On this episode of Lochhead on Marketing, our guest Al Ramadan talks about what’s at stake when it comes to category battles, how you can spot the category challengers who can become category kings and queens, and what they need to become category leaders that earn 76% of the economics.
There comes a time in every startup’s life, where they face an epic, typically 18-to-36-month category battle. As we reported in our first book Play Bigger, the company that wins that battle earns 76% of the total value created in the category as measured by the market caps for public companies and valuations for private companies. What that means is, in any space, one company earns two thirds of the economics, which makes that category battle, which is typically 18 to 36 months long, arguably the highest stakes game in business.
This episode will be available on both Christopher Lochhead: Follow Your Different and Lochhead on Marketing, because we think it is that important that everyone must hear about it. So without further ado, let’s dive into this dialogue.
Play Bigger: Looking back, and its impact today
Al Ramadan comes into the conversation bearing data about the businesses and companies we’ve observed when writing Play Bigger, as well as some new players that have achieve the same feat since then.
To recap, Al Ramadan and Christopher Lochhead wrote a book back in 2014 called Play Bigger, which talks about category design and how it can make you become a category leader in your chosen space. One of the things they’ve found out in the course of their research is that Category Leaders tend to corner 76% of the value of said space.
Though when they wrote Play Bigger, the world was nowhere near as digitized as it is today. So a lot of the research was based on tech companies back then. But now, as more and more categories are behaving like tech categories due to digital scalability and digital reach, these findings are becoming true for every category.
Category Kings to Category Leaders
Al Ramadan shares that he and his team looked into the 35 Category Kings that they have observed back in Play Bigger, and check on their current situation in the market sphere.
In Play Bigger, we originally published a set of research and tracked 35 Category Kings in the tech space and their market caps at the time were 465 billion and those same companies today are now worth 1.9 trillion.
“If you track what happened to those 35 kings, as we call them back then, between the year of 2014 to the year of 2021. You want to know what the numbers are? At the time in 2014, the entire pool of the 35 category kings were valued at 465 billion. They are now valued at 1.9 trillion. That is, they’ve created more than $1,000,001.5 in market cap and the annual for those people who care about this stuff like Investors and Financial people. The compound interest growth rate of those kings. Market cap wise, is 22.46%.” – Al Ramadan
Given this data, it begs the question of how many understand that this is the new dynamic, and how many entrepreneurs and marketers still think that it’s a big leap of faith to follow.
To hear more from Al Ramadan and how Category Kings can become legendary Category Leaders, download and listen to this episode.
Bio
Al Ramadan is a co-founding partner of Play Bigger Advisors and coauthor of the book, Play Bigger. He also co-founded Quokka Sports, which revolutionized the way people experience sport online.
Al then joined Macromedia and Adobe, where he spent almost ten years changing the way people think about great digital experiences. At Adobe, Al led teams that created the Rich Internet Applications category and helped develop the discipline of experience design.
In the early ‘90s he applied data science to Australia’s Americas Cup — an innovation in sports performance analytics. His work in sailing led directly to the idea for Quokka. He lives in Santa Cruz, California.
Links
Connect with Al Ramadan!
Lochhead on Marketing