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What category are you really in?

Today, I have a challenging question for you, one that can change the way you think about your product.

The question I invite you to ask yourself is: "Which category am I in?"

A shift in your perception, even without changing anything else, can alter your reality.

Reed Hastings, the CEO of Netflix, asked his team, "What business are we in?" They naturally answered, "The entertainment business." He responded, "No, we're in the business of remote controls. PlayStation, TV remote, or Netflix?"

Daniel Birnbaum, CEO of SodaStream, recounts that when he took on the role, he asked his management, "What business are we in?" They replied, "Kitchen appliances (home appliances), and we're leading in that category." SodaStream is, after all, a physical device that sits on the kitchen counter. Defining their category influenced everything, from the departments in which they sold the product (household appliances), to how they measured their market share, to their advertising and marketing strategies.

When Daniel took over, he stated, "We're mistaken. Our real category is beverages." This seemingly minor change had a massive impact because, while they may have excelled in kitchen appliances, in the beverage category, they were just a small fish compared to giants like Coca-Cola.

The perceptual shift led to tremendous growth, culminating in a $3.2 billion acquisition by PepsiCo.

So, I challenge you this weekend to think about your product and brand with the question from the beginning of the tip:

"Which category is your product in?"


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