Breaking the Category Paradigm

The ability to compete against existing players within the same industry is one skill. But the ability to create the category and design the market is a fundamentally different one. There is an important distinction.

Take Venmo, for example. The company launched at the start of a new era when next-gen companies began to embrace the mobile-first landscape, developing simple solutions for complex processes of the past and filling in the growing gap between customer expectations and existing service offerings.

Venmo’s original intent was to provide an easy way to send money back and forth online ­– a rallying cry against those awkward moments of having to ask someone to pay you back. Their goal was to combine the simplicity of cash without the burden of lugging physical money around or having to hunt for an ATM.

The idea of a “peer-to-peer mobile payment platform” stood out in the marketplace, but would the company be enduring? After all, this technology could eventually be copied. Fast forward to today: Competition has filled this previously untapped space – think Square Cash, Apple Pay, Zelle, Amazon Pay, Stripe Payments, WePay, Google, and others. Even banks are vying for a piece of the mobile app revenue stream that was once reserved for technology, fintech, and software companies.

Venmo broke the category paradigm by challenging the experience of a simple financial transaction. By creating a social network within the app, Venmo tapped into the next-gen consumer’s need for a quick way to manage money, while providing a voyeuristic view of how their closest friends spend/send money and allowing participants to post creative comments, skim activity, add to the conversation, and, ultimately, spend more time on the app. In the dull world of finance, Venmo positioned themselves as “The Social Network of Money” – a market positioning with a deeply entrenched point of difference, ripe with many future portfolio opportunities for growth.

What we can learn from Venmo: In order to present a real breakthrough in value – one that remains relentlessly relevant in the face of new competition:

1. Align with and accelerate cultural shifts

2. Create an environment with weak competition

3. Open up the world to a new way of thinking

It’s about creating energy. It’s about moving people. It’s literally about playing a different game.