Originally published on LinkedIn, 27 December 2025 · Updated 20 July 2026.

<!--edition--> A note on this edition. Republished from the original 27 December 2025 post with sources corrected and verified. The central number in the original — 76% — turned out to be real, but attached to the wrong claim and the wrong source. Correcting it makes the argument stronger, not weaker. The full record is in the series source ledger. <!--/edition-->

Writing this forced an uncomfortable question, and I will put it to you before I make any argument: are you building, or are you just competing?

Most operators cannot answer cleanly. They can describe their roadmap, their differentiators, their positioning against three named rivals. What they cannot do is state their category in one sentence without referencing someone else's.

That is the tell. If you can only define yourself relative to a competitor, you are renting attention inside a market someone else built.

Competition is a symptom of unclear thinking

This is the line from the original memo I would defend most strongly, and it is worth being precise about what it does and does not mean.

It does not mean competition is imaginary, or that rivals are irrelevant, or that you can wish a crowded market into spaciousness. Markets are real and most of them are crowded.

It means that sustained, grinding, feature-for-feature competition is usually downstream of a definitional failure. When you have not named the problem you solve in language the market recognises as yours, you inherit someone else's definition by default — and inside someone else's definition, you are permanently the alternative. You compete on price, speed, and shelf space, because those are the only axes the incumbent's frame leaves open.

Define the category and you set the terms. That is the whole move.

The number that matters

The economics here are not soft. They come from Play Bigger's Time to Market Cap research — an analysis of US-headquartered, venture-backed technology companies founded since 2000, narrowed from a raw set of 4,531 financial transactions to a final database of 974.

Within that population the researchers identified 35 companies as category kings: the definitional leader in each market space. The result:

| Era (founding) | Category kings | Everyone else | Category king share | | --- | --- | --- | --- | | 2000–2003 | $70.5bn | $28.9bn | 71% | | 2004–2008 | $303.9bn | $82.8bn | 79% | | 2009–2013 | $65.2bn | $25.8bn | 72% | | All eras | $439.6bn | $137.5bn | 76% |

[DIAGRAM 2 — insert here]

Thirty-five companies took 76% of the total market capitalisation created across the entire studied population. They were, as the report puts it, worth more than all the other companies combined.

Not 76% of revenue. Roughly three-quarters of all the equity value, concentrated in the companies that defined their categories.

Everyone else — every fast follower, every better-engineered second entrant, every well-funded challenger with a superior product — divided the remaining 24%.

Two things to hold about this number before using it. It is a decade-old snapshot: valuations were struck as of October 2014, and the study covers founding cohorts through 2013. And it describes value capture among companies that reached category-king status — it is silent on how many attempts failed. The 76% is the prize, not the probability.

So the strategic choice is not "should we compete hard or compete smart." It is:

Do you want 76% of a category you create, or a share of the 24% left in a category someone else already owns?

Stated that way, most roadmaps look like an expensive way to lose slowly.

Category creators don't play the incumbent's game

They do not fight for shelf space. They do not lower prices to win. They do not copy what works.

They build the shelf.

Every platform that matters today refused the market it was supposed to enter:

  • Spotify did not compete with iTunes. It replaced ownership with access.
  • Shopify did not compete with ecommerce platforms. It armed the merchants those platforms were disintermediating.
  • Notion did not compete with document editors. It dissolved the boundary between document, database, and workspace.

In each case the incumbent category still existed. It simply stopped being where the value accrued.

What category creation actually is

Three things, in order:

> Locked preview — full framework available in the complete version.

The old model

Build → Market → Hope

The new model

Define the problem → Name the category → Build in public → Own the conversation

The unfair advantage

Category creators have exactly one structural advantage, and it is not capital, timing, or technology.

Clarity of vision.

Everyone else is iterating. They are defining. Iteration optimises inside a frame. Definition sets the frame. Over any meaningful time horizon, the second beats the first.

What it requires is unglamorous:

  • A distinct point of view — one you will be wrong in public about, sometimes
  • Language that resonates and repeats
  • Consistency over years, not campaigns
  • The courage to be specific

That last one is where most attempts die. Specificity forecloses options. It tells part of the market that you are not for them. Generalists do not create categories; specialists do — because only a specialist will accept the cost of being narrow.

The market does not remember first movers. It remembers category definers. Google was not the first search engine. It became synonymous with search.

<!--annotation-->

Six months on — July 2026

The venture data from the period the memo was written makes the argument sharper than I made it at the time.

CB Insights' State of Venture 2024 — the most complete picture available when these memos were written — recorded global deal activity falling 19% year over year to roughly 27,000 deals, the lowest annual level since 2016. In the same year, AI captured a record 37% of all venture funding and 17% of all deals.

Read those two facts together and you have the clearest possible illustration of the clarity premium operating at market scale. Capital did not leave. It concentrated — overwhelmingly, into the one category with a legible name and an obvious frame. Everything without a category story competed for a shrinking remainder.

One honest caveat I owe the reader, beyond the two attached to the 76% above.

"AI" in 2024–25 was less a category than a gravity well, and a great deal of capital flowed into companies whose category claim was a label rather than a definition. Some of that will not survive contact with the next funding cycle. Naming a category and being granted one by the market are different events, separated by several years of execution — and the Play Bigger data measures only the second. <!--/annotation-->

Create the category. Own the language. Define the future.

Sources

  • Al Ramadan, Christopher Lochhead, Dave Peterson & Kevin Maney, TTMC // Time to Market Cap Report (Play Bigger Advisors, LLC). Primary source for the 76% figure and the era-by-era table. Methodology: US-headquartered, venture-backed technology companies founded since 2000; 4,531 raw transactions reduced to a final database of 974; market capitalisations struck as of 19 October 2014; 35 companies identified as category kings. Aggregate finding: category kings captured $439.6bn of $577.1bn total market capitalisation across all eras — 76%. https://www.playbigger.com/time-to-market-cap-report
  • Al Ramadan, Dave Peterson, Christopher Lochhead & Kevin Maney, Play Bigger: How Pirates, Dreamers, and Innovators Create and Dominate Markets (HarperBusiness, 2016) — the book-length treatment of the same research.
  • CB Insights, State of Venture 2024 Report (published 7 January 2025). Findings cited: AI captured 37% of venture funding and 17% of deals in 2024, both all-time highs; global deal volume fell 19% YoY to ~27,000, the lowest level since 2016. https://www.cbinsights.com/research/report/venture-trends-2024/

<!--correction--> Correction note. The original 27 December 2025 post cited "76% of 2024 unicorns created new categories instead of competing in existing ones (CB Insights State of Venture 2024)." No such finding appears in that report, and category creation is not a variable CB Insights measures. The 76% figure originates in Play Bigger's category-design research, where it describes the share of market capitalisation captured by the category king — a different and considerably stronger claim. The citation has been corrected to its true source and the claim restated accordingly. See the series source ledger. <!--/correction-->

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