Category design thinking isn’t just something that VC-backed companies with unicorn aspirations can use. When applied correctly, the category design lens can expand your addressable market and open up new revenue opportunities with existing customers. Really, we are talking about the development of what Christopher Lochhead calls a “breakthrough product or service.”
And there’s no better example of this than bicycles.
In this quick post, I want to show you how the bicycle industry has consistently used category design thinking to sell more bicycles to more riders.
When A Bike Used to Be a Bike
I’m going to skip over the early period of bicycle evolution where things like gears, tires, and oh, pedals, were still being worked out. Instead, we’ll begin in the 1970s. Back then, if you were looking to ride a bike for fitness, you probably would have bought something that looked like this:
Pretty straightforward right? Pedals, a few gears, and some narrow tires to help you go fast. This kind of bike still exists today (we call them road bikes), just in an evolved form, like this $15,000 example from Specialized. They have one real job: to help you travel efficiently over long distances on smooth, paved roads.
Bicycle development could have stayed within this narrow definition of what a bicycle was supposed to do, but category design thinking changed that.
Mountain Bikes are the Ultimate Category Design Application
Back in the 70s, there wasn’t such a thing as a bike designed to ride off-road. So people like Gary Fischer and Joe Breeze started to take old “clunkers” (cruiser bikes with strong, heavy frames) and modify them to ride on trails. They were pretty crude, but they provided a way to ride on mountain trails.
Here’s what is important…
These new “mountain bikes” weren’t better versions of road bikes.
They were different types of bikes altogether. You wouldn’t upgrade to a mountain bike, you’d simply add one to your garage, alongside your old road bike. And if you were a bike manufacturer, this was great news. For people who already bought a road bike from you, you now had the chance to sell them a second bike.
And for people who weren’t attracted to road biking in the first place, a new customer base opened up.
Remember: category design thinking opens up opportunities to create new markets, not ways to compete for market share in existing markets.
Category Design Thinking Has Blown Up the Bicycle Industry
Mountain bikes were just the beginning though. Since then, the bicycle industry has leveraged category design thinking to create bikes for nearly every type of riding.
In the 1990s we were introduced to the downhill bike – a machine made for riding very fast over steep, rough terrain… as long as you didn’t need to ride back up.
Again, downhill bikes weren’t better versions of mountain bikes. They offered access to a different style of riding. In fact, most early buyers of downhill bikes already owned a traditional mountain bike!
I used to think that three types of bikes were plenty. But today, there are so many categories of bikes, that it’s almost hard to keep up.
- Hybrid bikes combine the riding position of a mountain bike with the efficiency of a road bike.
- Enduro bikes are basically downhill bikes that you can also ride uphill.
- Freeride bikes are made for tackling jumps, berms, drop-offs, and other obstacles.
- Trail bikes are general-purpose rides that are closest in spirit to early mountain bikes.
- Cross country bikes are made for racing (or capturing KOM times on Strava!)
- Gravel bikes are road bikes that you can also ride on (you guessed it!) gravel roads or light trails.
- The massive treads on fat-tire bikes let you ride on snow or sand with ease.
I’m leaving out a bunch of other categories, too. I’m not even sure how to categorize my own mountain bike! And yes, there are people out there who own bikes in every single one of these categories. Instead of spending a few thousand on a bike or two, some enthusiasts are spending tens of thousands of dollars to build out their bike collection.
Oh, and E-Bikes Are a Thing, Too
Despite all this development, I haven’t even mentioned the most dramatic development of all: e-bikes. Depending on who you ask, e-bikes are either a wonderful development or the worst thing to happen to cycling.
Like them or not, e-bikes have opened up cycling to a whole new market. Source: Seattle Times.Whether you prefer them or not, what matters is the e-bikes have opened up cycling to the largest new segment of all: people who need help pedaling, but still want to exercise.
Put another way: the millions of people who probably wouldn’t be cyclists otherwise. Now, there’s a category of bicycle designed to appeal to nearly every type of person.
Category Design Isn’t About Creating Trillion Dollar Markets, It’s About Creating New Opportunities
Here’s what I want you to take away from this.
Cycling is more than a century old. Without category design thinking, there would be a small niche of people who rode bikes to stay in shape, but that’s it. Instead, cycling is now more popular than ever, because all sorts of new categories of cycling are available.
As books like Play Bigger and The 22 Immutable Laws of Marketing have taught us, category design isn’t about creating the next mega-category, or having an “official” category named by an industry analyst group (more on this here). It’s about creating opportunities to be different. Opportunities to create new customers or to offer additional choices to existing ones.