Christopher Lochhead Follow Your Different™ 425 The Category Creation Formula: Why Most Business Strategy is a Trap with Kevin Maney & Mike Damphousse
Category Creation Formula Explained
- Category creation follows a simple formula: context plus missing plus innovation equals a new market category.
- Context means all changing forces around your audience; identify what those changes make missing or newly solvable.
Start With Context Not Product
- Start strategy discussions focused on your target audience's changing context, not your product.
- Use that context to ask what is now missing for customers, then design innovation to fill that gap.
Uber As A Classic Category Example
- Uber emerged when mobile GPS put ride availability in people's pockets, exposing the missing ability to reliably get a ride anytime.
- The innovation combined mobile location with an app to fill that missing and created a new category.
In a world flooded with content and incremental business strategies, standing out is more than a competitive advantage, it’s a necessity. Legendary Category Designers Kevin Maney and Mike Damphousse joined Christopher Lochhead on this week’s episode of Christopher Lochhead: Follow Your Different to dive into their latest thinking on category creation formula and the evolving marketplace.
Having helped shape the category design movement with their previous work on “Play Bigger,” Kevin Maney and Mike Damphousse now bring ten years of new insights, tools, and experiences to the table. Their journey reveals the potential for entrepreneurs and established leaders to move from simply competing in existing markets to creating new market categories entirely.
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The Category Creation Formula: Context, Missing, Innovation
A central development in Kevin Maney and Mike Damphousse’s new book, “The Category Creation Formula,” is a straightforward equation: context plus missing plus innovation equals a new market category. This reframing shifts the conversation away from finding conventional “problems” and instead asks, “Given the changing context, what’s missing for your target audience?” This subtle change is game-changing.
By looking at how context—like technology shifts, societal changes, or policy moves—creates new gaps, innovators can identify true market opportunities. The missing is not just a problem, but an unmet need that, when matched with the right innovation, creates something genuinely new.
From Incremental Competition to Defining New Possibilities
Traditional business thinking focuses on being better than the competition. Maney and Damphousse challenge this status quo with their method, which helps companies discover and fill what’s missing in the marketplace, rather than simply outperform existing players. Through hundreds of client projects, they have observed that when teams deeply engage with the formula, they often experience breakthrough clarity.
This clarity leads to designing not only new products but building entirely new categories—transforming strategy meetings into the birthplace of the next Uber or LinkedIn Sales Solutions. The emotional impact on entrepreneurs is real, often marking a visionary moment that aligns teams, sharpens belief, and sets the trajectory toward category leadership.
AI and the Future: Accelerating Category Creation
Artificial Intelligence is not just the latest innovation but a foundational change in context, similar to electricity’s impact more than a century ago. For category designers, AI accelerates both the identification of what’s missing and the speed at which innovations reach the market. As AI makes knowledge and execution close to free, what now matters is human insight: judgment about what new needs are emerging and how to fill those with breakthrough solutions.
With the adjacent possible expanding, individuals and small teams can create billion-dollar outcomes, making category design skills more critical than ever. Maney and Damphousse’s formula provides a framework to navigate this shift, empowering creators to define the future rather than react to it.
To hear more from Kevin Maney and Mike Damphousse on their thoughts about the Category Creation Formula and how it can help your business, download and listen to this episode.
Bio
Kevin Maney
Kevin Maney is a bestselling author and award-winning columnist. He’s also the co-founder of Category Design Advisors where he helps companies create and dominate new market categories.
He has been writing about technology for 30 years, has interviewed most of the tech pioneers you can name, and brings broad and deep context to Category Design conversations.
He is co-author of the book Play Bigger, and has been an A-list writer and thinker about technology for 25 years.
His other books include The Two-Second Advantage (a 2011 New York Times best seller), Trade-Off: Why Some Things Catch On and Others Don’t, and The Maverick and His Machine: Thomas Watson Sr. and the Making of IBM.
Kevin wrote a regular column for Newsweek, and has been a contributor to Fortune, The Atlantic, Fast Company and ABC News, among other media outlets. He was a contributing editor at Conde Nast Portfolio and for 22 years, Kevin was a
columnist, editor and reporter at USA Today.
Mike Damphousse
Mike Damphousse is a Category Designer, Investor, and Founder/Partner at Category Design Advisors. He brings over three decades of experience as a company founder, CEO, CMO, and startup advisor, with a track record in building and scaling B2B software companies.
Mike was the founder and CEO/CMO of Green Leads, which was acquired by Next 15 (LON:NFC), and served as CMO of Asteria, which IPO’d on the Tokyo Stock Exchange (TYO:3853).He is also a limited partner at Stage 2 Capital, a VC firm focused on early-stage B2B software startups, and has participated in ten exits through acquisition and IPO via Category Design Advisors.
Mike is a co-author of Play Bigger, the foundational book on category design, and leads workshops and keynotes at major tech conferences like Dreamforce and Inbound. He is also a co-founder of Category Thinkers, a global community for category designers, and a regular speaker on strategic category creation and market leadership.
Links
Connect with Kevin Maney!
Category Design Advisors | LinkedIn | Twitter
Connect with Mike Damphousse!
Category Design Advisors | LinkedIn | Twitter
Check out their new book, The Category Creation Formula!
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