Why Legendary Entrepreneurs, Innovators, And Creators Don’t Design Brands

It’s shocking how many MBAs, entrepreneurs, creators, and very smart investors prioritize the brand BEFORE the category.

Our name. Our logo. Our team. Our “mission statement.”

Well, here’s a fact: Categories make brands — not the other way around.

• Brand marketing is something we do to customers.
• Category marketing is something we do for customers.

Let's break down the difference.

Legendary Entrepreneurs, Innovators, And Creators Don’t Design Brands

They design new categories for their breakthrough products and business models to live within.

• No crowdfunding, no GoFundMe.
• No electric vehicles, no Tesla.
• No designer menswear, no Ralph Lauren.

Before you even think about branding, your company needs a category to market itself within.

This idea has become terribly misunderstood over the years, so let me clarify. You DO NOT want to market within an EXISTING market. Instead, you want to create a NEW and DIFFERENT category/market, which you now have free reign to market WITHIN.

And yet, many people put the brand before the category.

Ask any person on earth why Ralph Lauren was successful, and 99% of them will say the same thing:

“He built an incredible brand.”

But is that actually what caused his success? Or was the Ralph Lauren brand the result of his creating a DIFFERENT category? As we shared in the mini-book The Big Brand Lie, his success all started with his unique “wide” ties. He designed the first tie to break the mold of what a tie should look like for men — and the first tie that even remotely resembled having its own distinct style.

Ralph’s ties were different.

Our guess is that many people extol the value of “building a brand” as a path to success.

It’s as if sprinkling some kind of magic dust on your “brand” (changing the colors, the font, the logo design, etc.) is going to drive a breakthrough in growth. Or, even worse, “Let’s use big, all-encompassing, undifferentiated language to make ourselves appeal to everyone. Something like, ‘We are an authentic, purpose-driven brand.’”

We will live the rest of our lives wondering how branding is a solution to a lack of differentiation.

You will never overthrow the category leader by extending your brand into someone else’s category.

In 2009, one of the most well-known brands in the world, Microsoft, decided to take on Apple’s legendary in-store customer experience by launching The Microsoft Store.

By 2015, the company announced, “Today, more than 80 percent of Americans live within 20 miles of a Microsoft store, with more than 110 stores across the U.S., Puerto Rico and Canada.”

Look familiar?

Fast-forward to 2020, and Microsoft decided to shut the doors on the operation, “resulting in a pre-tax charge of approximately $450 million,” according to CNBC. That’s half a billion dollars spent trying to extend their brand into Apple’s category. “Microsoft even built a store on 5th Avenue in New York City, just blocks away from Apple’s iconic glass cube store.”

You can’t take your brand and stroll up into someone else’s category.

The Role Brands Should Play In Category Design

If brand marketing doesn’t work, then what’s a marketer, an executive, or an entrepreneur to do?

The answer is certainly not to come up with airy-fairy attributes in an attempt to “distinguish” the company, product, or service from identical offerings. Branding in the absence of category design is asinine. Instead, branding should be used in conjunction with the new and different category you are creating.

The category and brand have to come together in some meaningful way for the customer, consumer, or user.

For example:

• 5-Hour Energy: The category is energy shots. And the brand is “5-hour Energy.” The brand name reflects the differentiated category.

• Under Armour: The category is clothes you wear under your clothes when you’re being athletic. And the brand name reflects athletic undergarments.

• Lemonade: The category is insurance, which isn’t obvious at first. But the brand reflects the new and different business model Lemonade is creating within the insurance industry. When life hands you lemons…

When done successfully, your company’s branding efforts create the style guide for the category.

You can see this happening in plain sight when competitors start:

• Talking like you
• Looking like you
• Using similar features as you

For example, the insurance incumbent Liberty Mutual mimicked Lemonade by launching Lulo — a shameless doppelgänger. Check out the similarities in name, wording, font, iconography, look, and feel, which Lemonade tastefully noted in a company blog post.

Copycats only make the category bigger.

And as the category leader, you will capture the lion’s share of the economics.

So, if you are an entrepreneur, an executive, or a marketer, ask yourself this very important question:

What are you DOING with your marketing?

• Are you inviting a comparison? “We’re like everybody else, PLUS some more.”
• Or are you forcing a choice? “We are a different thing altogether.”

See what happens to companies who rely on brand marketing versus category marketing in the mini-book The Big Brand Lie: How Categories Make Brands & Why Brand Marketers Never Believe It.