Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets - Al Ramadan, Dave Peterson, Christopher Lochhead, Kevin Maney

(Category Pirates)

If Play Bigger is for “Big E” entrepreneurs trying to invent the next Google, Niche Down is dedicated to “small e” entrepreneurs who want to create massively successful smaller, independent businesses.

Partial Excerpts (antilibrary)

Introduction: From Bad Tuna to Play Bigger

Al Ramadan, Christopher Lochhead, and Dave Peterson are kind of nuts. I mean that in a sincerely affectionate way. Over the past dozen years, they’ve forged a relationship with each other unlike any I’ve seen between three men

The whole company consists of just the three of them and their legendary ringleader Mary Forman

They don’t have an office, preferring to work in bare feet and board shorts at Christopher’s Santa Cruz, California, house with the hens out back, taking surfing breaks when the good waves roll in. They are refreshingly enthusiastic about everything and believe that there isn’t a sentence that can’t be made better by adding some version of “fuck” to it.

In the 1990s, Al, Christopher, and Dave wound up in Silicon Valley via separate, twisty routes. Before they succeeded, each of them at some point failed spectacularly—and their failures, to my mind, are a big reason why they know so much now. Or, as tech people might put it, the failures are a feature, not a bug.

the company Al founded, Quokka Sports

Quokka was founded to take sports data and creatively display it on a website so fans of sailing or car racing or Olympic events could experience the sport in a whole new, immersive way. Quokka got everything right about how data was going to change the way fans consume sports—but it did so ten to twenty years too early.

Al moved on to top positions at Macromedia, and then Adobe after Adobe bought Macromedia. While at Macromedia in 2001, Al first met Christopher and Dave

Scient. That company was a rocket of the dot-com era, at one point hiring two thousand people within thirty-six months. It made its money consulting to companies about how to do business on the nascent Internet. Christopher was the company’s chief marketing officer. Scient made the cover of Forbes magazine in 2000. Before the end of 2001, it was dead—a direct victim of the dot-com collapse.

figure out how to reposition Macromedia products

By 2006, both Al and Christopher had essentially retired. Dave was still at Coverity

Why the fuck are we doing this apart? This is nuts! You’ve got this skill, and I’ve got that skill. We really should think about doing this together

Christopher is the creative frontman; Al is the analytical business mind; Dave, as noted earlier, “gets shit done.

From all their years at the top of companies, they had put together the concepts behind what we call category kings and category design, as well as tactics such as the POV and lightning strike. This was the Play Bigger intellectual property that they took to their clients. They wanted me to not just document what they already knew, but help shape the ideas further and deepen their understanding through journalistic and data research.

He and the other guys truly hope this will be such a book for the next generation

1.  Creation Wins

What do Facebook, Google, Salesforce.com, Uber, VMware, Netflix, IKEA, Birds Eye, 5-hour Energy, and Pixar have in common?

The key to each has to do with creating, developing, and dominating new categories of products and services.

Category kings are all around us. They create entirely new categories of business, or entirely new ways of doing things

they play bigger than other companies.

Category kings are not a recent phenomenon. Before the 1920s, there existed no such category as “frozen foods.” Clarence Birdseye—yep, that was actually his name—created it

As he built his company, Birdseye realized he had to design and build the category itself, because before Birdseye, there was no ecosystem that would get frozen food from a factory to consumers, and no demand for frozen food because consumers didn’t even know they might want it. He developed freezer cars for railroads and sold rail operators on the idea. He developed freezer cases for grocers and convinced them that frozen food would increase sales. He even convinced DuPont to invent cellophane

Clarence Birdseye has more in common than you might think with the founders of Uber

On a snowy night in Paris in 2008, Travis Kalanick and Garrett Camp, in the city for a European tech conference, stood roadside getting wetter and colder as they tried in vain to hail a cab

Apple’s iPhone had been introduced less than a year earlier, changing the way we think about mobile technology and services

Uber made all of us aware that we had a taxi problem—and that the problem had a new solution. Uber did this through the way it designed the company and its service. It did this through its messaging to the public. And it did this through confrontation.

Within a couple of years, Kalanick, by then Uber’s CEO and public face, understood that he could frame an even larger problem that Uber could solve

what if, Kalanick asked all of us, fewer cars could serve more people? What if his service could get so big, reliable, and cheap that in many places using Uber could become more desirable than owning a car? He wanted to make “transportation that’s as reliable as running water,” he told interviewers. And, by the way, that transportation wouldn’t only move people around town—it could move anything. It could deliver stuff.

In the twenty-first century, new category kings are being founded all the time, and at a faster rate than ever

Sensity Systems is but one example. It started on a category creation path after serial entrepreneur Hugh Martin took over what was then a tiny company making LED lights

same voltage—five volts, DC—as computers, networking equipment, and digital sensors. That means that LEDs can essentially digitize light fixtures

lights can be embedded with sensors that pull in information about air quality, motion, sound, or weather. And since the lights can communicate over wireless networks, the LEDs can be networked together to share information or collect massive amounts of data

Martin and this team settled on a name for the category: Light Sensory Network, or LSN. Martin started evangelizing the category at the same time as he was building his company

Category Kings Defined

The most exciting companies create. They give us new ways of living, thinking, or doing business, many times solving a problem we didn’t know we had—or a problem we didn’t pay attention to because we never thought there was another way

They replace our current point of view on the world with a new point of view

disruption is never the goal. Creation is the goal.

Our term for the companies that create, develop, and dominate new categories is category kings

Category kings are the explosive and enduring companies that create great value over time—Amazon.com, Salesforce.com, Facebook, Google. They do this by opening up a category with vast potential—we use the term category potential—and set themselves up to take most of the economics of the whole category. Category kings, the data show, usually eat up 70 percent to 80 percent of the category’s profits and market value

The category king literally owns the problem it is solving. And for that reason, a category king is almost impossible to dislodge from its position in the category

Most category kings are once-in-a-founder’s-lifetime achievements. A rare few individuals have proven to be master category king creators. One of the best of all time, as you might imagine, was Steve Jobs

Elon Musk

Jeff Bezos

Seattle entrepreneur Rich Barton. He had a hand in founding Expedia, Zillow, and Glassdoor.

aren’t just a connected-age technology phenomenon

Chrysler introduced the minivan in 1983

Bob Pittman’s MTV and Ted Turner’s CNN were once category kings. Boeing created the category of jet airliner with its 707 in 1958

Sometimes category kings aren’t even a business, yet they define and develop something new in our way of life. Peter Drucker was the category king of management thinking. And of course as we’ve mentioned, there was Elvis Presley

IKEA

Skype

Atlassian

Alibaba

Flipkart

Category King Economics

In his 2014 book, Zero to One, super-investor Peter Thiel unequivocally celebrated monopolies, and made it clear that those are the companies he wants to invest in.

he’s describing category kings—the companies that take all the economics out of a category. Thiel goes on to say, “All happy companies are different: each one earns a monopoly by solving a unique problem

In Silicon Valley, we’ve watched venture capitalists (VCs) increasingly adopt a category king investment philosophy

it’s now apparent that one company wins big and dominates a healthy category, and the rest struggle, get acquired or perish. That means that as soon as one company appears to be the category king, the smart money competes to invest in that company, bidding up its value. That realization among investors is a reason valuations of new category kings spiked so drastically in the 2010s

Eddie Yoon, a principal at the Cambridge Group, in 2011 published a piece in Harvard Business Review titled “Category Creation Is the Ultimate Growth Strategy.”

Why is this happening with so much velocity now, especially since category kings have always been a part of the business landscape? The ubiquity of networks, cheap cloud-based distribution, and lightning-fast word of mouth through social media is intensifying a winner-take-all economy—especially when we’re talking about digital products and services

The leader, for example, increasingly has the best data. In today’s world, data is power.

6.  Mobilization: The Shit Gets Real Chapter

A lightning strike is an event meant to explode onto the market, grab the attention of customers, investors, analysts, and media, and make any potential competitors crap their drawers. It is the full concentration of the company’s resources on one high-intensity strike

Some of the best strikes hijack an event, like an industry conference or trade show, where a good number of the target audience will be gathered

The point is to identify the right moment, and think of the lightning strike in the way Hollywood thinks of opening weekend for a blockbuster movie

10.  How You Can Play Bigger

DESIGN THREE LEGS OF THE BAR STOOL AT ONCE: Okay, maybe it’s a triangle, but we always default to the bar stool metaphor. For a business, we maintain that it’s important to design a great company, product, and category at roughly the same time.

We think that’s good advice for individuals, too. Design yourself, what you can do, and your category together

Your value—however you want to measure it—is influenced by the potential market for what you do, your position in that market, and proof that you can deliver on your promises

You can’t be a category king in your career by winning the activities contest. Ten years of work is not necessarily ten years of experience. Think of your career as something to be purposefully designed

DEVELOP A POINT OF VIEW

Putting yourself through a POV exercise can be incredibly clarifying. How do you define who you are and what you want to mean to the world?