The challenge of creating a new category

One of the hardest things to do as a startup is to create a new category. Bloggers and press have a natural tendency to “pigeonhole” – to group startups into cleanly delineated categories, and then do side-by-side comparisons, comment on the “horserace” between them, and so forth.

At my last startup, SiteAdvisor, we were at first consistently pigeonholed as an anti-phishing toolbar, even though what we did was help search engine users avoid spyware, spam, and scams, which (for various technical reasons) had almost no functional overlap with anti-phishing toolbars. My co-founder at Hunch, Caterina Fake, had a similar experience at Flickr. Early on, people compared Flickr to existing photo sharing websites – Shutterfly, Ofoto, SnapFish - and found Flickr lacking in features around buying prints, sending greeting cards, etc.

Pigeonholing is one reason startups should actually welcome direct competitors. It was only once a direct competitor to SiteAdvisor appeared that people started treating “web safety” as its own category (Walt Mossberg was the first one to legitimize the category with this article).

At my current startup, Hunch, being pigeonholed as a so-called Answers site is one of our main marketing challenges. Hunch is a user-generated website similar to Wikipedia except, instead of creating encyclopedia entries, contributors create decision trees that help other users make choices and decisions. For example, about 50 computer enthusiasts came together to create this decision tree about computer laptops that helps users with less expertise find the right laptop. Hunch gets smarter over time as more people contribute to it. So far, about 10,000 users have made 115,000 contributions to the site. Last month, our third month after launch, over 600,000 unique visitors used those contributions to make decisions.

Many of the initial reviews of Hunch accurately reflected that Hunch is trying to create a new category of website. Nevertheless, the tendency to pigeonhole Hunch as an Answers site remains. Answers sites allow users to ask a question and get back direct answers from other people. There are many Answer sites including Yahoo Answers, Mahalo Answers, Vark, Answerbag, and ChaCha. These are all excellent and useful services – but have as much to do with Hunch as Ofoto had to do with Flickr.

There is no easy solution to avoid being pigeonholed. All you can do is consistently, straightforwardly describe what you do, and then keep beating that drum over and over until the message gets through.

http://www.jsheth.net/ Speed

why would you say that Hunch is a new Category? Maybe I'm wrong, but in my opinion, I would categorize Hunch as an improvement upon something that is already been done. Definitely a new sub-category, but why would it be a whole new Category? It uses user generated content (originally comments) and uses an algorithm? to create suggestions?
What am I missing?

http://twitter.com/cdixon chris dixon

Well, sub-category or category – maybe its just semantics. I would say a category is something where the products work in similar ways and can be reasonably compared head-to-head to solve the same set of problems. In that sense, Hunch is a new category (or sub-category if you like).

http://twitter.com/mayanks mayanks

Ah !! How many times have I heard this phrase “isn't this similar to so and so”, when I have tried to explain some of my ideas. We are in some sense hardwired to pigeonhole some new concept that we are not familiar with in existing category, thereby missing the whole point.

Maybe it helps them understand the new concept through an existing category. But believe me once you do that you just cannot appreciate the new concept.

Interesting thought chris, can totally relate to it
http://www.uniquevisitor.net Jeff Pester

Contextual referencing is easy for everyone to process, ala “it's like Facebook meets Match.com”. Asking someone to create a mental picture of an unreferencable object or process requires a certain amount of imagination and/or creativity. Most people (VC's included) are neither imaginative nor creative, hence the need to describe within familiarity.

http://arnoldwaldstein.com awaldstein

Jeff, I agree but rather than 'describe with familiarity' I'd say 'position naturally'. Clarity of positioning and phrasing correctly capture more than a mound of explaining ever does. Apple explain almost nothing but positions and markets brilliantly.

I alway try not to rename or invent a category unless necessary. Education takes time and resources. If you can leverage an existing one, always better.

http://shanacarp.com/essays ShanaC

Goes back to asking a lot of questions and thinking out your strengths and weakness- how do you define yourself if you don't know what the right question to ask is?
I wonder if one of the right ways to pitch is to pitch the question, not the answer, and then lead people into the answer through your product by defining the category, aka the answer. It's hard though. You need to know what your product does well, and what it answers.

If I could borrow Hunch for a moment:
I reviewed Hunch, it is its own subcategory. It answers questions of taste, style, some of identity, and some of the moment decisions, that may or may not change and broaden your perceptions. It's mean to crowdsource conceptions of what people like through comparisons, and then reshape them slightly through decision trees based on other similar answers. It will not give you good life advice for emotional moments, or make you feel good about your decision.
Eg:
Hunch can tell you what kind of new breakfast food you will like. Or a different kind of date that you should try for a third date.
Or maybe what book to take on that three hour flight.

It can't resolve how you feel about whether you should get engaged or not. Or convert to a new religion.

Explaining this as a category is very difficult. Why would I need a product to tell me what book I need to read on a flight but doesn't explain to me whether I should join a certain gym to get over a fear of heights? Oddly- those quick decisions have small emotional components that make for huge timewasters, because of the stress involved. Having someone help you along quickly through them saves time. Without being able to understand the category/subcategory- you can't explain that having a decision tree saves time for certain decisions. (but not others.)

Just thinking about this in context to what you've been writing…
http://www.dantiernan.com/blog/ dantinpa

I liked Seth Godin's idea of figuring out your opposite to help people understand what you are trying to “be”.
Here is my blog post on the topic – with a link to Seth's original.

http://dantiernan.com/blog/?p=18
http://rafer.tumblr.com rafer

I didn't understand what hunch did until this post. Now that I've got some clue, I think it's tough to say whether it's a new category. IMHO Flickr wasn't. It's original limited feature set was just an MVP/Innovator's Soln that allowed it to crush the last generation of photo sharing sites. When compared to Flickr, the entire prior generation of photo sites suddenly sucked. Hunch may well just be the Answers site that makes the prior gen of answers' sites look suddenly crappy. That wouldn't be the worst thing.

What took me so long to understand the functionality was the home page. I realize that your personalization requirements makes the visual quiz critical, but there needs to be some promise of an emotional/intellectual reward for clicking a few times. Even the promise a compare/contrast to other users choices (i.e. the reward of polling widgets) would help.

http://www.cdixon.org chris dixon

Hi Scott – Yeah, we are working on the non logged in home page as we speak. It is cryptic.

http://thenoisychannel.com/ Daniel Tunkelang

I think that part of the problem is that people conflate problems and solutions. For example, if Hunch is a way for people to get their questions answers, does that place it in the same category as Yahoo Answers? But they, why not also include Google and consulting services? Clearly a meaningful category also constrains the solution space to a class of approaches.

For all that I've read about the distinct kinds of innovation, I think reality is never so clear-cut. The most extreme statement is for a company to say it is solving a problem you didn't even know you had–and which no one else has discovered, let alone tried to solve. That is truly category creation. But I think that even most “disruptive” innovation starts from a known problem, even if it frames it using a different objective function.

http://www.cdixon.org chris dixon

I agree. Hunch is a different solution to an age old problem. We think of our main competition right now as people going off and doing research themselves on, say, CNET.

http://shanacarp.com/essays ShanaC

Then Chris, you need to answer why there are sections that are extremely emotionally involved. Hunch has decision trees that give out relationship advice because of user input. While some are actually helpful (what kind of first/second date would be interesting?) others are not terribly helpful for the reason that a decision tree is not a useful tool to help people at discovering and expressing their underlying emotional patterns that are causing them to use a decision tree to begin with. Hunch doesn't answer to some of the emotional reasons to why we make even the most mundane decisions.

There is also the matter of crowdsourcing- do the decision trees change over time because people can see or not see the wisdom of the crowd- and do you weight the trees to prevent “bad” communal decisions from happening? There is a difference from deciding what I want for lunch and deciding who to vote for- and you could choose to be more or less paternalistic. (either side of the value coin frustrates people, because of how information and its presentation works.)

I like Hunch for buying a book, or cooking dinner. I just can't in good conciseness say use Hunch for some of the other questions like who to vote for…

http://www.cdixon.org chris dixon

Hi Shana
Like all UGC sites, the content varies from area to area. We built the system in such a way that it tends to get better over time but until the weaker topics are used more and built out the results can be hit or miss.

http://shanacarp.com/essays ShanaC

(Midterms) I know, I love Hunch for what it is. Especially the list formats.
I still wonder about it and many in its subcategory of UGC in terms of paternalism versus libertarianism. Hunch clearly could go more on the side of paternalism if it wanted to- it's decisions trees, and they can be weighted. Whereas Aardvark you probably are talking to a person (but who knows?). Very different conceptions of UGC, and it has very different potential meanings and outcomes for those who take Hunch's versus some other UGC site.

It still gave me the best blog site list though..

http://venturehacks.com nivi

Chris,

1. Why even create a new category? Entrepreneurs love to talk about new markets. Investors love to hear about them. This is a common entrepreneurial psychosis. You might do better by positioning the same product in an existing market. See Steve Blank's writings on market type: http://j.mp/zNFOj.

2. How do your customers describe Hunch? Your description of Hunch is a list of features. We can do better than “Beating the drum over and over again until the message gets through.” Users are a good source for positioning information. Even Steve Jobs does it this way: http://j.mp/2JXuv6.

What do you think?

http://www.cdixon.org chris dixon

Hmm, in my mind market != category. Category is a set of products that make sense being compared side to side, are constructed in similar ways, etc.

narendra

Oy. I feel compelled to maintain a bit of historical accuracy.

First, Flickr has made some enormous contributions to the consumer web. The two most notable for me are 1) popularizing API access to a core application and 2) the advent of “personal” marketing that made the brand approachable (and non-monolithic).

But, Flickr most certainly did NOT create a new category.

Webshots (which began online in 1996) is largely responsible for defining both the pure “photo sharing” vertical as well as ushering in the era of user generated content.

As one of the founders, we were widely distributing and encouraging pure online sharing of images well before digital cameras had even taken hold. In 1999 when we launched personal photo uploads, we chose to make the sharing of photos public by default. It was a fairly arbitrary decision but it was transformative.

By 2003, Webshots was the #1 photo sharing site on comscore and a top 20 media property with more than 50 million registered users–decidedly mainstream. I personally spent many of those years trying to convince photo industry analysts (even before the bloggers had arrived) that it was not about prints but about reach and engagement/activity.

Other than the gripe above, great article!
Pingback: Tweets that mention The challenge of creating a new category — cdixon.org – chris dixon's blog -- Topsy.com
http://phrenzie.com Sekou Murphy

Always interested in the line b/t what your customers say you are and what you think you are. I suppose that if data supports your view, then it's a matter of training customers to think of it that way (i.e., it's semantics). Otherwise, there's a fundamental misunderstanding of the service and it'll probably never reach it's full potential, since the business might be working on feature sets that won't be used, and the business won't generally react to customer demand..
http://phrenzie.com Sekou Murphy

I took Hunch for another spin. Have you gotten feedback on whether you should make initial recommendations after each question. I liked the concept, but in some cases, I didn't like answering a lot of questions in order to get an answer…any answer. It was like calling up the help desk and it making me go through 5 prompts b4 I say screw it, press “0″ for the operator, only to find out “0″ isn't an option (the worst).

btw – kinda like rafer, I thought i understand hunch, but not really, until this post. that's why i went back to it. really like the concept, tho.

http://www.cdixon.org chris dixon

Thanks for trying it. You can always hit “Give me the Hunch” which is kind of like the 0 button. Also we are working on new interfaces that let you peruse the results without answering questions ahead of time. I think those new interfaces will make for a better experience.

http://phrenzie.com Sekou Murphy

new interface should get 2 the issue. i saw “give me the hunch” but wasn't curious enough 2 click it. we ran thru this w/ our iptv site…something wasn't obvious/simple/dumbed down enough.

LukaBirsa

Our product – a eInk based device for hospitality industry – got constantly pigeonholed to iPhone due to similar device design and somewhat overlapping features (iPhone could serve the same purpose, just as any laptop, netbook, phone, handheld). Instead of fighting the comparison (which unavoidably crops up somewhere in the middle of the discussion about our product) we start off by pointing out the most obvious and popular “pigeonhole” and presenting our key differentiatiors (example: We are building an iPhone like device, with larger eInk screen and special features tailored to specific needs of hospitality,…). That kills two birds with one stone – people visualize the product (based on their experience of the “superior” product) and quickly understand why we our product shouldn't be pigeonholed with XY. Its actually beneficial to present our value preposition.
marytripsas

Excellent point! You might find my column in the NYT from a couple weeks ago interesting. I discuss how firms can (and should!) proactively manage what analogies people make to a new product/service. The link is http://www.nytimes.com/2009/10/04/business/04pr…

http://www.cdixon.org chris dixon

Very interesting article. Had I read it before I would have cited it here. Incidentally, I find the NYTimes probably the single worst culprit of pigeonholing startups.

stevepoppe

If blazing new ground, you can opt to go long form and fully explain your new category — in technology, this is often creates confusion — or you can use contextual references, a better way to go. Ultimately, it comes down to coming up with a good brand “Is-Does.” What a brand IS and what a brand DOES.
Pingback: The challenge of creating a new category | Igniting Startups - nPost
AndreaF

I think a category defines the user need, the market, not the features of the product. Maybe a sub-category. Hunch seems a different and better way of answering questions (e.g. which laptop should I buy?) but it's still in the Answers category. This is not necessarey a bad thing, mind you. Something completely new may not be understood and therefore ignored because of that.
http://www.victusspiritus.com/ Mark Essel

Second popular post down, 9/10 Chris. Overcoming early classification is something I hadn't even considered. My goal is to provide user search value, in as easy way as possible by leveraging existent or natural social sharing. The early monetization path is also transparent and documented: allowing personal advertisements to display relevant offers to users who opt in.

Since people learn through relative comparison I can totally understand how external perceptions must relate your business/project to something. Otherwise you're just too alien to relate to.
http://www.victusspiritus.com/ Mark Essel

Second popular post down, 9/10 Chris. Overcoming early classification is something I hadn't even considered. My goal is to provide user search value, in as easy way as possible by leveraging existent or natural social sharing. The early monetization path is also transparent and documented: allowing personal advertisements to display relevant offers to users who opt in.

Since people learn through relative comparison I can totally understand how external perceptions must relate your business/project to something. Otherwise you're just too alien to relate to.
Pingback: Tweets that mention The challenge of creating a new category cdixon.org – chris dixon's blog -- Topsy.com
Pingback: Respect the competition
Pingback: Follow Fridays – Chris Dixon and Hunch | Sweet Spot Strategy

Chris Dixon

The challenge of creating a new category