Define Your Value Proposition: Four Strategies on Category Creation

I presented Apptio’s journey in creating a disruptive new category at Tech Marketing’s 360 conference. You can view my slides below.

Apptio is a high-growth SaaS applications company that gives technology leaders the facts needed about IT to make faster business-aligned decisions, improve efficiency, and communicate value. We are singularly focused on making the CIO of an organization successful by maximizing the value of the IT investment portfolio. As a career CMO, I’ve been part of some great organizations that sold great products. But at Apptio, I’ve been part of an enterprise that has fundamentally disrupted the way CIOs manage IT.

Market disruption is the very essence of category creation. It’s finding the intersection point between disruptive technology and a disruptive business model. This Harvard Business Review article states: Category creators experience much faster growth and receive much higher valuations from investors than companies bringing only incremental innovations to market.

Remember your iPod? Apple disrupted the existing music device market AND the music industry with the iPod and iTunes. Tesla is doing this now by redefining electric cars. Category creation is not about incremental design. It’s about defining a new product and experience customers didn’t even know they wanted yet.

Apptio utilized category creation to couple technology and business model disruption. Through the creation of Technology Business Management (TBM) we defined business processes, roles, and metrics that help technology leaders maximize the value from every dollar invested in IT. The TBM value proposition addresses a need that isn’t addressed in any existing technology category. In the absence of a category for applications that enabled technology leaders to run IT like a business - we went out and created one.

 

Apptio was instrumental in forming the TBM Council, a partnership of thought-leading and passionate CIOs, CTOs and other IT leaders who wanted and saw the value of TBM too. Today, the Council strengthens the TBM discipline through developing best practices of running IT like a business. Through creating the TBM category (which is vendor-agnostic), Apptio has become synonymous with empowering CIOs.

Category creation is exciting stuff for marketers. It is also incredibly challenging. I have been privileged to drive much of the category creation around TBM. Here are my four main strategies that my team has followed:

1. Create the playing field

When we conceptualized TBM, the IT industry was just starting to experience the changes that news headlines now love to perpetuate: “the CIO is becoming redundant” and “CMO budgets now overshadow CIO budgets.” Apptio was convinced that the role of the CIO wasn’t going away, but the negative narrative around IT stemmed from the lack of a CIO management system. Other C-level peers had management systems in their disciplines, the VP of sales had SalesForce and the CMO had Marketo. But the CIO didn’t have a comparable application that would help them make fact-based decision for enterprise. As a result, they weren’t able to manage IT costs and investments effectively, nor communicate their value to the business.

2. Find where category and demand creation intersect

Category creation is a value proposition that pays off over time. Apptio needed to underwrite and establish trust with IT leaders to have an opportunity to benefit from this investment. And we could only establish trust by having an authentic interest in serving IT leaders. Our goal was to fill the void in existing IT management approaches by better adapting business principles and processes.

3. Capture the innovators

Apptio created the TBM Council in 2008 with six forward-thinking CIOs. Many of these senior IT leaders understood TBM even before the category was created – it just didn’t have a name yet. They were living through it every day! With their guidance, the TBM Council transitioned into a nonprofit organization. We created a new community: these innovators shared their own TBM stories and how it impacted their companies. Building this community of leaders helped build trust not only in TBM, but also Apptio. My slides have more information on how we use iPads and other innovative ways to syndicate the powerful content our community created.

4. Tap into your innovators to lead the pragmatists

When we created TBM, only the most forward-thinking IT leaders were on board. As any highly-disruptive industry marketer will tell you, the majority of customers are pragmatists. Fortunately, the innovators lead the pragmatists. Today, Fortune 1000 IT leaders from around the world recognize the TBM Council and adopting the concepts in their organizations. The TBM Council has experienced an incredible growth trajectory, now 1,100 members strong. Through the TBM Council, Apptio closely interacts with our strongest customers and prospects, while the innovators in our community spread the word about TBM. Marketers today realize customer influence is all about developing a value interaction.

The most rewarding aspect of category creation for us is seeing how it empowers IT leaders every day to strategically partner with their business. The success of TBM as a category comes from making our customers wildly successful.

The TBM category creation journey is far from over. We learn more each day from our customers, our partners and the council. Passionate about joining us in this journey? We’re always looking for dynamic people to be part of our team! Check out job openings here.

How do you and your team try to disrupt the market? Share your plays, opportunities, and risks with me on Twitter, or in the comments section below.