Intent-based outbound is the #2 investment area for growth teams this year. Everyone’s buying the same tools, using the same signals and automating the same outreach.

The brands finding an edge aren’t necessarily doing it with better tools. They’re capitalizing on their proximity to the customer and how they can spot things that competitors can’t.

“I found that the biggest returns from growth actually come from a deep intuition about what will work coupled with deeply understanding your buyer,” said Brandon Camhi, former VP of Marketing at Rippling, on the GTM Engineer podcast.

That’s different than signing up for Apollo and filtering by company size.

We’re also using signals at Recurrent to drive a lot of our growth right now. The signals we track look at historical market metrics from publicly accessible data combined with signals from the executive team at prospects that show they’re ambitious and progressive with technology. Everything is technically public. All sourced with Claude Code running daily checks.

That’s the inversion.

Most signal-based playbooks are built for mature categories where buyers know they have a problem and are actively shopping for a solution.

In emerging categories, your prospects don’t know they have a problem yet. The signals you need aren’t at the bottom of the funnel. They’re at the top to identify who is likely to be receptive to education, in order to one day be in the market to buy.

Here’s a framework to help you find them.

The Signal Inversion Framework

Prospects already know they have a problem and what solutions look like in mature categories. They’re shopping. The job is to intercept them or at least become part of their consideration set.

That signal doesn’t exist yet in newer categories. The prospect isn’t searching because they don’t know there’s something to search for.

That’s a much different question:

• “Who’s ready to buy?” ❌

• “Who’s about to have a problem they don’t know about yet?” ✅

That is the foundation of the Signal Inversion Framework. Instead of looking for purchase intent, we’re looking for the conditions that precede the problem so we can start the education process before your competitors even know the prospect exists.

1. Identify the Pre-Problem Signals

When Brandon Camhi joined Rippling, the company was doing what most startups do: blasting non-personalized emails and spending a little on paid ads. Only 10-15% of demos came from campaigns with any intent signal behind them.

A year later, that number was 60-70%. And when COVID hit and everything else went to zero, the only campaigns still producing were the ones driven by signals.

Good/bad news: the signals that worked weren’t sitting in a tool.

Camhi built Rippling’s signal engine by listening to Gong calls, talking to sales reps and studying what was true about customers before they became customers. He started from the destination and worked backwards.

You’re not looking for buying intent. You’re looking for the conditions, behaviors and situations that exist before the prospect realizes they have a problem worth solving.

The signal is not intent. It’s more like a precondition.

Test it: Look for patterns in the conditions that preceded awareness in your last 10 closed-won deals. You can include demographics, firmographics and psychographics but I’ve found that those can distract rather than aid the process. We’re looking for patterns more than criteria.

Lesson: The most valuable signals are indicators of inevitability. If X-> Y-> Z, we’re trying to solve for X.

Common misstep: Don’t confuse pre-problem signals with broader ICP criteria. “SaaS company with 200 employees” is a firmographic filter. A signal should tell you something is in motion.

2. Source Signals from Behavior

The standard data tools (Clay, Apollo, ZoomInfo) are powerful, but if you and your competitors are all pulling the same signals from the same vendors, those signals stop being an advantage.

In the best case scenario, they’re table stakes. More often, they’re distractions.

Kyle Poyar’s research reveals that intent-based outbound is one of the top investment areas in 2026. That means the signal commons is getting more crowded.

The edge comes from going up-funnel to where those platforms can’t see or don’t know what they are looking at.

At Rippling, Camhi listened to 3-5 sales call recordings every week in Gong. He discovered that:

1. Brand investment was systematically undervalued in attribution.

2. Prospects displayed similarities that were not visible in firmographic filters.

At Recurrent, our signals work similarly. We combine publicly accessible data that individually aren’t very meaningful, but together paint a picture of a prospect whose business trajectory makes our solution increasingly inevitable.

Test it: Take the pre-problem patterns from Step 1. Think beyond the obvious or readily available to answer these questions.

• What kind of quantifiable data could serve as a proxy for this condition?

• What combination of two or three of these, taken together, would give you high confidence that this prospect is approaching the problem your product solves?

• Which investors, advisors, AI companions, vendors or distant LinkedIn connections could help you find the data sources behind these signals?

Lesson: A proprietary composite doesn’t require proprietary data. It requires proprietary thinking about what combinations of public data actually mean something.

Common misstep: Teams often build composites that are too complex to maintain or too abstract to act on. It’s better to hone in on one signal that you’d bet money on.

3. Trigger Education

In a traditional signal-based workflow, the signal causes the output: email, LinkedIn DM, even direct mail like Rippling.

1. Signal: Buyer is ready

2. Output: Tailored pitch

For those of us building in emerging categories, the signal should be saying “this person is about to encounter a problem they don’t know about yet.”

The response needs to match.

1. Signal: Problem is emerging

2. Output: Helping prospect name or recognize the problem

It’s too early for the output of your signal to be a pitch. It’s only the beginning of an education process.

Test it: Map your signal triggers to ideal educational touchpoints. “When we see [signal], the prospect sees [educational content].”

Lesson: Companies that use signals to start educating will build demand that their competitors don’t even know exists.

Common misstep: “Education” doesn’t mean a generic drip campaign. Relevance is what separates education from noise.

Building Your Signal Inversion

The intent data gold rush is real. That’s because it works for companies in mature categories with known buyers and established purchase behaviors.

But if you’re in an emerging category, the standard playbook has it backwards. We’re looking for prospective learners who, with the right information, will become buyers.

• “What signals tell me who’s ready to buy?” ❌

• “What signals tell me who’s about to need something they don’t know exists?” ✅

Rippling’s story is valuable because the underlying principle can be adapted for you: Success came from getting close enough to the customer to identify what preceded conversion. Only then did they go on a scavenger hunt to find data to inform the signal.

That’s a path available to most founding teams willing to do the work.

Your prospects are out there. They just don’t know they need you yet. The signal is how you find them and education is how you earn the right to help them.

What it became is far different from how it started.

Clay didn’t start with a partner program. There were no tiers or certifications. For years, their entire community infrastructure was just a Slack channel they forced people to join.

The vibrant ecosystem sprouted and grew because of Clay’s approach. CEO Kareem Amin even told his team to engage with their product, customers and community like gardeners. “We’re nurturing growth, not directing it.”

I’ve spent dozens of hours studying Clay alongside Notion and Figma, two other brands with world-class customer communities. The big difference is that Notion and Figma are horizontal tools with massive addressable markets, and the lessons aren’t universally applicable.

Most of us are building brands that don’t fit that model. Clay’s playbook is more transferable because it built around a narrow ICP, and that constraint is actually what made it work.

At Recurrent, we think a lot about our customer community and I’d put it up against any other company our size. But ours looks like a seedling compared to Clay’s thriving forest.

After tons of research and years of lived experience, here’s the 4-phase sequence for knowing when and how to build an ecosystem for emerging products and services startups.

The Gardener’s Sequence

Most ecosystem case studies focus on the tangible outputs: Slack groups, ambassador programs, the templates. Less has been written about what had to be true about the product and the ICP before the community could form and compound.

That’s the gap this framework attempts to fill.

1. Prepare the Soil

Before Clay had an ecosystem, there was a constraint: a narrow user base with lots in common and incentive to learn together.

This wasn’t accidental. Clay kept a waitlist active even after scaling past millions in ARR. Co-founder Varun Anand said they dropped the waitlist at one point, but “one of the best decisions we made in the early days” turning the waitlist back on. It gave them the ability to be hyper selective about onboarding a narrow customer persona. Every customer had lots in common.

They also made a choice that seems borderline reckless: Clay stopped providing email support and web chat. The only way to get help was a public Slack channel. Every early customer was onboarded with a 30-minute Zoom call, and Varun wouldn’t let them off the call until they joined the channel.

This did three things at once:

• It limited the frivolous support requests since people were surrounded by 200 peers.

• It created a space for participation and collaboration among peers.

• It helped customers feel seen because everyone in the channel had similar challenges and the same goals.

The Slack channel organically evolved from a support channel to a peer group. Customers were learning from each other.

Test it: Imagine a room filled with only your most engaged users.

• How much do they have in common?

• Do they share enough context to help each other without your involvement?

• What would make them more likely to be collaborative vs competitive?

Lesson: A homogeneous early community is the soil that everything else grows from.

Common misstep: Don’t worry about community size here. Clay’s patience to stay narrow is what created the value that kept people coming back.

2. Spot the Organic Growth

Clay’s early ICP was agency owners. These people had clients, so they could pull through the product and Clay could grow with them. With their curated and narrow customer base, Clay was able to pay close attention to them and began noticing how they talked about the product:

1. Agency owners used LinkedIn to show off their creative Clay workflows and position themselves as experts in the emerging tech. Sharing about Clay helped the agency attract more customers, which helped Clay add more brands to its platform.

2. Power users went deep in private WhatsApp groups. GTM people wanted to learn with peers but did not want to share every trick publicly.

3. Slack users answered questions in the channel before the Clay team could respond.

4. People promoted themselves as “Clay experts.” If people could build a career on Clay expertise, those people would become motivated advocates with aligned incentives.

The infrastructure only works if organic energy already exists. The Slack threads, LinkedIn posts, WhatsApp groups, and self-appointed experts are only examples of signals that tell you the soil from Phase 1 is fertile.

Test it: Make a list of the places that people talk about your product or the problem that you solve. Social listening tools like Sparktoro or Google Alerts can be a good start, but they are not great at identifying uncommon or private channels. That’s where it’s helpful to talk to customers and query the collective wisdom of AI tools to flesh out your list.

Lesson: You can’t manufacture organic energy. But you can miss it. The signals are often in places that won’t show up in your dashboards.

Common misstep: Don’t interpret current customer silence as a signal of long term potential.

3. Feed What’s Growing

Clay founders (and an industry influencer early hire) started partnering with customers behind the scenes:

• Telling them about new features

• Sharing lessons to help them win new business

• Creating personalized content for them to share

Clay realized UGC is most powerful when people are creating something, because then they can share what they made. Since Clay is a tool for building workflows, it gave their audience of builders something to show off. The content wasn’t testimonials or reviews. It was “look what I built.”.

Clay spent “a considerable amount of time supporting our experts with their own marketing campaigns, from promoting new business lines, to webinars, to one-off promotions,” the Clay team explained. They even use internal software to help creators design personalized videos about Clay features in their own voice. “At the end of the day, we want to help them look legit because if they grow, we grow.”

That last line is the governing principle of this phase. You’re investing more in your community’s success than you’re extracting from it.

Test it: If organic signals from the previous stage to find where you can enable those people without directing them. What would it look like to help your most active customers grow — their business, reputation, whatever?

Lesson: The key to success is aligned incentives, like we found in the Tesla referral program. You help your customers grow, which helps you grow.

Common misstep: Clay’s “gardener” philosophy nurtured authentic excitement at a time when structure and guidelines would have smothered it. Don’t try to over-engineer UGC.

4. Build the Trellis

Only after organic growth was undeniable did Clay formalize the ecosystem with the structure required to scale it.

• Programmatic Community: Clay Clubs are events with a dedicated non-employee host. Clay helps them find a venue, covers the cost, and assists with promo and attendance.

• Incentivized Content: Clay Creator programs gave customers formal reasons to post about Clay, but the real incentive was that the content helped customers grow their own businesses.

• Credentialed Expertise: A partner program launched with escalating benefits and requirements, including affiliate rev share so partners earned from bringing on new Clay customers.

• Official Role: Clay created a “GTM Engineer” job title, posted public job listings, and watched the market adopt it. Today there are hundreds of GTM Engineer postings at companies like Cursor, Webflow, and Notion.

• Literal Alignment: Clay let its community invest at the same $1B valuation as top VC firms like Sequoia. Priority went to community members that reinforced the benefit of the ecosystem, both today and in the future.

Each of these moves would have totally bombed if they launched too early. The partner tiers work because there are enough successful partners to populate them. The expert directory works because the experts already had credibility. The equity offering works because the community already felt ownership.

The trellis simply supports growth that already exists.

Test it: It’s only after your customers have reached diminishing returns in Phase 3 that Phase 4 should be explored. Specifically, try to identify:

• Where could program formalities help customers extract additional value?

• How could structure deepen your relationship and further elevate with power users?

• What would be the most minimum viable and most extreme version of each program? (Clay let people invest in the company.)

Lesson: The infrastructure should formalize what’s already happening.

Common misstep: In the Test It step above, I intentionally referenced your customer’s diminishing returns, not your company’s. The signal you’re looking for is not your own scale or efficiency or margin.

Gardening > Engineering

Most ecosystem programs fail because they try to start at Phase 4. Six months later, the partner program has 12 members and no momentum so it gets sunset.

Take inspiration from Clay that ecosystems are most vibrant when cultivated.

They constrained their community until it was dense enough to sustain itself. They watched for organic signals instead of manufacturing them. They invested in their users’ success before formalizing any program. And only when the growth was undeniable did they build the infrastructure to support it.

• “How do I build a partner program?” ❌

• “Is my product and ICP ready for one?” ✅

The companies that get this right won’t be the ones that copy Clay’s partner program. They’ll be the ones that copy Clay’s perspective.

Video Version

Every AI notetaker has some version of user generated content as a growth channel. Otter, Circleback and Fireflies all encourage users to share meeting recaps with participants.

1. Notetaker grabs emails from calendar invite

2. Sends the meeting recap to demonstrate product value

3. Loads up on CTAs and remarketing to drive new adoption

It’s interesting but not new.

Granola’s iteration found a way to make that moment more powerful by front-loading the product’s aha moment for non-users. Existing users are actually delivering it to people who haven’t signed up, don’t know who you are, and aren’t even in the market for a solution.

It’s something I think about (and am actively borrowing) at Recurrent. We create vehicle insights that EV owners share when selling a car or helping fellow owners. Our product reaches non-users constantly, and we think a lot about user generated content, but I’ll admit we haven’t fully engineered sharing to front-load the most impact.

Adam Fishman called it user-distributed content. That’s helped me reframe how I think about it, so here’s a framework to help you turn your outputs into potent acquisition channels.

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The Distributed Demo Framework

1. Design the Artifact

Every company has at least one output that reaches non-users. That’s true across sectors for both product and service providers.

Granola’s artifact is the shared meeting note. After every call, the user gets an AI-enhanced summary with action items, key decisions, and a prompt bar to go far beyond a TL;DR.

They didn’t have to create a new sharing behavior. They helped users by embedding in a behavior that already existed.

This is what separates strong distributed demos from forced ones.

A counter example is something I noticed when onboarding Fyxer. They prompt users to invite coworkers at every opportunity you could imagine, and a few that you couldn’t. (Their growth team said the tactic won an A/B test.)

But that’s not a demo, not an aha moment.

Test it: Make a list of outputs that reach non-customers through customers. Don’t prioritize by frequency or expected impact, but document some of that:

• How often does that happen?

• Is the output valuable on its own or does it require context?

• What’s the best possible reaction you could expect?

• What’s the likelihood of that reaction happening as it stands?

Lesson: The highest impact artifacts align with existing, frequent user behaviors. If we can focus less on creating the habit, our energy can go into upgrading an existing one.

Common misstep: I think marketers and growth teams are particularly prone to thinking about what people should be doing, rather than what people are actually doing. People should floss each day, but there’s a reason we call it the Toothbrush Test instead.

2. Front-Load the Aha

People who attend a meeting with an Otter or Fireflies bot get a readout. It’s useful, but predictable and static.

Non-users who get notes from Granola get an interactive page. They can use “Ask Granola” to query far deeper than the transcript: “Where in the meeting did I demonstrate the most leadership?”

Since Granola researched you based on your contact info, and can tailor responses to your role and professional context, the insights tend to be incredibly impressive.

That’s an aha moment for a non-user.

Test it: Go back to the list you made in Step 1. For each opportunity, revisit the questions with a focus on the aha moment:

• Is the output value tangible and impactful on its own?

• What’s the best possible reaction you could expect?

• What’s the likelihood of getting the best possible reaction?

Common misstep: Don’t gate it. Granola deliberately lets non-users interact with shared notes without an account.

3. Remove Sharing Friction

Most collaboration tools default to private. That protects privacy, but it also adds friction at the exact moment where distribution happens.

Granola optimized for distribution because meeting notes are inherently collaborative for the people who were in the room.

Beyond sharing links, Granola prompts to integrate with team tools. Notes can be pushed to Slack, Notion or your CRM.

That is different than “click to email” or “copy and paste,” which are both opportunities for the growth loop to die.

Test it: Decide up front how you’ll evaluate the impact of your new growth channel. A few ideas:

• Share rate: What percentage of your artifacts get shared?

• Signup rate: What percentage of non-users who view an artifact take steps toward conversion?

• Retention rate: Of those who convert from a shared artifact, how does retention compare to other channels or averages?

• Time to distribution: How long does it take a new user to share their first artifact with a non-user and continue the loop?

Lesson: The distributed demo loop is measurable, but only if you’re looking at the right part of the funnel (which is often before the funnel starts).

Common misstep: It’s easy to add more Share buttons. It won’t move the needle if you’re not removing the friction around them at the same time.

Building Your Distribution Loop

It’s tempting to read this framework and think it only applies to software products.

• A consulting firm’s slide deck is an artifact.

• A financial advisor’s portfolio summary is an artifact.

• An agency’s campaign brief is an artifact.

Any time your IP lands in front of a member of your target market that isn’t your customer, I think there’s a distributed demo opportunity.

Most companies have the raw materials. What they’re missing is the intentional design.

Granola didn’t invent meeting note sharing. They engineered the moment when a non-user receives a shared note and thinks, “Daaaaang, I need this.”

That’s the distributed demo doing its thing: a product experience that happens before signup, delivered by your existing users, with zero marginal cost.

Audit your outputs. Front-load the aha. Remove the friction. Measure the handoff.

Your users are already distributing something. The question is whether you’ve made it worth receiving.

The CRM startup Attio puts 60% of its growth investment in proven channels and 40% in emerging and unproven channels. If that sounds aggressive, you should sit down before reading further.

The marketing team at Lovable says they invest 95% in unproven growth levers and only 5% on optimizing what already works.

Two different companies. Two different allocations. Both finding success and outpacing their peers.

I spent a lot of time over the past week on which approach was “right.”

It turns out that’s the wrong question. The right question is asking where each company is in its category and where the category is in its maturity.

At Recurrent, I’ve watched our own allocation shift dramatically as the EV market matured, and early entrants found their traction in different corners of it. What people know and think about electric cars is much different today than 5 years ago, and so is how we allocate our growth investments.

After studying the growth models at more than a dozen high-growth companies, including those with my fingerprints on them, here’s a framework you can use to treat your growth channels like an investment portfolio.

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Venture-to-Bond Budget Model

When it comes to investing, 25- and 65-year-olds shouldn’t have the same portfolio mix. Financial advisors would tell you that a younger investor can absorb volatility and be more aggressive with growth stocks. The older investor needs predictable returns because there’s less time before retirement to recover from a bad quarter.

Growth channels work the same way.

An early-stage company in an emerging category can (and should) bet heavier on unproven channels because (1) there’s often no proven playbook to follow and (2) the potential upside outweighs the relative cost. No bets, no rewards.

Meanwhile, a publicly traded company can’t boom in Q1 and bust in Q2 because their marketing experiments didn’t pan out. They need channels that deliver predictable, repeatable pipeline.

But most growth teams don’t think about their channels this way. Instead of treating channels as a line item in a budget, we need to be thinking of it as an investment portfolio with a specific risk/return profile.

The Venture-to-Bond Budget Model uses three channel classifications that we’ll map to your company’s maturity stage (drawing from the Four Waters Framework) to help you find the right allocation for where you are now.

1. Blue Chips are proven channels with predictable returns. You know the CAC, you know the conversion rate, you can forecast with confidence. These are the bonds and index funds of an investor portfolio.

2. Growth Stocks are channels showing early promise but unproven scale. These will need to be nurtured to determine if they’ll graduate to Blue Chip status.

3. Venture Bets are totally unproven channels, new experiments, emerging platforms, unconventional plays. Most will fail. And we’re ok with that.

Now let’s build and manage your portfolio.

1. Diagnose Your Stage

Category maturity is the single biggest input to your allocation. It’s the equivalent of your age in a financial portfolio.

I covered category maturity stages in the Four Waters Framework, and those stages map directly to how aggressive your growth portfolio should be:

• Uncharted Waters is full of Venture Bets. You don’t have proven channels yet because the category barely exists. Lovable reports having to rediscover product-market fit every 3 months so that puts their 95/5 mix into context.

• First Voyage is when your early Venture Bets begin producing signal. Some are graduating to Growth Stocks and it’s getting easier to identify and cut losses faster. This is where Recurrent is today.

• Charted Course is when your early Growth Stocks are graduating into your first Blue Chips. This is where Attio sits today with 60% in Blue Chips, 20% in Growth Stocks and 20% in Venture Bets.

• Crowded Waters is when your portfolio is overwhelmingly Blue Chips with a focus on optimization. Venture Bets are smaller, more targeted, and designed to find an edge in an increasingly competitive landscape.

Test it: Plot your company on the Four Waters Framework. Then list every growth channel you’re investing in and classify it as a Blue Chip, Growth Stock, or Venture Bet.

Lesson: The channel mix that got you where you are today is almost certainly not the mix that gets you to the next stage. Understanding that is enough to put you ahead of most of your competitors.

Common misstep: The maturity stages don’t have perfect delineators so I’ve found that most teams don’t realize when they’ve advanced to the next stage. Attio’s 60/20/20 split isn’t permanent. Two years ago it looked different. Two years from now it will look different.

2. Land and Expand

Time and money are precious resources in the early days. It always makes sense to start with the most logical (often manual) growth levers to extract as much as possible before deliberately expanding.

Attio’s leadership team (Nicolas, Alexander and Alex) described how the company started by building in public on Twitter and LinkedIn.

Next, the inherited cohort of VC users from their previous product created a slow but valuable organic feeder that compounded without paid spend.

Only after that did they experiment with search marketing. They tried SEO and it didn’t work. They tried paid search to find pockets where the economics were right and, as we’ll see, got more aggressive over time.

Test it: Write down your current channels in the order you adopted them. Look for sequences that follow a logical and insightful progression, and where you deviated.

• What did you try too early that you could potentially revisit now? For Recurrent it was paid social.

• Which Venture Bets have failed to mature and need to be replaced?

• What would you need to see from one of your Growth Stocks to double down as a Blue Chip investment?

Lesson: Seeing your entire portfolio written out and categorized should surface 1-2 immediate opportunities. I’ve never done this exercise with a marketing leader and not found an actionable outcome.

Common misstep: “This didn’t work when we tried it” is an opportunity to revisit if the company or category have evolved.

3. Grade Your Positions

The hardest part of managing a growth portfolio is having the confidence to double down on a Growth Stock or abandon a Venture Bet, even when the team wants it to win.

It helps to set the criteria before you place the bet:

• Target metric and threshold: What specific number is needed to signal this is working?

• Time horizon: How long will you run the bet before making a graduation / abandon decision?

• Maximum investment: What’s the ceiling on dollars or hours before you require positive signal?

When Attio tested paid search, they were competing with incumbents whose marketing budgets were larger than Attio’s company valuation. Bidding on “best CRM” was unlikely to pencil.

But large competitors and budgets always have oversights and inefficiencies.

I’ve lived this at Recurrent. We operate in the automotive space, so we bump into some of the most recognizable brands in America — companies that run Super Bowl ads and sponsor the popular podcasts on your playlist.

We can’t compete in the same places. But we have been able to find opportunities in places that might not be important enough for them to care but have a material value to us.

One example is that Recurrent invests early and often in rising stars on YouTube. Instead of buying transactional air time from massive influencers, we found creators just getting started. To us, their success was inevitable. To them, Recurrent believed in them before anyone else and contributed to their success by growing with them. Their growth became our growth.

That’s the mindset startup teams need. We’re not trying to win the channel. We’re trying to find the sliver of the channel that the rest ignores.

Test it: Treat each channel like a pitch competition. If you had to pitch each channel to an investor, would they buy it as a Blue Chip investment? Look for the places that you have strong defensibility, repeatability, scalability. And where you don’t.

Lesson: Most startups can’t compete head to head with incumbents. But we don’t do this because we like fair fights.

Building Your Portfolio

There’s no “right” allocation. That’s the whole point.

Lovable’s 95/5 split toward innovation works because they’re in an AI category that’s moving so fast that last quarter’s proven tactic is this quarter’s legacy approach. Attio’s 60/20/20 works because they’ve found channels that deliver while still needing room to discover what’s next.

• “What’s the right ratio?” ❌

• “Does my current ratio match where I actually am?” ✅

The answer changes. Lovable’s allocation will look different a year from now as their category matures. Attio’s already has.

If you’re in an emerging category and 80% of your budget goes to proven channels, you’re investing like a retiree.

If you’re scaling toward predictable revenue and 60% of your budget goes to experiments, you’re investing like a 20-something day trader.

Your growth portfolio should mature with your company. The teams who figure that out will spend less time wondering why last quarter’s playbook stopped working.

That belief became a manifesto and philosophy on how software should be built, rather than a blatant pitch for adopting their product.

As the category competed on features and pricing, Linear rallied people to a conviction. “The brands in our market are non-existent or negative… it’s hard to even say what these companies stand for,” said CEO Karri Saarinen in a First Round interview.

I’ve witnessed the power of strong corporate beliefs at Recurrent. It unites the team and gives all of our stakeholders a clear view of the world that we’re trying to create in an emerging category. When everyone understands what you believe, positioning the brand in the market gets much easier.

That’s why Linear’s growth is a positioning story. Here’s a framework that any team can use to build its own belief moat.

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The Belief Moat Framework

B2B companies tend to position themselves around features and benefits. That works until a competitor inevitably copies the features, matches the price or in some other way dilutes the differentiation.

Belief-based positioning operates on a different plane.

We’re not asking prospects to evaluate products. We’re asking them to share our view of how the world should work. That’s a stickier commitment and more difficult to replicate.

Here are four steps to find your moat.

1. Identify the Unspoken Compromise

Every category has a tradeoff that everybody accepts but nobody likes.

• For emerging categories, it could be a limitation.

• For mature categories, maybe it’s just been there so long it’s become invisible.

In project management, the compromise was that tools were built for managers rather than contributors. No shade, but if you’ve ever used Jira, you know what I mean.

Saarinen and his co-founders were individual contributors at Airbnb, Coinbase, and Uber. They lived that compromise daily. As Saarinen described it, “A lot of the tools that we were using were not optimized for the individual contributor; they were optimized for the buyer.”

That’s where belief moats start. It’s a structural and tangible frustration that the market shares, even if it’s quiet or silent.

Test it: Ask 10 customers in your category what they tolerate but quietly resent about the existing options. You’re listening for a complaint with the status quo that (indirectly) 8/10 reference.

Lesson: The unspoken compromise is a philosophical friction that can hide at different levels of an org and with different stakeholders.

Common misstep: Lots of frustrations are real but shallow. “The UI is ugly” is an opinion but I’d argue it isn’t a rallying belief.

2. Write the Counter-Narrative

Once you’ve identified the compromise, codify the alternative. Publicly.

Linear published The Linear Method, a set of principles for how software should be built. It was a declaration of values that resonated with their core audience.

Founding and leadership teams often share beliefs internally. Publishing them is the syndication step needed to reach the rest of the stakeholders.

Saarinen was direct about this: “Your brand is what you stand for. It’s your take or manifesto. What do you hold dear? What do you care about? Then put your work in that context.”

Linear’s early blog post articulating this philosophy helped to add 10,000 industry peers to a waitlist. It’s nauseating to calculate the advertising cost equivalent of that, particularly for a young brand.

Test it: Write a one-page document that describes how your category should work. If you can’t articulate it in a way that you’d be comfortable sharing externally, even with a few testers, you may not have a strong enough belief to build around.

Lesson: An unpublished belief is an opinion, maybe even a smart opinion. A published belief can be a positioning strategy.

Common misstep: I tend to see counter narratives end up as a feature pitch disguised as philosophy or a concept that’s too narrow to resonate with the market as the company scales.

3. Curate Your Feedback Loop

When you publish a conviction, the people who respond are self-selecting. They already share your view of the world. That means their feedback is directionally aligned.

Linear used their 10,000-person waitlist as a selection mechanism. They added roughly 10 users per week, individually selecting the people they thought would be most motivated. Those early users shaped the product through a shared lens of what “good” meant.

This isn’t just a pre-launch tactic.

Saarinen’s design philosophy reinforced this: “In order to be really good for the user… you have to be opinionated. It’s more of the Apple way.”

Test it: Product feedback has a tendency to be viewed as squeaky wheels from a small segment of outspoken users. Look at your last 10 pieces of product feedback. How many came from ideal customers that share your core beliefs about the category? If the ratio is low, you don’t have a helpful feedback loop.

Lesson: The belief doesn’t just attract customers. It filters for the right customers to learn from.

Common misstep: Treating all user feedback equally. The user who wants you to become more like the incumbent is not the user who will help you become the incumbent.

4. Animate the Belief

Linear’s belief shows up everywhere, a characteristic of other strong positioning statements. Linear even chose “issue tracking” over “project management” because it better spoke to engineers: “It doesn’t attract people that don’t know what issue tracking is,” said Saarinen.

From hiring to marketing to sales, Linear tries to embody the belief at every opportunity. Each is a signal to the market that reinforces what the company stands for.

For teams in earlier-stage categories, it’s also worth connecting this back to the Four Waters Framework. The company that first animates a belief often sets the category narrative for everyone who follows. By the time competitors realize that philosophy matters, the position is taken.

Test it: Audit each step of your sales and onboarding. Find the places that are strongest, weakest or nonexistent.

Lesson: The belief has to be continuously legible as customers develop their early impressions of your product or service.

Common misstep: Animating the belief in marketing material is easier, but it needs to live in the product, too. Customers notice when early expectations are not met by reality.

Digging Your Belief Moat

Most categories are still philosophically unclaimed. The incumbents have optimized for features, pricing, and sales motions, sometimes to avoid taking a strong position.

That’s the opportunity.

Linear isn’t eating into Jira’s market share with features or pricing. They orchestrated an authentic belief and let the believers rally to them.

If you can’t articulate what your company believes about your category, you’re often competing on differentiators that lack durability.

Beliefs will always outlive features.

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But they very intentionally didn’t market to “everyone” at launch. They spent months obsessing over one tiny audience.

I’ve been analyzing Canva’s growth playbook, and that early restraint is a key part of their success as they build toward a billion users.

The everyone trap

We’re told our entire lives to dream bigger. This is especially true in the startup world where value is so closely dependent on addressable market and customer adoption.

“Go big or go home,” we’re told.

Except that almost never works on Day 1, and it’s especially dangerous in an emerging category.

Canva CPO Cameron Adams described the problem in an interview with First Round Review: when products are pushed out for “everyone,” the messaging becomes impossible. You can’t write a homepage, an onboarding email, or an ad that resonates with a real estate agent and a YouTube creator and a nonprofit director. You end up speaking to none of them.

We understood this at Recurrent and focused on the nerdiest and most passionate EV owners. These are the people who sign up for every app, join every forum, and talk your ear off about their car. By focusing on them, our messaging clicked and our early growth accelerated.

Going wide doesn’t just dilute your message. It dilutes your product signals, your feedback loops, and your ability to build the organic advocacy you need before you can afford paid channels.

Here’s their audience selection framework that any founding team in an emerging category can steal.

First Audience Framework

Ahead of Canva’s 2013 launch, the founding team chose social media managers as their core audience. Notice the specificity there.

• Not “small businesses” = tens of millions of potential customers ❌

• “Social media managers” = thousands of potential customers ✅

Here are the five criteria that I uncovered from that decision and how to use them to eliminate potential audiences until you’re left with the right one.

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1. Feedback Velocity

Social media managers needed professional-quality graphics constantly. Pinterest and Instagram were exploding at the time and the people creating that content were doing it dozens of times per day.

This frequency would give Canva rapid feedback velocity.

Daily users generate more data and stress-test more edge cases than someone logging in once a month. Canva’s team could ship an update on Monday and be able to iterate by Wednesday. This is in part why Larry Page made business decisions with the toothbrush test.

Test it: Look at your pilot customers or waiting list. Make a short note on frequency and variety of use from each potential audience segment.

Lesson: 500 daily users will teach you more in a month than 5,000 quarterly users will teach you in a year.

Eliminate: If the audience needs your product monthly or less, you probably can’t learn from them or keep them engaged long enough to fuel growth.

2. Revenue Signal

Social media managers were professional users. Professional users can quickly realize product ROI and justify product expenses. I would also imagine that people in social media at the time were less blocked by traditional IT gatekeepers or worked as solopreneurs without budget blockers.

Lesson: Early users need an easy way to value ($) the product. For a lot of us, that means finding professional audiences and a way to draw a direct line to increasing revenue or decreasing costs.

Common misstep: Free user growth sounds great in a press release, but if your first audience has no incentive to pay, you’ll struggle to prove unit economics when you need them most.

Eliminate: If your audience is solving a nice-to-have problem with no budget pressure, you won’t have the urgency you need to build a base.

3. Organic Distribution

Not many target audiences have more attractive organic reach than social media managers. They are on social media all day sharing their work.

Adams described this dynamic in his interview with Lenny Rachitsky: these users loved being on social media, telling people about the tools they were using, and introducing Canva to others.

“[Early users] need to want to talk to other people about it, because in the early days of your startup you don’t have marketing dollars. You need to really foster the first people that are going to use your product. They’re going to be the ones that are going to spread it and they’re going to set the foundations for your growth.”

Superhuman followed a similar playbook. The email startup launched with a narrow positioning for founders of high-growth tech companies. That audience was comparatively small. But founders talked to other founders. The narrow audience had natural paths for organic growth.

Test it: Find the communities where your potential first audiences already gather: FB groups, Slack communities, Reddit, Discord, industry forums, etc. Are they actively making recommendations or do they see what they do as “secret sauce” to hide from the world?

Lesson: The best first audiences don’t need referral programs or ambassador incentives to spread the word. They share because that’s part of their identity or part of their success.

Common misstep: If your first audience doesn’t naturally share with peers, you’ll have to manufacture every ounce of awareness yourself.

4. Acquisition Cost

Canva found that social media managers gathered in predictable (and affordable) places. Many subscribed to the same public Facebook groups, attended the same conferences, and read the same niche publications.

No part of Canva’s early acquisition strategy required a massive media budget. They knew where to find their target audience and designed every piece of messaging to speak to them.

Test it: For each potential audience, list the 3 ways you would put your product in front of them. It should not take long for the contrasts to jump off the page at you.

Lesson: The constraint isn’t just financial. Expensive channels have slower feedback loops and higher stakes per experiment.

Common misstep: The audience that scores best on the other 4 criteria but requires $50,000 in sponsorships to reach is probably the wrong first audience.

5. Market Bridge

After social media managers, Canva expanded to startup founders with lean teams by adding a Presentation feature designed, in large part, specifically for them.

That created a “yes, and…” opportunity compared to an abrupt pivot in positioning and messaging. Tech founders were among the earliest adopters of social media, so they were hiring the same social media managers.

Test it: Create a relationship map for your first audience. Who do they naturally influence? Who do they share with outside their immediate peer group? We’re trying to identify at least two adjacent audiences that interact with your first audience.

Lesson: It’s best when your first audience sits at a network crossroads vs a cul-de-sac.

Common misstep: A highly engaged vertical audience that doesn’t interact with other verticals can trap you in a niche.

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Choosing your first audience

Run each of your prospective beachhead audiences through these five filters. The audience that survives all five is probably your starting point, even if it feels uncomfortably narrow.

Canva’s founding team always intended to serve billions. They are well on their way today with over 250 million monthly active users.

But they had the restraint to serve thousands first, and to serve them so well that those thousands became the growth engine for everything that followed.

If you want a step-by-step worksheet to score your audiences, download the First Audience Framework PDF here.

Video Version

“We’ll do it at some point, but not now.”

Vanta built a shortcut that templatized the SOC 2 process so startups could be compliant in 1/10th of the time for 1/10th of the cost. But that still wasn’t enough to motivate them.

“We’ll do it at some point, but not now.”

That’s a common story in emerging categories: We create a truly innovative way to do something faster, cheaper or with less disruption, but that isn’t enough to meaningfully budge demand that’s stuck in “not yet.”

Instead of focusing on product features, Vanta unlocked demand by animating the moment when the absence of their product would cause painful, quantifiable loss:

Imagine your sales team closes a huge enterprise deal. Then procurement sends the security questionnaire that requires a SOC 2 Type II report. You don’t have one. The deal dies, your competitor wins, your market share stumbles.

• “Achieve compliance faster” ❌

• “Stop losing deals you’ve already won” ✅

The first is about future benefit. The second makes the loss tangible today.

When building in a category where prospects don’t feel urgency, we can’t manufacture it with features and benefits.

Let’s dissect the Tangible Loss Framework for lessons we can apply in our own businesses.

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Becoming a “Must-Have” with Tangible Loss Framework

From the Four Waters Framework viewpoint: Vanta was at a stage called “Uncharted Waters” where the market didn’t recognize SOC 2 compliance for startups as urgent or worth solving. Their primary competitor wasn’t another company, it was a lack of urgency to solve a problem that hadn’t started to bother them yet.

The Tangible Loss Framework that we can derive from Vanta has four steps.

1. Identify the Loss Event

What do prospects lose if they don’t have you? Notice the verb choice of “lose” vs “fail to gain.” It’s intentional.

• “You’ll gain customer trust with SOC 2.” ❌

• “You’ll be compliant with industry standards.” ❌

• “You’ll lose enterprise deals without SOC 2.” ✅

Research on loss aversion explains that people feel losses 2x as intensely as equivalent gains. Losing something, especially something you’ve fought to earn, is a potent motivator.

I’ve had a similar experience with Recurrent, where commercial EV sellers saw battery information as nice to have but not essential. Electric cars made up only 10% of their sales so touting the benefits or potential upside was not enough to unstick inaction.

Identifying the loss event created urgency:

“You’re undervaluing every EV you sell by $2,000 to $5,000 because you don’t understand the battery. That means you’re leaving $3.5 million on the table each year.”

Suddenly the 10% problem became a seven-figure hole in their bottom line.

Lesson: The loss event must be tangible. “You might lose deals someday” doesn’t drive action.

Common misstep: You can’t invent a hypothetical loss. It has to be something they’ve already felt the pain of at least once.

Test it: Map your customer’s worst days in the last year. What went wrong and how could you have helped to avoid them?

2. Quantify the Stakes

Vague statements don’t create urgency. Make the loss concrete and measurable. If they can’t quantify the loss you’re preventing, you can’t build a business case.

1. What deals are being lost or delayed? (Revenue)

2. What does each week/month/year of waiting cost? (Delay)

3. What market share would be lost to competitors moving faster? (Competition)

4. How much time and money is wasted on manual processes? (Efficiency)

Vanta didn’t just say compliance was important. Vanta showed that a traditional SOC 2 process would cost $100,000+ and take 6-12 months. During that time, how many enterprise deals would stall or die? If a company closes $5M in enterprise ARR per year and 10% of prospects ask for SOC 2, that’s $500,000 in pipeline risk.

It’s specific and measurable. Those are the business cases that get a CFO’s attention.

Lesson: Everything needs a concrete number because “faster sales cycles” is too vague to be urgent.

Common misstep: Industry averages are only better than nothing. It’s easier than ever to estimate actual business value from publicly available data.

Test it: Build a simple calculator for your target personas to quantify the stakes.

• Revenue: Deal sizes and number of deals affected

• Cost: Penalties or inefficiency or labor

• Timeline: How often these loss events occur

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3. Align with the Calendar

Manufactured urgency fails with business customers. That’s not what we’re doing here. Prospects see through it. True urgency comes from their business’s calendar so it’s your job to align with it.

In several of the executive interviews that I listened to while studying Vanta, CEO Christina Cacioppo said that they researched a vertical until they could predict 75% of a prospect’s answers.

That helped Vanta align its marketing and sales motions with prospect’s businesses.

Lesson: Don’t try to create artificial deadlines. Find the real ones already in your prospect’s business cycle.

Test it: Map your customer’s businesses to a calendar to understand when loss events are most likely to occur or feel most urgent.

• Fiscal year ends

• Budgeting periods

• Regulatory deadlines

• Development cycles

• Customer renewals

• Industry conference seasons

Step 4: Offer Crash Detection

My truck applied its own brakes when I didn’t see a cyclist weaving through parked cars the other day. The rush of relief was overwhelming because I instantly saw two very different outcomes.

Crash detection is what we’re trying to offer.

Vanta’s core promise was speed. Traditional SOC 2 took 6-12 months. Vanta delivered it in weeks. That meant the difference between losing a deal in the pipeline and closing it.

Lesson: Position yourself as the solution to an active problem, not a tool for future optimization.

Test it: Audit your website and key marketing materials. Do they present a product or crash detection?

When This Doesn’t Work

Loss aversion isn’t universal. The Tangible Loss Framework breaks when:

1. The loss is hypothetical

2. The timing is distant

3. The loss is industry-wide

4. You don’t have credibility

If prospects don’t believe the loss is real or don’t believe you can prevent it, the entire framework collapses. Your marketing goes from helpful to manipulative.

Lesson: Don’t weaponize fear you can’t credibly back up. It erodes trust faster than it creates urgency.

Test it:

• Are prospects already experiencing this loss?

• Can you prove your solution prevents it?

• Is the timeline urgent enough to overcome inertia?

Vanta hit $100M ARR by making compliance urgent. They weren’t manipulating people into believing it mattered. The urgency was always there, Vanta just made it visible.

Your opportunity is the same: Find where your category already has hidden urgency.

Make the loss visible. Quantify the stakes. Show the timing. Offer crash detection.

That’s not manipulation. That’s clarity.

Video Version

Skepticism and inaction are your two biggest competitors

We can’t run enough ads or publish enough blog posts to change that. People want to be persuaded by people so we must develop ways to systematically amplify customer voices to:

1. Educate the market

2. Help it acknowledge the problem

3. Consider your solution

In B2B sectors, the challenge compounds itself. Customer volume is lower and buyers tend to view their solutions or vendors as trade secrets. (Refer-a-friend programs won’t work there.)

Turning Customers Into Educators

This is a framework for creating a system to amplify customer voices. As a real-life guide, I’ll illustrate how Cognism used a podcast to help their customers educate the market.

Step 1: Define Your Credibility Gap

There are two common credibility gaps in emerging categories:

1. Prospects don’t trust your brand because you’re unknown or you’re competing against established players.

2. Prospects don’t trust your category (and solution) because the old way works fine or is less risky.

Brand gaps (#1) can be closed with traditional trust signals: customer logos, testimonials, social proof. You’re proving that your company is legit here.

Category gaps (#2) can’t be closed with traditional trust signals. You’re challenging someone’s beliefs, and those don’t budge for case studies or banner ads.

People who don’t trust the category need to be persuaded by their peers who:

• They turn to for advice

• Are one stage ahead in life or their career

• Have a track record of seeing the future

We all have those people in our lives, and those are the ones who can change our stubborn beliefs.

Test it: Ask 5 prospects why they haven’t adopted a solution from your sector yet. Their responses will tell you whether you’re facing a brand or category credibility gap.

Common misstep: Throwing more brand-centric proof points (case studies, testimonials, etc.) at a category credibility gap sounds smart in a planning meeting but it never moves the metrics.

Real-world example: Cognism sells B2B buyer intent data. As GDPR and other legislation rocked the data players in the late 2010s / early 2020s, which I observed working in the analytics sector at the time, the default action among executives became “just wait” to see what happens.

The problem wasn’t whether their data was accurate. It was simply easier to do nothing than face the risk of the unknown in a strange new data landscape.

Step 2: Identify the Key Message

You’ve verified the gap. Now we need to isolate the specific belief holding back potential customers.

Test it: Complete this sentence. “If we could change one belief across our target market, it would be ___________.” That’s 95% of your key message. Every customer voice you amplify can help to reinforce this single point.

Insight: We’re searching for the market-level narrative that prevents broader adoption. It should make your entire category more credible.

Real-world example: From what I’ve observed at Cognism, the key message was that sales professionals were still winning with outbound.

Shivan Pillay at Cognism created “Why Did It Fail?“ to give sales professionals a space to discuss failures openly. Instead of promoting Cognism‘s data products, the guests validated that failure was normal and that the path from failure to success was learnable.

The show directly addressed category skepticism. Successful sales leaders could prove that the category itself wasn’t broken, as long as their peers learned the right approach.

Step 3: Choose Your Format

Don’t ask yourself if you need a podcast. (You probably don’t.) Instead, focus on finding the medium that lets your customers educate their peers at scale.

These can take many shapes.

• Episodic shows (podcast, video interviews)

• Tutorials and walkthroughs (how > why)

• Public discussions (conferences, webinars)

• Co-marketing (1+1=3)

Test it: Ask customers where and when they learn. We never want to force them to adopt a new medium. For example, if I can’t absorb educational info (1) through earbuds (2) while washing dishes (3) after my toddler goes to bed, it’s not going to happen that day.

Common misstep: Choose a format based on what your ICP wants to consume, not what you are willing to create.

Real-world example: Cognism chose podcasting based on:

• ICP consumption: Sales pros listen to podcasts during commutes, between meetings, while doing admin work

• Content quality: Audio-only format helped guests open up about failure

Step 4: Make Everyone Win

The fastest way to kill customer voice amplification is losing sight of the value exchange. Every stakeholder must genuinely benefit and, arguably, the audience should benefit the most.

Test it: List every stakeholder and what they get from participating. “Exposure” or “tips” aren’t enough.

Lesson: The best customer education systems benefit the customer more than they benefit you.

Real-world example: The Cognism podcast helps sales professionals process failure, which I think is 95% of a seller’s day. The brand benefit is clear, but secondary.

• Guests get space to process failure and a way to build a personal brand or connect with peers.

• Listeners get unparalleled practical lessons from others’ mistakes, plus validation that struggle is part of the job.

• Cognism gets audience growth and repurposable content.

• The category gets a normalization of the failure-success ratio and a broadened perspective on selling strategies.

Step 5: Define Success Metrics

Define what success looks like upfront and commit to the time needed to achieve it. Most teams quit too early because they expect immediate ROI from something that is a long-term play.

Test it: Write down success metrics for several time horizons to be clear about objectives. (3, 6, 12, 24 months)

Common misstep: Evaluating a customer voice amplification program on monthly or quarterly timelines. If you need to fill the pipeline this quarter, this isn’t it.

Real-world example: Shivan Pillay told me that Cognism is only now, after 3 years, beginning to evaluate the podcast against numerical success metrics. That time horizon should be sobering for a lot of us living by quarterly campaigns and annual budgets.

Teacher of the Year Award

My biggest insight about customer voice amplification isn’t really about podcasts or formats or metrics.

It’s about respect.

When you systematically amplify customer voices, you’re saying: “The people using this product in the real world understand it better than we do. Let’s learn from them together.”

That’s a fundamentally different positioning than “Here’s why our product is great.”

Cognism’s podcast doesn’t say “buy our sales intelligence.” It says “let’s all get better at sales together.”

Giving your customers a platform to educate their peers is bigger than sales or market share. You’re building belief.

That’s something traditional marketing (and its associated metrics) can never buy.

Video Version

• We don’t acknowledge their size because it’d make us look small.

• We don’t accept their feature breadth because it’d make us look behind.

• We don’t admit to their market dominance because it’d make us look weak.

Instead, we often try to position away from the Goliath to compete on a feature, an unbundled price, or some other angle they won’t match. The logic seems sound: If we don’t talk about them, people won’t think about them.

But buyers are already thinking about the incumbent.

The category leader is the default choice. Pretending they don’t exist doesn’t eliminate the comparison, it just makes us (and our products) harder to understand.

Supabase could have positioned themselves as “a modern backend platform for developers” or something buzzwordy to avoid a comparison to the industry standard, Firebase by Google.

Supabase did the opposite.

The top of their homepage positioned the company as an “open source Firebase alternative” from 2021 through 2025 (after reaching a $5 billion valuation).

Note: Supabase started to adapt its positioning away from Firebase in the last 6 months — visible in the 2026 home page. In this interview, the CEO talks about how they are now serving more customers outside of their traditional ICP, including vibe coders (down-market) and enterprise businesses (up-market).

If you’re competing against an entrenched incumbent and burning through budget trying to differentiate away from them, here’s a lesson in alternative positioning by Supabase that you should consider.

The Alternative Positioning Framework

Here’s the framework that I’ve derived from Supabase and a handful of other modern brands that have pulled this off.

Step 1: Name the Giant

When Supabase says “Open Source Firebase Alternative,” they immediately answer key questions for their developer audience:

1. What is your product? It’s a backend-as-a-service like Firebase.

2. Who are you compared to? Firebase, the industry standard.

3. Why are you different? It’s open source and dev friendly.

The thing I noticed most is that they fully committed.

• Homepage headline

• Product comparison pages

• Documentation on migrating from Firebase

Hundreds of pages across all parts of their site help prospects draw Supabase-friendly comparisons against Firebase.

Why it works: Naming the giant shows confidence. It says “yes, we know they exist, and we still think you should choose us for these specific reasons.”

Takeaway: Explicitly naming the incumbent eliminates confusion and some key buyer questions.

Step 2: Claim the Wedge

Supabase focused on something that mattered A LOT to a disgruntled (and outspoken) portion of Firebase’s customers: ownership + control.

They weren’t trying to lure Firebase’s entire customer base. They simply scratched at an existing itch and gave a specific segment permission to choose them.

If you’re a developer that values ownership and SQL, which isn’t offered by the incumbent, you at least consider Supabase.

Why it works: Supabase found something that was tangible, defensible and mattered a lot to a small (but material) segment of Firebase’s audience.

Lesson: The wedge can’t be a nice-to-have feature. A good wedge needs to fuel a fire that’s already burning.

Step 3: Prove the Difference

Supabase found a good wedge. But lots of startups break down on the offramp of Open Source Alternative. (In other words, it’s not novel or durable by itself.)

Supabase embodied open source in every aspect of its company, culture and marketing. Here’s a quote from an investor who actually embedded himself in the company for a period:

“From day one, Supabase was built on community trust,” said Aaron Cort. “It grew into one of the most starred open-source projects on GitHub, scaling from early Hacker News buzz to powering millions of databases.”

Why it works: I’ve cited a memorable insight that your primary channel is the one that your customer business can’t live without. Github is like the town square of collaborative and open source development.

Lesson: Make the wedge tangible. Prospects should be able to verify claims independent of marketing messages.

Step 4: Lower Switching Costs

The switching costs for development tools can be enormous, and scale with project and team size. For marketers, think of it like migrating a CRM or analytics platform. Not only is it the direct inputs to migrate, but there’s time to ramp up on the new platform and risk of having to move back if it doesn’t work out.

Supabase put its energy into eliminating the binary choice: stay or go.

• Developers were encouraged to start new projects on Supabase with generous free tiers rather than migrate existing work.

• Support documentation outlined how to make partial migrations or run Supabase and Firebase in parallel.

• It also activated its community to develop creative solutions and reduce the fear of the unknown.

Why it works: I’ve built on Supabase and, although not in their original ICP, the onboarding process felt like a low-cost experiment with quick time-to-value rather than a mundane platform migration.

Lesson: Status Quo Bias reminds us that it’s always easier to do nothing. Any friction in the form of time, irritation or risk only compounds the cost to switch.

Can You Use the Alternative Positioning Playbook?

Here are several tests to see if this is right for you and your business.

Question 1: Who’s the dominant incumbent?

If it takes your brain more than a fraction of a second to answer this, we’ll need to dig a bit deeper.

Alternative positioning works best when there’s a single default choice that your buyers already know.

Fragmented markets with lots of feature overlap and complicated consideration criteria are not a fit here. An example of that is marketing automation.

There are too many leaders in this space, all serving their own niche and bumping into each other. If you can’t name one dominant incumbent, the market is either too fragmented or you’re developing a new category.

Question 2: What’s your wedge?

Complete this sentence: “We’re like [incumbent] but [meaningful difference].”

Then ask:

• How is the difference tangible to prospects?

• Does it solve a meaningful pain for a specific (targetable) segment?

• How easy is it to defend from the incumbent?

The common answers are “faster” or “cheaper” or “easier.” Be objective here. Is that a really, REALLY meaningful difference to your customers?

Remember, you could be biased here. It’s always good to have someone check your work.

Question 3: Can you prove your wedge?

Ideally, you’ll become the wedge, like Supabase. Figure out now how you’ll embed this concept in your DNA so it is obvious with every stakeholder interaction.

It needs to be visible everywhere.

• Comparisons

• Technical documentation

• Benchmarks and testing

• Testimonials and case studies

• Feature highlights

• Pricing strategies

A skeptical prospect should be able to verify your wedge on their own.

Question 4: What’s blocking switches?

List every friction point that prevents a satisfied incumbent customer from trying you. Stakeholder approval, team training, migration downtime, etc.

How can you attack each one to reduce or eliminate it?

Supabase reduced migration lift with tooling and documentation. They reduced risk by encouraging their ICP to start small with free access.

Alternative positioning is less effective when switching costs are too daunting.

The Takeaway

By positioning as the alternative, you’re you are making a conscious tradeoff to be tied to the incumbent’s narrative — for better or worse.

You boom when they boom.

You stumble when they stumble.

If they pivot, you’ll have to adapt, too.

But in exchange, you inherit a lot of their shortcuts, including a reduced customer acquisition cost (CAC). You get to redirect existing demand that already understands the problem and has a budget allocated.

Supabase didn’t have to convince developers that backend-as-a-service was valuable. Firebase already did that work.

Supabase just had to convince a specific segment of developers that open source + SQL was worth the switch.

That’s how you compete against billion-dollar incumbents without a billion-dollar budget.

The question is: Does your market structure support this approach? And if it does, are you willing to tie your positioning to the incumbent’s narrative?

If the answer is yes to both, you may have found your clearest path to reducing CAC and accelerating growth.

Video Version

Yes, that BYD.

BYD wasn’t a car company. They were the world’s second-largest rechargeable battery manufacturer. Their massive business was supplying batteries to Nokia, Motorola, Samsung, Dell, HP and many others.

That’s also the year they bought a failing car company, while still selling batteries to Toyota, Ford, and Volkswagen.

Today BYD sells more electric cars than anyone (including Tesla) all while supplying batteries to other companies (including Tesla).

This is more than an automotive story. It’s a playbook for how niche specialists beat established players when markets shift.

Here’s how they did it and why more companies should recognize when they’re sitting on this opportunity.

Recognizing the Category Moment

BYD’s customer list in the 1990s and 2000s was a who’s who of global electronics brands. But they were becoming commoditized.

Battery tech in consumer electronics was becoming standardized. As more manufacturers entered the market, margins compressed and the future would not be as promising as the past.

The niche specialization that had made BYD successful was becoming a commodity.

This is about the time that automobiles were becoming increasingly reliant on electronics. On top of that, major automakers were treating batteries exactly the way electronics companies had treated them in the 1990s: as a commodity component to be sourced and integrated.

BYD saw three things their automotive customers didn’t:

1. The battery was a critical constraint.

2. Car companies understood engines, not batteries.

3. Reliance on batteries was increasing, and would only increase.

BYD saw a path for their ‘input’ to graduate to a strategic asset in a new category. As the ‘input’ experts, they could see downstream inefficiencies that others couldn’t see, and that gave them a competitive advantage.

How BYD Used Niche Expertise as a Wedge

Here are three trends from BYD followed by a framework that others can apply to their own businesses and industries.

1. Don’t Quit Your Day Job

In 2003, BYD expanded their manufacturing by acquiring a struggling automaker. They kept the BYD name and continued supplying batteries to other carmakers, operating two distinct business units:

1. Supplying batteries to electronics and automotive companies

2. Building vehicles using the same battery technology

That’s compelling because BYD had the opportunity to double-down or pivot, and they chose both.

• B2B revenue funded B2C development.

• Supplier relationships contributed to market intelligence.

• Optionality remained open.

This isn’t a totally novel approach. We’ve seen a few other modern brands do this balancing act.

• Amazon hosts Netflix and Spotify (B2B) that compete with Prime Video and Music services (B2C).

• Twilio maintains their API business after acquiring a (competitive) customer data platform.

• Stripe processes payments for competitors after launching point-of-sale hardware.

It’s possible to run parallel paths without a hard pivot. Sometimes (highly consistent) B2B revenue can even be used to develop (highly variable) B2C products without forcing customers to choose.

2. Place Unfair Bets

Traditional automotive companies were designing vehicles first, then sourcing batteries to meet the specs. Basically: “Go find a battery that fits this design.”

BYD flipped this process. They designed vehicles around battery constraints.

To avoid nerding out too much on battery chemistries and architectures here, I’ll simply say that BYD used their experience to bet on a cheaper, lower density battery that other OEMs viewed as inferior.

Most challenger brands benchmark against the industry incumbents. They look at what competitors are doing and try to match features or shave prices.

BYD used deep component knowledge to empower design choices that customers (a.k.a. other automakers) couldn’t envision.

3. Bring the Market with You

BYD’s batteries included innovation that made them objectively better in some ways. But they needed to get the rest of the industry to understand that.

In addition to investing in market education with dramatic demonstrations, they immediately sold the batteries to competitors to reorient the industry around their solution. Now dozens of carmakers (including Tesla, Toyota and Ford) use BYD batteries in their vehicles.

It only worked because BYD maintained both businesses. If BYD had cut off battery supply to focus exclusively on vehicles, they would have:

• Lost steady revenue streams

• Eliminated ongoing market intelligence

• Given up the validation signal to the market

• Forced an unnecessary either/or choice

Your Playbook: From Supplier to Category Leader

Here’s the 4-step framework that I’ve derived from BYD and other case studies to get you from Supplier to Category Leader.

Step 1: Evaluate Your Wedge Opportunity

An effective wedge is all about timing and market conditions. Let’s start by validating that you have the right conditions.

Tactics:

• Develop a simple thesis of the future that outlines how the market will shift in your favor. Then share it internally and externally to validate or adjust it.

• Map how customers currently integrate with you and where inefficiencies exist.

• Document the essential expertise that you have and customers lack.

Key Decisions:

• What is the timeline for your expected future (thesis from above) to become reality?

• What external factors would accelerate or decelerate that timeline?

• Will your current revenue fund new development without new capital?

Step 2: Dual-Track Your Operation

It’s time to add a business line while maintaining the existing component sales.

Tactics:

• Launch as the experiment that it is. This is not a press release moment.

• Take steps to protect and respect your customers with separate teams and limits to data sharing.

• Test and update the market thesis that you created in Step 1.

Key Decisions:

• What steps will you take to maintain current customer relationships?

• What is your communication plan for each stakeholder group?

Step 3: Build Compounding Advantages

Design your product and economics around integration strengths that others can’t replicate.

Tactics:

• Identify 3 dimensions that incumbents compete on, then 3 different dimensions where your expertise creates advantages.

• Design products to win decisively on YOUR dimensions, while accepting being “worse” on theirs.

• You’re likely increasing scale so look for quite volume-based advantages.

Key Decisions:

• What dimensions will you own vs. deliberately concede?

• Where do opportunities exist to vertically integrate?

Step 4: Establish Category Leadership

Evolve the category around your integrated strengths by bringing the market with you.

Tactics:

• Reframe the category conversation around your strengths.

• Position your approach as an industry evolution toward integrated solutions, not a competitive attack.

• Use your dual business model as proof of expertise and leadership.

Key Decisions:

• What metrics should define your leadership in the new category framing?

• How can it be positioned as a natural evolution vs. competitive disruption?

• How will you bring existing customers and partners along as the category shifts?

Don’t Miss Your Wedge Moment

This isn’t a new story. Lots of companies have found themselves in a component business that showed uncomfortable signs of commoditization. The question probably isn’t whether you’ll face this moment at some point, it’s whether you’ll recognize it when it arrives.

BYD saw that automotive was shifting from gas to electric. As the future unfolded, their battery expertise would increasingly become a strategic constraint in that world.

Look at what you know deeply that your customers will/do treat as a commodity. That’s your wedge.

The question is whether you’ll use it.

Video Version

This strategy is all around us.

• If you want ESPN, Comcast sells you “TV Plus” with 125 other channels.

• If you want Excel, Microsoft sells you Office 365.

• If you want a power liftgate, Chevrolet sells you the Premium Package.

Once companies can make the bundle an industry standard, the features start to belong together in the minds of buyers. It creates the illusion of choice without the reality of control.

Direct-to-consumer vs Unbundling

New entrants tend to compete against bundled offerings in two ways.

1. Going direct-to-consumer competes on cost by cutting out middlemen, reducing retailing expenses, and optimizing supply chains. These are great strategies, but they’re still playing in the incumbent’s category.

• Warby Parker cut optometry retail markup, but they’re still selling prescription glasses.

• Dollar Shave Club removed distribution costs, but they’re still selling razors.

2. Unbundling removes value that customers never wanted in the first place. It’s not just removing costs, it’s letting customers pay for less.

• Slack made communication a stand-alone product.

• Figma let people design without the Suite.

These products abandoned the incumbent’s category to create their own. Now we’re seeing this play out with electric trucks.

Ford (incumbent) and Rivian (DTC startup) were the first to introduce electric pickup trucks in the US. Both launched with premium models at premium prices. These original models were incredibly expensive to manufacture so the companies offered fewer bundled tiers with more luxury features to protect product margin.

Big screens, more cameras, greater automation, massive batteries, higher prices.

Enter Slate and unbundling to create a new category in the vehicle market, rather than simply a product variation.

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How Slate Made Subtraction the Product

The tactical execution of unbundling a product category creation requires more than just offering options. It requires repositioning the entire purchase decision.

Slate is launching as a $20-something-thousand electric pickup, but it isn’t positioning itself as a cheaper version of what already exists.

It is creating a configurable vehicle. While incumbents and DTC startups ask which package (trim) you want, Slate asks: “What do you actually need to get from here to there?”

Other than four wheels, seemingly everything else is modular and optional. No screens, no autopilot, no air suspensions.

Often the “build your own” experience is designed to increase average transaction price and Slate is attempting to invert this psychology.

Their configurator is designed to help customers find their minimum viable vehicle. It’s a message that asks “what can we remove so you’re only paying for what matters?”

While other electric trucks compete on features and price, Slate carves out a new axis: personalized versus predetermined. And once you’re competing on different terms, you’re no longer in the same category.

Slate (and Slack and Figma, from above) identified forced bundling and gave customers permission to reject it.

Finding Unbundled Category Opportunities

Not all unbundling creates categories. Sometimes it just creates SKU variations or cheaper alternatives. The difference comes down to whether you’re changing what customers are buying or simply how much they’re paying.

Category-creating unbundling happens when several conditions align:

1. The incumbent’s bundle is protecting margins rather than delivering value. In other words, the bundle costs customers more than the sum of its parts would cost separately.

2. New audiences would enter the market if they could buy less. These potential customers choose ‘nothing’ because the bundle cannot deliver a positive ROI.

3. The unbundling creates new behaviors rather than the same behaviors at a lower cost. It’s a subtle distinction that separates product category creation from price competition.

Here’s how to identify if your unbundling opportunity meets these criteria:

Map the incumbent’s standard packages and ask which features do customers consistently question, negotiate away, or complain about paying for?

• If the answer is “none,” it is likely a healthy bundle.

• If the answer is “a couple,” you might have a product variation opportunity.

• If the answer is “many,” and those features represent 30% or more of the package price, you have a category creation opportunity.

Then calculate the cost delta. What would the product cost if customers could exclude unwanted elements?

• If the answer is 20% less, you’re looking at a pricing strategy.

• If the answer is 50% less, you’re looking at a potential new category.

Slate’s unbundling suggests they can deliver an electric truck for less than half of a Rivian or Ford. It’s not because their trucks are cheaper to make, but because luxury features are expensive to include.

Finally, test if your unbundling enables new customer behavior. Ask potential customers: “If you could get X without Y, what would you do differently?”

• If they answer “buy it cheaper,” you have a pricing opportunity.

• If they answer “buy it without a doubt,” you have a category opportunity.

Building Your Unbundling Strategy

Positioning unbundling correctly means framing it as philosophy rather than economy. This is where many unbundling attempts fail. Founding teams lead with price and immediately position themselves as the budget alternative.

This triggers loss aversion.

Customers wonder what they’re giving up and why the incumbent’s bundle exists in the first place if these features aren’t valuable.

Instead lead with control and dignity of choice. Slate doesn’t say “we’re affordable electric trucks.” They are selling choice.

Basecamp doesn’t say “we’re cheaper than Jira.” They say that project management software shouldn’t require a training manual. The framing positions the incumbent’s bundle as wasteful or presumptuous, not premium.

You’re not the cheap alternative. You’re the respectful one. This is psychologically powerful because you’re giving customers permission to reject industry orthodoxy:

You’re validating a frustration they already felt… but couldn’t articulate.

Margin sustainability is the other unbundling killer. When you remove bundled features, you expose your unit economics. You need a path to sustainable profitability beyond just volume:

1. Operational efficiency that incumbents can’t match

2. Willingness to serve market segments that incumbents ignore

3. Eventually upselling your own value-added services

#3 is Slate’s likely path. They’ll start with radically unbundled vehicles to establish the category and build customer relationships. Once customers trust the brand, they’ll introduce more “popular configurations” and value-added services (maintenance plans, software features, charging solutions) that generate margin beyond the base vehicle.

The trap to avoid is recreating the exact bundles you disrupted.

If Slate eventually offers trims that look identical to Rivian, they’ve lost their category positioning. But if they offer “Cyclist Bundle” or “Contractor Package” that bundle features specifically for those use cases, they’re evolving in their category rather than abandoning it.

The Unbundling Assessment for Your Category

If you’re exploring whether unbundling could create a category for you, start by documenting your competitors’ standard packages in detail.

1. List every feature, service, and element that customers must accept to purchase.

2. Interview potential customers and ask them to mark which elements they’d voluntarily pay for and which they wish they could exclude.

3. Calculate the true cost of forced bundling for customers. Take the competitor’s average transaction price and subtract what the product would cost if customers could exclude unwanted elements.

4. Test your positioning with potential customers. Ask: “What would this let you do that you can’t do today?”

5. Model your margin sustainability path.

6. Consider your re-bundling roadmap. Decide which features you’ll never bundle, which you might bundle later, and under what conditions.

Never Forget Dignity of Choice

My best insight about unbundling for category creation isn’t really about features or pricing. It’s about displaying respect. When incumbents bundle everything together, they’re making decisions for customers.

But don’t discount how convenient bundling can be for buyers.

Example: I always buy a sandwich from the menu rather than the “Build Your Own” option. I want the tried-and-true combo that earned its spot on the menu.

Slate’s real innovation isn’t modularity or affordability. It’s telling electric truck buyers: “You don’t have to accept the industry’s definition of what an electric truck should be. You can choose what matters to you.”

That’s essential to keep in mind. The category you’re creating isn’t really about the product. It’s about who gets to decide what value means. Once you return that power to the customer, you won’t be competing in the old category anymore. You’ll have created a new one.

The path that Slack took from category pioneer in 2013 to today is a helpful parable. It reveals how dramatically what you should do (and what you should not) changes at each stage of maturity.

Let’s break it down with this framework to make it easier to navigate category maturity.

Four Waters Framework

Think of creating a new product category as an ocean voyage. While founding teams likely obsess over their course (market factors) in the early stages, it’s common for that focus to drift to keeping their ship afloat (the product) after venturing away from the safety of the dock.

This framework helps us read the conditions.

Stage 1: Uncharted Waters

Definition: The market doesn’t recognize your problem as either solvable or worth solving. Your primary competitor is the doubt that a product category should exist.

You’re in Uncharted Waters if:

• It’s difficult to summarize your business case in one sentence.

• Prospects may not know that they have a problem that needs to be solved.

• You are not replacing an existing product for your early customers.

• Any competitors are tangential and use completely different language.

Key challenge: Creating urgency for a remedy when prospects don’t know they’re in pain.

Key opportunity: You can define the entire category on your terms. The narrative, language, and success metrics are yours to establish. First-mover advantage is real.

Key message: Focusing on the problem and the pain it causes, not your solution.

Where to capitalize: Recruiting early adopters to be your future army of vocal evangelists.

Common misstep: Pivoting too early to compete in a different existing category.

Slack in Uncharted Waters

The idea that companies would pay for team chat was unproven when Slack launched. Existing platforms had chat products (AIM, Google Hangouts) but they were seen as places for casual, 1:1 and unstructured messages.

Enterprise communication happened through email.

That meant there was no existing budget or line item for team messaging, outside of some small dev-focused tools. But this also gave Slack permission to deviate from other startup playbooks:

• No MVP: The early product was so good that initial users helped peers see the potential and create the business case.

• No IT: Focusing on end users allowed Slack to skip the IT leaders, who didn’t have dedicated budget anyway and could quickly kill adoption.

• Ecosystem: Slack invested in integrations early, positioning themselves as a multiplier rather than another standalone tool.

The lesson: In Uncharted Waters, the traditional channels, demand tactics and growth signals may not help you. You’re building belief, not capturing demand.

Stage 2: First Voyage

Definition: You’ve proven the category can exist with positive validation signals from early adopters. Now you’re racing to define the category and set the boundaries before competitors do.

You’re in First Voyage if:

• You have paying customers who can articulate the value in their own words.

• Potential competitors have emerged using similar (but not identical) positioning.

• The industry recognizes the problem that you’re working to solve.

• Your customers are still limited to early adopters, not mainstream buyers.

• Education remains a crucial part of the sales process.

Key challenge: Defining and owning the category before someone else does.

Key opportunity: Becoming synonymous with the new category.

Key message: Writing the category narrative to position yourself as the obvious leader.

Where to capitalize: Building strategic partnerships that reinforce your category definition.

Common misstep: Creating shortcuts for competitors by scaling GTM too aggressively.

Slack in First Voyage:

Slack reached 1 million daily active users within 2 years. At that point, tech company prospects got it immediately. That drew attention from serious competitors, who reacted with product pivots (Microsoft Yammer) and bolt-on acquisitions.

Slack used its head start to iterate with rapid releases (emoji, threading, integrations) while competitors had to focus on maintaining core product parity.

By the end of this stage, ‘slack’ had morphed into a verb and corporate FOMO created market demand, presenting itself as meaningful inbound growth.

The lesson: First Voyage is when you make it clear to the market who is winning the race and making sure that competitors are focused on your taillights. Get this wrong and you’re simply educating the market for your competitors to harvest. (Think: 2nd mouse gets the cheese.)

Stage 3: Charted Course

Definition: The category is codified as customers understand the problem you’re solving and that they have options for the remedy.

You’re in Charted Course if:

• Mainstream customers are buying, not simply early adopters.

• Sales teams are spending more time on differentiation than education.

• You’re losing sales to competitors, not to “doing nothing.”

Key challenge: Maintaining clear category leadership as recognizable brands enter the market.

Key opportunity: Capturing the majority of growth as the market expands. This can look like a classic land-grab moment.

Key message: Trust and leadership signals to the market.

Where to capitalize: Using your data or benchmarks as the leader to deepen your moat.

Common misstep: Resting on category leadership and not building defensibility.

Slack in Charted Course

The category was undeniably real as mainstream companies across sectors adopted structured real-time communication solutions. In an Empire Strikes Back moment, Microsoft launched Teams with aggressive bundling that made it a “free” alternative.

No one at this point was saying, “we’ll just stick with email.”

The lesson: Charted Course is when you must build defensibility fast. Network effects, ecosystem lock-in, and brand moats begin to matter more than feature velocity. Slack built some of these but didn’t have an answer for Microsoft’s bundling opportunity.

Stage 4: Crowded Waters

Definition: Everyone knows what the category is and why they need it. Now you’re fighting for market share of an increasingly crowded space.

You’re in Crowded Waters if:

• Increasing feature parity has made it easy to compare options.

• Price plays a more prominent role in differentiation.

• Sales cycles are shortening, but win rates are lower.

• Customer acquisition costs (CAC) rise as paid channels reach diminishing returns.

• Customer churn due to switching becomes more common.

• New entrants position as cheaper or better alternatives against category leaders.

Key challenge: Competing on delivery and efficiency on a defined playing field.

Key opportunity: Uncovering advantages in conversion rates, retention, or unit economics that translate into meaningful wins.

Key message: Proving differentiation or customer ROI.

Where to capitalize: Optimizing unit economics and operational efficiency.

Common misstep: Trying to create a “new category” instead of winning on execution. The winners optimize the machine, not reinvent it.

Slack in Crowded Waters:

COVID accelerated adoption of all workplace tools — one of the happiest professionals I ever met was a Zoom sales manager on a golf course in 2022.

As Microsoft Teams exploded its daily active users (DAU) through bundling, Slack needed to bulk up to survive in the saturated market. This led to Slack selling to Salesforce to reorient the fight between two Goliaths.

Slack’s category creation advantage was completely gone at this point.

The lesson: In Crowded Waters, operational excellence and strategic positioning (including M&A) matter more than innovation.

What This Means For Your Category

I’ve noticed founders overestimate their category maturity because they spend their days surrounded by customers who “get it.” But if your prospects still need education, you may be in an earlier stage than you thought.

Which growth playbooks should you run?

• Uncharted Waters: Build evangelists through product excellence, not a scalable sales machine. Market education and community building are your primary GTM motions.

• First Voyage: Lock in a category definition and yourself as the leader of it. Invest in brand, own the language, and build differentiation from user experience.

• Charted Course: Build or deepen your moats. Fast. Network effects, integrations, switching costs, and ecosystem lock-in matter more than feature velocity.

• Crowded Waters: Optimize relentlessly. Operational excellence, unit economics, and strategic positioning win.

Slack’s biggest mistake was that they didn’t build defensibility fast enough in Charted Course. Microsoft’s bundling advantage was predictable, but Slack didn’t have the switching costs or ecosystem lock-in to counter it.

By the time they reached Crowded Waters, Slack was already on its heels.

Understanding which stage you’re in is essential to running the right playbook. The tactics that work in one stage will kill you in another. Slack nailed the early stages (Uncharted Waters and First Voyage), but they had missteps in Charted Course and got squeezed in Crowded Waters.

Now you’ve got the framework to avoid the same mistake.

You’re also doing this in an auto industry dominated by 100-year-old brands with marketing arsenals that you can’t match.

• Billion-dollar promotional budgets with Super Bowl ads

• Dealership networks so dense that 90% of Americans live within minutes

• A century of cultural familiarity

Tesla had none of these. What it did have was a small group of early believers.

Early owners emphatically loved their cars and talked about them constantly — like, seriously, all the time.

Most brand builders would see this as a positive signal from the market (PMF) and divert resources to scale promotional budgets. (“We’ve got something here.”) The program at Tesla had a more ambitious vision, and there’s a timeless lesson in it for any business developing a new product in a new category.

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A referral program with a new goal

It’s surprising that Tesla’s referral program doesn’t get more attention.

While we’re only talking about a growth channel that accounts for a single-digit percentage of sales, two factors give it an outsized influence in Tesla’s overall growth story:

1. It acted as a critical bridge between early adopters and mainstream car owners.

2. Several percent is still $2 billion in sales, based on my math.

Rather than getting lost in the rewards and incentives, which are interesting but not novel, let’s dissect how Tesla turned its early customers into category educators, not just a sales channel.

If you’re building in a misunderstood or emerging category, like I am with Recurrent, here’s the part of Tesla’s playbook you need to steal.

Where traditional marketing fails

The hardest lesson I’ve had to learn at Recurrent is that you can’t battle beliefs with traditional marketing channels.

At least not with the limited timelines and budgets of most startups.

People still don’t understand electric vehicles. They remain worried about range, charging, battery degradation, fires, reliability, cold weather, etc. (I’d keep going but the scar tissue is real.)

A billboard wouldn’t resolve those kinds of objections.

It was not a new problem, but the solution was innovative for their sector. Tesla learned early that people trusted owners, not ads, and designed a referral program to align incentives.

Tesla’s Referral Playbook

Tesla’s referral mechanics were simple:

• Give owners unique links

• Reward both the referrer and the buyer

• Add status tiers and leaderboards

• Offer immediately tangible or high-prestige perks

Yeah, ok, those are mostly table stakes for a B2C referral program. Here’s what actually mattered for them when creating a new product category.

1. It lowered the barrier to peer education.

Most Tesla conversations happened organically. People stopped owners in parking lots. Neighbors asked questions. Co-workers wanted to know about charging.

The referral code gave owners a natural bridge: “Use my link if you end up buying one.” That shifted conversations from casual to something more intentional.

2. It created natural product demonstrations.

Everyone remembers their first ride in a Tesla. The big screen and instant acceleration create multi-sense wow-moments that break through whatever you believed before you sat in the car.

Activating their owners alleviated part of their dealership deficiency, and created something that dealers couldn’t replicate: the demo came from a passionate owner, not a salesperson.

3. It turned social proof into a distribution channel.

Today this is a basic tenant of influencer marketing, but it wasn’t when Tesla started the program. They created a marketing asset from customers pitching in their own voice.

EV creators (YouTube, etc.) remain Recurrent’s largest marketing investment for a lot of the same reasons.

• EV beliefs and habits are entrenched.

• Owners want to learn from other owners.

• Decisions about a $50,000 asset are easier with enthusiasm.

4. It built identity and community.

The referral program helped to create influencers from the ranks of owners. Top referrers had status inside the Tesla community and that created an opportunity to be part of something bigger.

The Education Engine

If you’re building a new category, the lesson to take is that a referral program is not a growth tactic, it’s an education system.

Here’s how I would think about the framework.

1. Find your champions.

Not every early customer is an evangelist. Based on lessons from Tesla, I would be asking:

• Who can I benefit as an individual with my brand? Giving them more influence, more income, more recognition.

• Why are some people already talking about our brand for free?

• Who will the audience that we need to educate want to learn from?

2. Remove any friction.

Consider all of the tools that would make teaching easier and build them. Most of us don’t have an attractive physical product like Tesla so this isn’t as easy as it sounds, especially in some B2B environments where there’s personal or professional risk in a referral.

It’s unlikely that this step is as simple as adding a “Refer a Friend” button in your product.

3. Reward education, not deals.

Both Tesla and Rivian have rewarded scheduling a demo drive. I’m sure both companies have modeled that back to revenue, but I think too many referral programs are structured like affiliates: they don’t reward the behavior, only the revenue.

Your revenue is your goal, it’s not their goal.

4. Capture the lessons.

Your customers may be better at explaining your product than you are. Find ways to document their explanations so they help to write your category narrative.

• FAQ pages

• Case studies

• Onboarding content

5. Build belonging.

People advocate for products they feel connected to. I don’t have much sage wisdom here, other than it’s probably not a private Slack group.

Your Education Engine

If you’re in a well-understood category or your product is self-explanatory, maybe education isn’t part of your referral program. But I think that’s a smaller list than most people realize.

For the rest of us, this case study on Tesla reminds us to activate the people who already believe in our category to educate those who don’t, while removing every barrier that makes that harder than it should be.

That’s how a handful of early believers helped fuel $2 billion in Tesla sales. Maybe it’s the fuel you’ve been looking for, too.

It was the pending removal of Apple CarPlay and Android Auto that lit up the internet.

From an article on The Verge:

“Barra confirmed GM will eventually end support of Apple CarPlay and Android Auto on both gas-powered and electric cars. The timing is unclear, but Barra pointed to a major rollout of what the company is calling a new centralized computing platform, set to launch in 2028, that will involve eventually transitioning its entire lineup to a unified in-car experience.”

The backlash was immediate and visceral. Customers read it as: “GM is taking something I love.”

Legacy Brands vs Category Creators

For established companies like GM, removing a feature triggers loss aversion.

While GM’s additions represented an abstract, future value, its subtraction hit an immediate emotional nerve. Behavioral economists call it loss aversion, and it explains why removing an expected feature can eclipse even the flashiest innovation.

GM’s logic is understandable, especially to Tesla or Rivian owners who have adjusted to closed systems. Patrick George pointed out in Route Zero that this is a key part of GM’s roadmap to a software-driven (and -funded) future.

Speaking of Tesla and Rivian, these abrupt changes are nothing new for their customers. Both brands make these types of quick shifts regularly. It’s something they have trained their customers to see an expected side effect of innovating as a category creator.

How Brands Navigate Loss Aversion

The most successful brand communicators lead with making the new world feel inevitable, then show how their solution provides continuity:

• Stripe: Rather than telling customers to stop building your own payment logic, they said that payments are now table stakes so here’s how to ship them in 7 lines of code. The loss (control) was reframed as liberation (speed).

• Notion: They didn’t say to abandon all wikis, docs or project management tools. They built import tools from every competitor and let teams gradually consolidate. The transition felt additive, not subtractive.

Marketers often position new releases as a leap forward: cleaner, smarter, faster. But the biggest barrier to adoption isn’t always skepticism about what’s new, it’s anxiety about what’s lost.

We need to protect the user’s sense of control and continuity. Make what’s new feel additive, not subtractive.

Our product roadmap may point to an elegant, vertically integrated future. But our customer lives in the present. Before we remove what’s familiar, make sure we’ve sold what’s replacing it, both logically and emotionally.