How to Break Out of the Existing Market Trap

Christopher Lochhead, the renowned “Godfather of Category Design,” recently took the stage at the Constellations Connected Enterprise 2025 conference and delivered a blistering wake-up call to every business leader, entrepreneur, and innovator hoping to surf the current wave of AI disruption.

Far from celebrating the AI gold rush, Lochhead warned that almost everyone is about to repeat the same mistakes of the past, chasing after existing markets, adding AI features like “copilots” or assistants, and calling it innovation. Drawing from his decades of expertise and path-breaking research, He then laid out a blueprint for actually leveraging AI for exponential value: it’s about category design, not incremental improvement.

Here are three powerful takeaways from his masterclass that every forward-thinking leader needs to know.

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Chasing “Better” Dooms You to Mediocrity

Lochhead’s central thesis is as provocative as it is true: companies that use AI to make existing products just a little better are doomed to fail. He calls this the “existing market trap.”

Instead of designing the future, most businesses simply bolt AI onto their old offerings, thinking it will make them competitive. But “if your strategy involves simply bolting on an AI assistant or copilot, you’re making a pussy move and you’re fucked.” Lochhead points out that companies making this mistake are chasing a market that’s already been designed by someone else. And in those markets, 76% of all the value goes to the category king (think OpenAI with ChatGPT). The rest fight for scraps, regardless of whether their AI copilot is a little nicer, faster, or more user-friendly.

Winning is About Creating the New, Not Improving the Old

The path to massive value in the AI era lies in doing what legends like Sam Altman, Jensen Huang, and Steve Jobs did: creating entirely new categories that didn’t exist before. Lochhead illustrates this with both tech giants and quirky startups.

He jokes about how Liquid Death became a force in the water business not by making better bottled water, but by launching “canned water”; an entirely new way to experience an old product with legendary branding and a distinct point of view. The same lesson holds for technology: “Different wins, better loses.” Lochhead encourages companies to listen to the language they use; calling your new AI product an “assistant” or “copilot” puts it in the sidecar, not the driver’s seat. In contrast, declaring your invention as a new category not only reframes the problem, but magnetizes the future (as when OpenAI refused to call its core product a database, instead introducing the “large language model”).

The Courage to Create: Why Category Design Demands Boldness

Lochhead doesn’t sugarcoat the difficulty of this path. Category design requires courage: “Grow a set of balls,” he tells the audience when asked how to nurture a creator’s mindset. This isn’t reckless advice; it’s a recognition that in an AI-powered economy, the value of existing knowledge is collapsing toward zero.

The knowledge worker, as Peter Drucker defined it, is being replaced by the knowledge contained within AI itself. The only safe (and rewarding) place is at the edge, inventing net new knowledge and value. In other words, creating the future instead of merely extending the present. Lochhead challenges all of us: “Do you really want to spend the last however many years of your career making the status quo incrementally better? Or do you want to spend whatever’s left of your work life making a massive material difference?”

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