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Should You Create a New Category or Dominate an Old One?
Category Creation vs. Category Invasion: The Growth Strategy Showdown
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In startup strategy, few decisions are as defining — or as misunderstood — as the one between category creation and category invasion.
Should you try to create a brand new space in the market? Or break into an existing one with a sharper edge, better product, or clearer story?
Founders often glamorize the former (category creation) but underestimate the brutal reality that comes with it. Others try to invade a well-defined market, only to get buried under incumbents and noise.
So which strategy is right for your startup?
Let’s unpack both, explore real-world examples, and give you a framework to decide which to bet on.
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1. Category Creation: Build the Playground
This is the boldest move in the startup playbook. You’re not just launching a product — you’re naming a new problem, defining a new solution, and often educating a market from scratch.
Examples:
Salesforce created cloud-based CRM before SaaS was even a term.
HubSpot coined “inbound marketing.”
Gong pushed the idea of “revenue intelligence” instead of just call recording.
Pros:
You define the narrative. You set the terms.
First-mover advantage with long-term defensibility.
If successful, you become synonymous with the category.
Cons:
Extremely high marketing cost. You’re selling the product and the problem.
Adoption is slow; success often takes years.
Risk of being too early (or misunderstood).
Startup Stoic Tip:
If you're creating a new category, be ready to educate relentlessly. The market won’t “get it” until you teach it.
2. Category Invasion: Play in the Big Leagues
Instead of creating a new category, you enter a mature market — but with a twist. Better UX. More transparency. Smarter pricing. Or simply, a more focused brand.
Examples:
Notion invaded note-taking and productivity tools — dominated by Evernote, Google Docs, and Trello — with a unified, beautiful experience.
Zoom didn’t invent video calls. It just made them not suck.
Superhuman didn’t create email — it reimagined it for power users.
Pros:
The market already exists. Customers already understand the need.
Faster traction if your differentiation is clear.
You can piggyback off existing demand and behaviors.
Cons:
You need to stand out fast or risk blending in.
Incumbents may copy you or crush you.
Customers may see you as a “nice to have” instead of a “must-switch.”
Startup Stoic Tip:
Category invasion requires sharp positioning and visible contrast. If people can't instantly see what makes you different, you’ve already lost.
3. So… Which Should You Choose?
Here’s a quick framework to help you decide.
Choose Category Creation if:
You're solving a problem no one has defined clearly yet.
There's no existing market, but there’s latent demand.
You're funded (or scrappy enough) to play the long game.
You want to own a narrative, not just a product feature.
Choose Category Invasion if:
The problem is well understood, but the existing players are weak, bloated, or outdated.
You have a clear wedge — speed, price, UX, niche-focus, etc.
You want faster GTM feedback and early customer wins.
You can offer a 10x improvement in some dimension.
The good news? These aren’t permanent decisions.
Many great startups start as invaders and become category creators.
Slack entered team messaging (dominated by Skype, HipChat, and email). But it didn’t stop there — it redefined internal communication.
Figma entered design tools, but ended up shaping the “collaborative design” category.
Learn from this investor’s $100m mistake
In 2010, a Grammy-winning artist passed on investing $200K in an emerging real estate disruptor. That stake could be worth $100+ million today.
One year later, another real estate disruptor, Zillow, went public. This time, everyday investors had regrets, missing pre-IPO gains.
Now, a new real estate innovator, Pacaso – founded by a former Zillow exec – is disrupting a $1.3T market. And unlike the others, you can invest in Pacaso as a private company.
Pacaso’s co-ownership model has generated $1B+ in luxury home sales and service fees, earned $110M+ in gross profits to date, and received backing from the same VCs behind Uber, Venmo, and eBay. They even reserved the Nasdaq ticker PCSO.
Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.
4. Hybrid Strategy: Create a Wedge, Then Expand the Frame
Sometimes the best strategy is a hybrid:
Start with a narrow invasion.
Nail product-market fit.
Then gradually expand and reposition yourself as the leader of a new category.
This allows you to build traction and cash flow while still working toward long-term dominance.
→ Start as “a better X.”
→ Become “the only Y.”
Example:
Calendly began as “a better way to schedule meetings.”
Now, it’s trying to define “meeting lifecycle management.”
It’s Not Just the Category — It’s the Commitment
Whether you create or invade, what matters most is the clarity of your positioning and the depth of your execution.
Don’t create a new category just to feel original. Don’t invade one just because it’s easier. Either way, you’ll need:
A crisp POV on the problem
A memorable product hook
Relentless storytelling
In the end, the market rewards those who don’t just launch products — but those who build narratives.
More Inspirational Stories…
Until next time,
— Startup Stoic