Category Creation in the AI Era: GTM challenges and how to win
AI has enabled new product capabilities and business models, and everyone seems to be creating or defining a “new category.”
Creating a new category can help companies stand out, shape how buyers evaluate solutions, and establish an early market position to become a leader.
But creating a category isn’t just about positioning and coining a new term. It’s a full cross-functional effort to build a fundamentally different solution and create demand for a new way of solving a problem, which is a significant GTM challenge.
So when does a category-creation-focused GTM strategy make sense, and how do companies execute it successfully?
Pros and cons of category creation
In an established category, customers understand the problem, recognize the alternatives, and, most importantly, may already have an allocated budget. The GTM challenge is convincing the market why your product is the right choice or a better alternative.
In a new category, you often have to educate customers about the new approach and have a compelling enough product and narrative to make the case for purchase, even when there isn’t a specific budget allocated for the category. This comes before you can even explain why your product is the right solution.
The advantages:
Differentiation: Avoid direct feature-by-feature comparisons with established competitors.
Market influence: Shape category definitions, customer expectations, and evaluation criteria around your strengths.
Leadership potential: Become the brand customers associate with a new approach. Once the press, analysts, and buyers adopt the term, mentions of the category can reinforce your brand.
The tradeoffs:
Demand creation: Limited existing awareness or search intent means more investment in education.
Buyer and budget ambiguity: Customers may not have a clear owner or budget for the new solution.
Longer path to adoption: Sales teams must establish why customers should change, not just why they should switch vendors.
Unproven ROI: Without established benchmarks, demonstrating economic value can be harder.
No guarantee of category leadership: Just because you created a category and coined the term doesn’t mean you will win it.
Category creation offers the potential to define a market, but it also comes with the cost and responsibility of helping build that market.
What successful category creators can teach us
Successful category creators didn't just introduce new terminology. Each changed something fundamental about how customers solve a problem: the architecture (Databricks), the consumption model (AWS), or the operating model (HubSpot).
Databricks: Introduce a new architecture for an existing problem
Category: Data Lakehouse
Databricks helped establish the lakehouse category by highlighting the limitations of traditional data warehouses and data lakes, then introducing a unified architecture that combined their strengths.
Rather than positioning itself as a better version of either, Databricks introduced a new way to think about data infrastructure.
AWS: Change how customers buy and consume infrastructure
Category: Cloud Infrastructure
AWS helped establish the modern cloud infrastructure market by shifting computing and storage from hardware that companies purchased, provisioned, and managed to services they could access on demand and pay for based on usage.
AWS made the new approach easier to adopt. Developers could start small without major infrastructure commitments, experience the value, and expand usage over time. Reducing adoption friction helped accelerate demand for an entirely new consumption model.
HubSpot: Establish a new operating model
Category: Inbound Marketing
HubSpot didn't invent SEO, blogging, or content marketing. It combined these existing tactics into a cohesive inbound marketing methodology and built an integrated software platform to help businesses execute and measure it.
HubSpot positioned inbound in contrast to outbound marketing to establish a compelling reason to adopt the new approach, then invested in educational content, certifications, and community building to drive adoption.
The “new category” became a repeatable operating model that companies could adopt, measure, and invest in.
Clay: Turn existing capabilities into a new professional discipline
Emerging category: GTM Engineering
Clay brought data enrichment, prospecting, and sales automation together into a flexible platform for building automated GTM workflows, shifting teams from executing individual tasks to engineering repeatable revenue processes.
As AI enables more sophisticated GTM automation, a new way of working is emerging. Clay is helping define and lead this emerging category through the concept of GTM engineering.
Vibe coding: When the market names the category for you
Emerging category: AI-Powered Software Development
Unlike company-led category creation, vibe coding emerged organically from a new way of building software. As AI coding tools made it possible to create applications through natural-language prompts rather than writing code manually, developers and nontechnical users began adopting this approach.
Andrej Karpathy coined the term vibe coding in early 2025, and it quickly gained traction across developer communities and social media. The term gave a recognizable identity to an emerging behavior rather than introducing a concept through a company's positioning campaign.
Are you creating a category or just coining a new term?
With AI enabling new product capabilities so frequently, it's tempting to introduce new terminology to differentiate. But a new name doesn't necessarily create a new market.
True category creation changes how customers understand, evaluate, or purchase a solution. It establishes a meaningful distinction that extends beyond the company's own messaging and creates a different way for customers to operate and buy.
AWS changed how infrastructure is consumed and purchased.
Databricks introduced a new architecture for managing and analyzing data.
HubSpot combined existing tactics into a new marketing operating model.
Clay is helping establish a new way of organizing and executing GTM work.
Before leveraging category creation as a GTM strategy, ask:
Is the approach meaningfully different? Does it enable a new outcome or fundamentally improve how an existing problem is solved?
Are existing categories insufficient? Would evaluating the product within an established category obscure its core value?
Does it change how customers evaluate or buy? Are there new buying criteria, business priorities, or reasons to allocate budget?
Is the market adopting the concept? Are customers, practitioners, analysts, or competitors independently recognizing and using the category?
The distinction should extend beyond the company's own messaging. If the only thing that's changed is what you call the product, you're probably not creating a category. You're creating a new label.
What it takes to win customers through category creation
1. Establish a compelling reason to change. Explain what's broken or insufficient about existing approaches, what's fundamentally different about your solution, and why customers should act now. Start with the problem, not the category name.
2. Anchor the new approach in familiar business priorities. Connect the new approach to recognized customer pains, workflows, and outcomes. Buyers need to understand how it addresses problems they already care about.
3. Define the buyer, budget, and business case (prove ROI). Identify who champions the solution, who pays, and which existing budgets it might replace or expand. Translate the benefits into measurable ROI—revenue growth, cost savings, productivity, or risk reduction—so customers can justify the investment.
4. Build market understanding and credibility. Invest in education, thought leadership, customer evidence, practitioner communities, and third-party validation. A category becomes more credible when the market starts recognizing its value independently of your company.
5. Make adoption easy and prove value early. Reduce the friction of trying a new approach. Start with focused use cases, demonstrate tangible benefits, and use early customer outcomes to support broader adoption.
Turning product innovation into market demand
Category creation can be a powerful GTM strategy, but it's not inherently better than competing in or expanding an existing market.
Some companies deliberately define new categories. Others redefine established ones or become leaders in categories that emerge organically.
In AI, the winners won't necessarily be the companies with the newest category names. They'll be the ones whose buyers can explain the benefits and ROI to their CFOs.