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      Shifting Perspectives

      Why Innovation Won’t Make You the Category Leader

      If you’re in management, I’m certain you’ve heard and read about this buzzword a thousand times a day—innovation. Innovation is the key to category dominance. Just leap on the treadmill of coming up with breakthrough products and your dominance is...

      Why Innovation Won’t Make You the Category Leader

      If you’re in management, I’m certain you’ve heard and read about this buzzword a thousand times a day—innovation. Innovation is the key to category dominance. Just leap on the treadmill of coming up with breakthrough products and your dominance is secured. But is innovation, being a first mover in your category with a radically new product, the true path to category dominance? Will endless innovation keep you in the leadership position?

      What it takes to dominate a category

      The answer is no, according to Eddie Yoon, Christopher Lochhead and Nicolas Cole, in their Harvard Review Blog, “The Difference Between Being a First Mover and a Category Creator.” They’re the team that’s been writing about category creation for about a decade. Their research and analysis have revealed some very provocative realities about what it takes to truly dominate a category.

      Reaping the rewards

      It’s worth reading because the rewards they mention include far greater revenue growth and market capitalization growth.

      We discovered that Wall Street has rewarded Category Queens and Kings (which we define as companies that achieve this three-part flywheel) with $4.82 of market capitalization for every $1 of revenue, making category designers with a flywheel advantage five times more valuable than the typical company.

      Wall Street loves companies that wield flywheels. Find out why.

      https://hbr.org/2019/11/the-difference-between-a-first-mover-and-a-category-creator