The Jason Maynard Software Hour: Christopher Lochhead Play Bigger
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This document discusses category design and how creating new categories can increase the odds of success for technology companies. It argues that the company that designs a new category is best positioned to dominate that category. Examples are given of "category kings" that have taken large shares, 70-80%, of the market cap in their categories. Data on the growth rates and market caps of successful technology companies is presented, showing that winning companies are growing their market caps much faster now than in the early 2000s. The document concludes by emphasizing the importance of having a clear category strategy and being an evangelist for that category.
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The Jason Maynard Software Hour: Christopher Lochhead Play Bigger
- 1. 0 The Jason Maynard Software Hour The Greatest Technology Conference Call Ever.
- 2. Category Kings Why One Company Takes All Economics Al Ramadan Dave Peterson Christopher Lochhead
- 3. Our goal is to give you a new lens to increase your odds.
- 5. “We make shit and sell shit and everything else is bullshit.”
- 7. Category Design The discipline of creating and monetizing new markets. Category Design Category King
- 8. $3.33 12 pack $0.27 per 12 oz can $19.98 12 pack $1.67 per 1.93 oz bottle Not an Accident.
- 9. Everything we believe about the value of any given category of product/service we’ve been conditioned to believe.
- 10. Category Design Increases The Odds • Customers need new categories as mental tags to organize new products in their minds • Before customers care about what a new product does they have to understand what problem it solves • Categories create hierarchies of value • Must have • Nice to have • Not interested Condition The Market.
- 11. The company that designs the category, is best positioned to dominate the category.
- 12. Category Kings "If the category is big enough and the category king is dominant enough, current valuation is almost irrelevant. The key to making investment decisions is understanding category potential and the ability of the category king to define, develop and dominate the space over time," Jason Maynard Managing Director Wells Fargo Securities
- 13. 12 The Odds Less than 1% of VC-backed technology companies are ever worth $1B or more. Play Bigger Time To Market Cap Report
- 14. Since 2000 the United States has produced only 83, $1B+ market cap technology companies. Play Bigger Time To Market Cap Report
- 15. Winning technology companies are growing in value almost 3X faster now vs. the early part of this century. Leading consumer tech startups are growing market cap at more than $600m per year. Leading enterprise companies are growing market cap at more than $100m per year. Play Bigger Time To Market Cap Report Survival of the Fastest
- 16. Since 2000, Play Bigger TTMC 100 companies created over half a trillion dollars of market cap. Play Bigger Time To Market Cap Report
- 17. Category Kings take 70-80% market cap of their space.
- 18. Tech companies increasing market cap by $1 Billion or more per year. We Discovered 11 Super-Unicorns
- 19. # Company name Market Cap ($Bn) TTMC Velocity ($Mn / Yr) Company Age (Yrs) 4 Snapchat 10.0 3,765 2.7 5 Twitter 22.4 3,091 7.3 6 LinkedIn 28.5 2,195 13.0 7 Airbnb 10.0 1,589 6.3 8 Workday 15.3 1,527 10.0 9 Dropbox 10.0 1,377 7.3 10 Pinterest 5.0 1,144 4.4 11 Square 6.0 1,042 5.8 Play Bigger TTMC 100: 11 Super Unicorns 1 2 3 Facebook Market Cap: $214.6Bn TTMC Velocity: $19,513M/Y Company Age: 11.0 Uber Market Cap: $40.0Bn TTMC Velocity: $6,730M/Y Company Age: 5.9 WhatsApp Market Cap: $21.8Bn TTMC Velocity: $4.247M/Y Company Age: 5.1
- 20. Most people in our industry do not understand Category Design. Including most Category Kings.
- 21. “It turns out that it makes no sense to go head to head.” - Bill Hilf, Head of HP Cloud
- 22. Microsoft Store.
- 23. “We F*cked Up” “Why did the world need another Facebook” Chris Messina, Former Googler
- 24. Questions That Matter • Is there a category strategy? • S1 • Earnings calls • Website • Is the CEO an Evangelist for the category • Framing the problem • Creating category potential Vs. competing for existing TAM • Driving a “From – To” • Are the winning the TTMC race?
- 25. Thank You Christopher Lochhead Twitter: @lochhead @playbiggeradv playbigger.com © Play Bigger Advisors, LLC all rights reserved
- 26. © Play Bigger Advisors, LLC all rights reserved playbigger.com @playbiggeradv