Before the dot-com crash, before SaaS, and before multi-cloud, Eric Olden was creating new market categories. In a recent episode of Category Visionaries, the Strata Identity CEO shared insights from creating three successful market categories across three decades. Here are the key lessons that emerged.
1. Start with Problem-Market Fit, Not Product-Market Fit
“A lot of times, people talk about product market fit. Before you can have a product in the market, you got to have the market in the first place,” Eric explains. His approach focuses on problem validation before product development: “What is the problem that you’re solving? That if you aggregate all the people solving that problem, does that create a market?”
This isn’t just theoretical – at Strata, they spent “almost whole year just interviewing companies and say hey, what were your biggest problems?” before writing any code.
2. The ‘Dirty Dozen’ Framework
Eric’s framework for early customer validation is both simple and profound: “We call this in practice the dirty dozen. And it’s an easy number to remember. Twelve is a good sample size.”
But the key insight isn’t the number twelve – it’s what comes next: “Of those twelve, who do we want to build the product for? And the answer is, not all twelve. It’s usually probably somewhere between six and eight of those twelve that you say, look, they have the same problem and they’re all happy with the same solution.”
3. Prioritization is Everything
Many founders mistake interest for priority. Eric’s litmus test is clear: “If the problem that you’re talking about isn’t the top one, two or three priority for the people you’re talking about, then you may build a product, but it’s not important enough for people to do much with it.”
The validation process is equally clear: “The gold standard is whether they’ll pay for something or not. And the gold standard being that they’ll spend money with you, the next one after that is they’ll spend time with you.”
4. Content Should Follow Customer Language
When Strata started in 2019, “no one was going into Google and searching for identity orchestration.” Instead of pushing their category term, they met customers where they were: “What they were doing is they were searching for their problem.”
This led to content addressing specific challenges: “How to manage two identity providers. We use Okta and we use Microsoft. How do we make them work together?” Over time, this problem-first content strategy led to category ownership.
5. Market Education Never Stops
Even in 2024, with the category established, Eric’s focus remains on market education: “Market the vision and sell the product.” This manifests in their approach to content: “We’ve really oriented our go to market message around a very concrete, tangible set of value propositions, solving very tactical things.”
The Evolution of Category Creation
Eric’s experience spans three major tech shifts:
- Web security in the 1990s
- SaaS adoption in 2006
- Multi-cloud in 2019
Each wave required a different approach, but the fundamentals remained constant: “If it was easy, anybody would do it and we wouldn’t have an opportunity,” Eric notes. “I know that may sound counterintuitive, but it’s got to be hard, or you’re just going to have too much competition or zero competition because no one else wants to do it.”
Avoiding the AI Trap
Eric sees parallels between current AI hype and previous tech waves: “What I see there is a lot of what we saw in the nineties, where people are now just saying whatever the business problem may be, and they’re going to throw some AI onto it, as if that somehow makes it a good thing, and it doesn’t.”
This perspective reinforces his focus on solving real problems rather than chasing trends.
The Long View
Category creation requires patience. At Strata, “Over a long, many years of time, you start to build authority in that space.” This authority comes from consistently solving real problems, not just marketing new terminology.
The key to successful category creation isn’t just being first – it’s being right about which problems matter most to customers. As Eric’s experience shows, creating a category isn’t about clever naming or marketing buzz. It’s about identifying, validating, and solving important problems in ways that create lasting value.
For founders aspiring to create new categories, the message is clear: start with customer problems, validate priorities rigorously, and be patient in building market understanding. The best categories aren’t created overnight – they’re built through consistent focus on solving real customer challenges.
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