --> 00:23:17.299 want. Those evaluation committees are put in place to justify the emotional decision that 318 00:23:17.500 --> 00:23:21.220 is already been made, and if you don't think that's true, you're not 319 00:23:21.339 --> 00:23:23.700 going to have a very long or successful career in be to be marketing. 320 00:23:23.859 --> 00:23:27.049 That's just the reality of it, and I know that might sound harsh, 321 00:23:27.250 --> 00:23:30.690 but I've been doing this for thirty years. And here's the Aha. In 322 00:23:30.890 --> 00:23:37.369 every RFP situation, who would you rather be? The company responding to the 323 00:23:37.450 --> 00:23:41.119 RFP or the company that helped the company that? Excuse me, that the 324 00:23:41.480 --> 00:23:47.519 vendor who helped the customer write the RFP, because there's no such thing as 325 00:23:47.559 --> 00:23:53.119 an RFP that isn't meaningfully influenced by the agenda of a vendor of one sort 326 00:23:53.119 --> 00:23:59.630 or another, and that's because people already decide what they want to buy and 327 00:23:59.750 --> 00:24:02.829 then they use the RFP pro ascess to justify it and share. Are There 328 00:24:02.950 --> 00:24:07.470 Times where there's a frontrunner and the folks on the buying side think they're going 329 00:24:07.509 --> 00:24:11.019 to buy from company A and they end up buying from company B? Sure, 330 00:24:11.420 --> 00:24:14.299 but that probably happens less than ten percent of the time. They already 331 00:24:14.380 --> 00:24:18.099 know when the cycle begins. That's the first piece. The second piece is 332 00:24:18.619 --> 00:24:23.849 what category design is really about. It's about writing the RFP for the space. 333 00:24:25.769 --> 00:24:30.650 You're telling everybody if you want to buy, you know, this type 334 00:24:30.690 --> 00:24:33.210 of product or service, this is what you should be looking for. So, 335 00:24:33.410 --> 00:24:38.359 for example, Mark Benny off is arguably the greatest category designer of the 336 00:24:38.359 --> 00:24:44.400 last twenty years in the B tob space. When he started he was exactly 337 00:24:44.519 --> 00:24:48.640 the opposite of where the entire technology space was at the time. He said, 338 00:24:48.680 --> 00:24:52.119 don't buy it, rent it and don't run it in your data center, 339 00:24:52.480 --> 00:24:56.829 run it in our data center and just put your data about your customers 340 00:24:56.950 --> 00:25:00.549 and your and your salespeople in your forecast on our servers and will take care 341 00:25:00.589 --> 00:25:03.430 of that for you. That was a hundred eighty degrees away from where the 342 00:25:03.630 --> 00:25:10.539 category was. That man singlehandedly made the cloud happen because he taught the world 343 00:25:10.700 --> 00:25:15.619 how to think about computing in a completely new way and he designed a new 344 00:25:15.779 --> 00:25:19.539 category. He changed, he moved the world from the way it was to 345 00:25:19.900 --> 00:25:25.210 the way he wanted it to be. And that's what legendary category designers do 346 00:25:25.690 --> 00:25:29.809 and that's what legendary people do. On a sale by sale basis and if 347 00:25:29.849 --> 00:25:34.089 you're really smart, you move the entire market category from where it is to 348 00:25:34.289 --> 00:25:37.480 the way you want it to be. And that's what was required. And 349 00:25:37.880 --> 00:25:41.880 you can compete on speeds and feeds all you want, but if somebody else 350 00:25:41.880 --> 00:25:47.559 has tilted the design tilted the agenda, has a, and I mean you 351 00:25:47.640 --> 00:25:52.470 say these words on purpose, different point point of view about what you're what 352 00:25:52.670 --> 00:25:56.029 the carboningulator space should be, you will be blackberry, not apple, and 353 00:25:56.390 --> 00:26:00.950 that's just the truth and the data supports it. Two thirds of the economics 354 00:26:02.069 --> 00:26:04.900 go to one company. That's been validated by the Harvard Business Review. And 355 00:26:06.180 --> 00:26:08.180 Look, you can deny that all you want, and I wish you a 356 00:26:08.259 --> 00:26:12.460 lot of luck, but you're probably going to burn a lot of money and 357 00:26:12.619 --> 00:26:18.220 you're probably going to cause yourself a lot of hard a living inside that paradigm. 358 00:26:18.500 --> 00:26:21.410 And if that's what you want to go do, then you know you 359 00:26:21.490 --> 00:26:25.890 can go bang your head into that wall and legendary entrepreneurs will be busy designing 360 00:26:26.569 --> 00:26:30.009 what what we call the Magic Triangle, getting product company in category right. 361 00:26:30.650 --> 00:26:36.160 So you talked about this idea of designing a category and the economics of that 362 00:26:36.319 --> 00:26:40.759 and all the reasons why that's worth pursuing. So what does that process look 363 00:26:40.799 --> 00:26:44.400 like? You've been to this a few times yourself, having you over fifty. 364 00:26:44.480 --> 00:26:47.829 Yeah, yeah, so what does that kind of look like? We 365 00:26:47.869 --> 00:26:48.869 don't need to go through like a step by step, you know, a 366 00:26:48.990 --> 00:26:52.430 to Z, but like what are some of the big pieces that have to 367 00:26:52.549 --> 00:26:56.150 happen for category designed to actually be something that you're doing successfully? So the 368 00:26:56.269 --> 00:27:02.259 first question to ask yourself is what makes me, either as an individual in 369 00:27:02.339 --> 00:27:04.579 your career, or me as a company, or us, if as a 370 00:27:04.660 --> 00:27:07.299 company, depending on how you want to think about it. So what makes 371 00:27:07.420 --> 00:27:14.460 us different? And specifically, how do I think about a problem and therefore 372 00:27:14.660 --> 00:27:18.849 a solution in a different way? And so, for example, there's this 373 00:27:18.930 --> 00:27:26.329 company called go Joe Industries and they are the creators of a new category of 374 00:27:26.529 --> 00:27:30.720 soap that emerged about fifty years ago. Before that there was just what today 375 00:27:30.759 --> 00:27:36.400 we call bar soap, and they thought that was gross because it's nasty and 376 00:27:36.480 --> 00:27:41.440 I could be full of hair and full of dirt, and so they reimagine 377 00:27:41.640 --> 00:27:45.390 the problem called how do I clean my hands without having to deal with a 378 00:27:45.910 --> 00:27:53.470 Yucky, gross bar of soap, and go Joe Industries therefore created liquid soap, 379 00:27:55.029 --> 00:27:57.390 a new category of soap, and then repositioned, as a result of 380 00:27:57.470 --> 00:28:03.539 that, traditional soap as hand soap or bar soap. Fast forward to the 381 00:28:03.619 --> 00:28:07.099 mid S, many decades after they had done that. By staying focused on 382 00:28:07.339 --> 00:28:11.700 the problem, that is to say, how do I want to think about 383 00:28:11.779 --> 00:28:17.130 cleaning my hands, they tilted the agenda one more time. They said, 384 00:28:17.170 --> 00:28:22.369 HMM, the problem with liquid soap is I need water. So how do 385 00:28:22.450 --> 00:28:27.039 I wash my hands? How do I get my hands clean with in the 386 00:28:27.160 --> 00:28:33.400 absence of water? and Go Joe Industries created a product that we now all 387 00:28:33.480 --> 00:28:41.119 know called Purel and a new category called hand sanitizer. And that was in 388 00:28:41.200 --> 00:28:44.309 the mid to late Hind Hes, and it prior to the mid to late 389 00:28:44.670 --> 00:28:48.029 S. nobody was walking around going hey, John, I got this big 390 00:28:48.190 --> 00:28:52.670 problem called hand sanitization. Nobody thought about that, nobody zero. There was 391 00:28:52.750 --> 00:28:57.220 no there was no box on the wall of every hospital in the world was 392 00:28:57.339 --> 00:29:02.259 squeezy stuff coming out of it to rub on your hands. There were there 393 00:29:02.259 --> 00:29:04.700 were no mom's walking around with strollers with a tub of this stuff that they 394 00:29:06.059 --> 00:29:10.650 bathe their baby and any time today right. And so my point is this 395 00:29:11.170 --> 00:29:15.289 go Joe Industries, by continuously focusing on the problem called how do I clean 396 00:29:15.410 --> 00:29:18.130 my hands, and how do I clean my hands in what you and I 397 00:29:18.250 --> 00:29:26.480 today would call multiple use case situations, have continuously done category design around their 398 00:29:26.599 --> 00:29:30.720 product innovation, and now there's not a parent in the world that wouldn't have 399 00:29:30.920 --> 00:29:34.279 this stuff on them to clean their baby right and so that's really the point. 400 00:29:34.400 --> 00:29:40.750 The point is legendary companies stay focused on the problem, stay focused on 401 00:29:41.269 --> 00:29:45.670 how they want to address problems in different ways, and when the world sees 402 00:29:45.710 --> 00:29:48.309 the problem the way they do, then the world wants the solution and the 403 00:29:48.470 --> 00:29:56.859 big marketing a HA is. They don't market their product. Legends market the 404 00:29:56.220 --> 00:30:02.619 problem because they understand the bigger, the more urgent, the more strategic the 405 00:30:02.700 --> 00:30:07.059 problem, more time, money and energy people will apply to solving that problem. 406 00:30:07.369 --> 00:30:10.329 And if you're the company setting that agenda with what you could think of 407 00:30:10.410 --> 00:30:12.650 as a point of view, then you're going to be the company that is 408 00:30:12.769 --> 00:30:17.650 the category designer. And if you can pull off all three components, product, 409 00:30:17.690 --> 00:30:21.089 company in category at the same time, Bam. That's how you get 410 00:30:21.130 --> 00:30:25.319 to be Cisco. That's how you get to be what's APP that's how you 411 00:30:25.440 --> 00:30:30.160 get to be go Joe Industry. Okay, well, that reps up part 412 00:30:30.279 --> 00:30:33.279 one of our conversation with Chris lockhead. If you enjoyed learning from Chris, 413 00:30:33.480 --> 00:30:37.509 then you absolutely need to look at for part two, because when we come 414 00:30:37.549 --> 00:30:41.789 back we'll hear Chris tell us why he believes Pepsi's attempt to unseat Coke as 415 00:30:41.829 --> 00:30:45.990 the category king is one of the dumbest marketing efforts ever. Will Hear What 416 00:30:47.150 --> 00:30:51.099 Picasso can teach marketers about the importance of being different, and we'll hear a 417 00:30:51.140 --> 00:30:55.140 Chris explain why trying to convince people that you are better than something else can 418 00:30:55.180 --> 00:30:59.579 actually work against you. Thanks for listening today. I'm John Rougie and I'll 419 00:30:59.579 --> 00:31:02.980 see you back here shortly for part two of our interview with Chris Blockhead. 420 00:31:06.329 --> 00:31:10.529 We totally get it. We publish a ton of content on this podcast and 421 00:31:10.650 --> 00:31:12.730 it can be a lot to keep up with. That's why we've started the 422 00:31:12.809 --> 00:31:18.680 BDB growth big three, a no fluff email that boils down our three biggest 423 00:31:18.680 --> 00:31:22.880 takeaways from an entire week of episodes. Sign up today at Sweet Phish Mediacom 424 00:31:23.559 --> 00:31:27.759 Big Three. That sweet PHISH MEDIACOM Big Three