Category Creation Insights with Scott Brown

[00:00:00] scott-brown_1_03-21-2024_100531: shift your perspective on category creation from winning by putting a new label on something to really about how are you creating a market conversation that you're going to have a dialogue that's a value add for both you, your customers, the pundits, whoever you're engaging,

[00:00:26] Salli: You're listening to the business leadership podcast with Edwin Frondoso.

[00:00:31] Track 1: Good morning. Good afternoon. And good evening biz leaders. Welcome to another episode of the business leadership podcast. I'm your host, Edwin friend dozo. And today. We have a special guests. Who is no stranger to the concept of category creation and market conversations. Our guest is Scott Brown. He's the partner and head of platform at Cervin ventures. He has over 20 years of experience in marketing, has worked with both startups and leading tech companies, such as Facebook, Google, and Cisco.

He has. Very unique insights into the marketing challenges companies face. At different stages in their growth. in today's episode, Scott we'll share. His thoughts, his insights on the longterm effort. And value of creating dialogues with customers and pundits. We'll delve into actionable advice for business leaders to shift their perspective on category creation and focus on creating valuable dialogues.

We'll also discuss the importance of grit and understanding that not all category creation efforts may succeed, but. Having this customer centric approach can still lead to high quality sales. And marketing outcomes.

So without further ado, here we go.

Welcome to the business leadership podcast, Scott.

[00:01:50] scott-brown_1_03-21-2024_100531: Thank you, Edwin. It's great to be here.

[00:01:52] Track 1: Scott with over 20 years of experience in marketing for startups and leading tech companies. How important do you think creating new categories is in today's business landscape?

[00:02:02] scott-brown_1_03-21-2024_100531: Yeah really great question. Actually, I'm getting a lot more of that again. Recently, this kind of notion of category creation kind of seems to go in cycles, maybe in tune with the economic cycles. I'm not quite sure, but I think 1st off, let's define a little bit of what we mean by category creation. It's where you're coming up with a new label or framework for some bigger problem and solution that is happening in, in society, in the economics or whatever.

Good examples are historic examples of that as think like HubSpot with inbound marketing or Airbnb with their original community driven hospitality tag, as they were trying to put a label on what they were actually doing. So people. in terms of its importance, I have to say that I don't think it's critical or important because that would imply that it should be on everybody's to do list.

Um, and I believe category creation is really lightning in a bottle. It's magical if you can pull it off. It creates a really defensible moat for your company. In terms of going forward, if you can pull it off, but it's not something that you can just project manage your way into, and it's not something you have to do.

it's something you can't necessarily force by just spending a lot of money or time on it. It's really about capturing a moment and requires in many ways the entire company, not just marketing, to get behind a new way of doing things because you're really talking about aligning some economic, social, political, cultural trend that's happening that people haven't quite figured out yet and then saying, here's the problem or area this is going to create the opportunity.

This is going to create 3 to 5 years from now. And then putting yourself in that context and saying, here's why we're building the things that we are, or here's why this company exists. And just watch, you know, this is going to play out in real time.

[00:03:53] Track 1: That's fascinating, Scott. For those business leaders who are now considering category creation per their companies. But feel hesitant. Is there a specific moment or sign they should look for? Or would you say it's more about adopting a category creation mindset? Rather than waiting for the perfect timing.

[00:04:14] scott-brown_1_03-21-2024_100531: 100%. Um, so one of my favorite, uh, quotes is from, um, uh, Dwight Eisenhower when he was planning the D Day invasion, which was plans are useless. Planning is everything, right? So the notion is your plans are absolutely going to fall apart, something will happen and it doesn't go the way you thought, but the art of an act of planning going through every little step of the process allows you to figure out what the levers are.

So that when things happen as they inevitably will, you know how to pivot and change, right? So I really believe that, category creation in some ways is a journey, not a destination so that going through the process and the planning and thinking across the organization will set you up to have it be more likely you can create a new category.

But even if you fail. Doing all these fundamental, basic things will yield high quality marketing and will yield high quality conversations with your customers. So you should absolutely do it, but you shouldn't be fixated that, Oh, I'm going to create the next moniker that everybody's going to use because it's unlikely that's going to happen.

That's the lightning in the bottle when it happens. And if any, any of you have ever been in a situation like that, you just know it. And it's like, it is electrifying, nine times out of ten, it's not going to work.

[00:05:39] Track 1: I'm curious, Scott, how do you connect specific data points to demonstrate success factors in a top-down approach? Are there key examples that effectively showcase these data points internally and externally. Confirming that a company is moving in the right direction.

[00:05:56] scott-brown_1_03-21-2024_100531: Yeah, so I guess a classic example from early on in my career as I worked at Cisco had the opportunity to work with John Chambers who was CEO at the time and He was trying to take Cisco from being known as a routing and switching company You know talking about essentially speeds and feeds of technology like it's getting faster getting cheaper all these things to What happens when everybody has access to the internet, right?

And so he actually, um, sponsored a study to try to measure the productivity impact of internet technologies on the U S economy. And then eventually we replicated the study in the EU and things like that. And his whole focus was, you know what? Um, it's not about Cisco. It's about how the internet is changing the way we work, live, learn, and play. And let me try to quantify that so we can have a conversation about what happens next. And because Cisco is kind of the backbone of that entire like internet, eventually you're going to buy more Cisco gear, routers, whatever, right? So, um, he spent a lot of money, a lot of time and a lot of his own, like personal attention to figure out the broader context and being able to provide those data points.

Of what was actually happening. And I remember, uh, I was very fearful because I was a junior analyst at this point and, uh, in a review session with John, which was very, you know, humbling. Um, I had found this data point in this big, um, market study. We'd done that, uh, customers who said that they, uh, re did their business processes before buying technology, or I'm sorry, after buying the technology saw like a 50 percent greater productivity enhancement.

Right. And I was very worried because it's like, Oh my gosh, this isn't saying great things about the power of technology. And John immediately jumped on and said, no, absolutely. This is perfect because I want to tell customers before you buy my gear, you need to go figure out how your business really runs and see if my gear is going to be right for you.

I'm paraphrasing. He had a very much more elegant way of putting it because that gave more credibility because one of the things I like to say about category creation is it can be self serving. But it can't be self centered. If you're the only solution to a problem, you've got a sales pitch and everybody's gonna discount it.

But if you're identifying this bigger issue, there are other players, you're willing to give some credit to other folks who might have other solutions, but you're now telling them why you have a better perspective, that's when I think you really begin to win.

[00:08:36] Track 1: Scott, you mentioned, I think, in the past, a passion for getting the basics done right in business. Can you expand on this philosophy and how it really ties into successful category creation?

[00:08:49] scott-brown_1_03-21-2024_100531: Yeah. So, um, that's been a mantra of mine for a very long time. Uh, it was probably from my Midwestern upbringing of just like doing the hard work and getting the basics done. But I think, you know, for, for the listeners here, like, one of the things that I think about is in terms of basics done right, a phrase that I was taught at, uh, taught when I worked in Google marketing, which is know the customer, know the magic, connect the two.

Right. And I really find that a lot of people skip over really intimately understanding, uh, your customer, the pain points, the emotional drivers, anything about them or everything about them, and then really deeply understanding the solutions you're building and how those two interact. And what magical moment is that going to, uh, reveal?

So for me, especially with category creation, going back to this notion So even if you, you don't coin the phrase that everybody uses, really starting with those strong foundational elements of understanding your market, your customers, what's happening, the pain points that they're going through and really connecting those dots will only make you a better marketer. And, you know, one of the things I find even in our own portfolio companies today is they say, Oh, we know our customers. Here's a 25 page overview of everything we know about them. And one of the things I've learned in my career is if you can't distill that down to 2 or 3 paragraphs. You really don't know your customer because you're just, you're throwing in a lot of filler and a lot of other things that may not be relevant.

You may not have distilled it down to your core insight about why they want to buy your product.

[00:10:32] Track 1: It seems challenging for some to distill their marketing approach into concise messages. Especially with varied philosophies. From social media to traditional trade shows. Given your background in integrated marketing and public relations. How have these experiences equipped you to guide business leaders and executives, particularly in startups? On their journey towards becoming a category creator.

[00:10:58] scott-brown_1_03-21-2024_100531: So I think my background has helped in a couple of different ways. Um, first off the foundation of all PR is narratives. a story that is interesting, compelling, hopefully newsworthy, that people really want to hear. Um, and so when you just mentioned, you know, social media and marketing and category creation and everything, really what you're talking about is storytelling, right?

And you've gotta be able to tell your story over and over again and distill it down to that really short, concise story that anybody can understand. Right. Um, and so when I talk about like basics done, right, that doesn't mean that right out of the gates, you're going to have that really tight story. A lot of this is an iterative process.

You've got to put down in my, in my words, you've got to put down on paper what you actually think your hypothesis, your initial thoughts, go out and test that. feedback, refine it, but continually write it down so that you can actually remember the journey you went through so that when you're ready, you can propagate that out into every marketing channel you can possibly think of. Right. And I think that's the second part of my background that it's helpful in this category creation context is my background is integrated marketing and marketing strategy. So how do I get, All of these channels, the sales channel, the executive communications, the PR, the website, um, you name it, client advisory boards, whatever, all like coalesced around a similar story. Like it's not going to be perfectly identical, uh, identical because you want to leverage the powers of each channel, but they all want to be from the same songbook. Uh, and so I have a, a notion, uh, that I've talked about over the years, like economies of content. We all know about economies of scale, that things get cheaper as you are able to produce more.

Uh, economies of content is, a lot of times, the content and the good story is the most expensive and difficult thing to create. And once you have that, you need to reduce, reuse, and recycle that across every single marketing channel. Because you need to hit your audience multiple times. People absorb information in different ways.

So you need to have it, you know, in long form, written content, video, podcasts, and keep telling that story. Because just about the time you're absolutely sick of saying the same messages is just about the time the market's going to wake up and somebody is going to say, Hey, that's interesting. I've never heard that before.

Right. And at that point, that's when you know your real work starts is when you start getting that feedback.

[00:13:44] Track 1: And I think there's also a feeling of, satisfaction at that point as well, because you have this conviction as a business leader, okay, this is what we want to do. And I think that feedback is almost like we did it right. It's coming.

[00:14:02] scott-brown_1_03-21-2024_100531: Well, and on that front, um, we were talking about, uh, this as we were getting started today. Um, I believe a lot of the value of category creation comes from people disagreeing with you. Right. Because as soon as you can get them to engage in your worldview and respond to your arguments. Then it becomes a true debate, right?

And it's a give and take of, well, that's interesting that you think this, I think something else, here's my data to play it out. What data do you have? Are you seeing something different? Right. And it becomes more of a, I won't say academic, but it becomes a good debate about the future and not just a competition of who's got the better product speeds and feeds costs, things like that.

It really elevates your brand. Thinking about what's coming next.

[00:14:55] Track 1: As I look into your current role now and your focus here as head of platforms at, uh, servant Ventures, I'm wondering as you built this out and thinking about category creation, do you see a role, with category creation or how you're helping some of the portfolio clients, go out and su succeed?

Right.

[00:15:18] scott-brown_1_03-21-2024_100531: absolutely. So a little bit of background serving ventures is a early stage B2B focused venture capital firm in Silicon Valley. So my role is post investment, uh, and really helping founders, um, get their companies going, help try to accelerate or bridge gaps that they may have. Um, and so. I wouldn't say category creation is top of mind for a lot of the companies we're working with at the seed and series A level, because at many points they're in that initial hypothesis and testing and product market fit.

Situation, right? Hopefully, uh, and if we've invested in them, it's likely they have identified some bigger trend category that they're driving into. But in those early days, they really needed to develop that proof point and kind of show momentum before they can go out and say, here's this grand division of what's happening.

So, you know, a lot of, uh, where I focus my help with the portfolio companies is getting those foundations in place. Right. And starting to build some of that, um, executive level vision that they can talk to early customers about and get them excited to say, Hey, we think the world is changing. We think it's going to evolve to something like that.

That's why we're building X. Don't you want to come along with us on this journey and learn? So, you know, again, I would say not every single company has to try to create a category. Because sometimes you're just doing something, you know, faster, cheaper, better than somebody else in the market. But I would say there's a lot of opportunity in tech still that as we think, see things like AI, which everybody's talking about today, you know, AI has been around forever, but there is a moment right now due to some of the innovations and whatnot, that it's unlocking all this potential.

What happens next? Right and there are people building great products and great technology, but there are also people out there saying okay Here's where how work will change. Here's how education will change in the future and that's the opportunity for category creation

[00:17:25] Track 1: Yeah, it's I mean we're definitely in exciting times especially with the advent or at least the commercialization and the AI coming out there and I assume there's a lot of companies that Existed before chat GPT, but you know these these Lightning strike is happening in those who are set up properly.

It's happening and people are coming in to do it faster, cheaper through very specific categories as well. Um, I'd love it if you could share, uh, any, you know, any exciting updates, milestones, even product launches, um, at Servant Ventures that, uh, that highlight your focus now.

[00:18:05] scott-brown_1_03-21-2024_100531: Yeah, um, nothing specific related to category creation. We've got, um, 43 plus portfolio companies doing amazing things. Um, but kind of circling back to what you were talking about with AI and some of what's going on. Um, you know, I'll highlight one, uh, product launch that happened recently. We have a company called Wevo, uh, W E V O and they do online, um, user testing, uh, for product UIs and mobile UIs and things like that.

Um, and initially it was, Essentially, how do you do a faster and cheaper and better focus group? And how do you really get feedback from your customers on whether a website UI is working or not, which is by itself a really big deal. Um, because if you think about it, there's like a, even in just say e commerce, which is a 9 trillion business, it's, it's estimated only about 10 percent of website UIs are tested.

And so. Imagine what would be able to happen in the better user experience and potentially greater revenue companies could get if they tested every design. Well, that's Wevo's core business, right? Um, with the advent really of, uh, easily accessible generative AI, they've now pivoted and launched a product called Wevo Pulse where companies can.

Uploaded design and run this AI model against Wevo's tens of thousands of hours of other tests and get immediate like directional feedback on what does the AI think about this design based off of all these other interviews that they've, uh, that Wevo's conducted over the years. And it just makes it that much faster and easier for marketers, for product people to test a whole bunch of ideas.

Or ideas that they didn't have the time or money to run a big study on, but like they can get that directional feedback. And in many ways, that's translating into kind of category creation, because now what happens when you can give this tool to everybody that used to be locked away with a UX UI team, and it can run in a matter of minutes, not weeks.

Right. And so we haven't gotten down to the point of like talking about category creation, but that's the kind of unlocking. lightning in a bottle moment when you're like, Hey, something different is happening here. What does this really mean for UX in the future? You know, does it move away from being kind of a monolithic organization function to now everybody's a UX tester and everybody needs to understand kind of the basics of UX?

I don't know, but you know, those are the things that we're starting to talk about.

[00:20:42] Track 1: I mean, I, I love that just because I've been a number of different projects where the, you know, just the user acceptance testing is so long and slow and I'm like, so there should be an AI for this. Here we go. So those who are listening and they're in the UAT space, check out the show notes. We'll definitely put that up.

We'll put that link in there as well.

[00:21:03] scott-brown_1_03-21-2024_100531: But so you've experienced this, right? Like think how your life would be different if you could test 50 designs and narrow it down to, okay, we're really gonna, you know, put these three or four out there for true hardcore AB testing or whatnot. Like how would the world be different for you?

[00:21:19] Track 1: So I mean, you'll be, we should be putting out products every other day,

[00:21:24] scott-brown_1_03-21-2024_100531: Right. Or variations on products, or like, even again, from the marketing perspective, You know, let's be honest. I don't test every email, every landing page, every creative, like, and now why wouldn't I if the cost is low, it's quick to turn around, right? So, you know, it's, it's an exciting time.

[00:21:41] Track 1: It's definitely exciting time. I know, I know from some of the podcasts I listened to, we're in, we're in the phase of this adoption of AI that those who are on it are going to be uber, uber efficient until we realize what comes out of the other end. Right. Um, but until then, why not be efficient?

[00:22:01] scott-brown_1_03-21-2024_100531: Right. Well, and I think, you know, AI in itself as a category is really interesting because the true value from it is going to be when it's baked into everything and you don't even realize it's there. Right. Um, and so the really smart companies that we're seeing are the ones who are starting to talk about kind of what's next and not just, you know, slapping an AI label on something and saying, Oh, it's this much better.

Okay. What does that allow me to do differently?

[00:22:26] Track 1: What's the vision?

[00:22:27] scott-brown_1_03-21-2024_100531: What's the vision and great, you know, it's, it's the hot shiny object right now, but if you can't show how that actually changes the business value or what, uh, your customers getting out of it. It's not as interesting to talk about.

[00:22:42] Track 1: I'd love it if you could, just share some final thoughts, uh, any actionable advice that you'd give to the business leaders who are listening today.

[00:22:50] scott-brown_1_03-21-2024_100531: I think, you know, we've covered a lot of it. I would say, first thing I would say is shift your perspective on category creation from winning by putting a new label on something to really about how are you creating a market conversation that you're going to have a dialogue that's a value add for both you, your customers, the pundits, whoever you're engaging, um, And measure the value of those efforts based off the traction and the dialogue you're creating, not whether or not somebody says, Oh, you know, company X equals this new category you've, you've created.

Um, something else that we, we didn't touch on is category creation is a long term, uh, effort and requires a lot of grit. Like do not expect this to be an overnight success. Um, don't expect immediate results. You're playing the long game. Right. And that's why you need to spend the time up front with the basics done right to really figure out like, what is your unique perspective on the market? And therefore, what do you want to talk to people about? And then finally, and I hate to end on a downer note, but like, despite all of your efforts, most of these category creation efforts are going to fail. Right? But again, if you go through some of these best practices we've talked about, and you really focus on the customer and the dialogue, you're going to still turn out some high quality sales and marketing, and you can be proud of that.

That's still going to advance your company, whether or not you go down, you know, in history as, you know, creating the new phrase that we all talk about. So, I definitely encourage people to do it, but don't, you know, treat that as the end all, be all destination.

[00:24:28] Track 1: Scott, it's been a pleasure. Thank you for joining us on the business leadership podcast.

[00:24:32] scott-brown_1_03-21-2024_100531: Thank you, Edwin.

[00:24:32] Track 1: That's it busy leaders. Thank you for joining me on another episode of the business leadership podcast. Don't forget to click the show notes in the app that you're listening to, to review any of the resources that we discuss and to connect with our guests, Scott Brown.

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Thank you again for your time and for being part of our community until next time. Have a 100 X day.

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Edwin Frondozo
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Edwin Frondozo
Host & Producer of The Business Leadership Podcast
Category Creation Insights with Scott Brown
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