Imagine you’ve just invented a new kind of toothbrush. It’s sleek, it’s powerful, and it cleans better than anything else on the market. You’ve spent months on the design, the packaging, and the pricing. But after launch… not much happens. Sales trickle in. Customers are confused. And the biggest question you keep hearing is: “How is this different from what I already use?”

That’s the moment many entrepreneurs face. They build a great product — but forget to build a category around it.

Let’s talk about the difference between a product and a category. It might sound like a small thing, but it’s the difference between a product that fades away and a brand that dominates.

So, What Is a Product?

A product is what you sell. It’s the thing you make. It could be a toothbrush, a phone, an app, or even a service like coaching or photography.

But here’s the catch: products live inside categories. And if your product doesn’t clearly belong to one — or better yet, define one — people don’t know how to think about it.

The human brain likes shortcuts. We sort everything into categories: drinks, clothes, fitness programs, apps, cars. If something doesn’t fit a category we know, we don’t know how to talk about it, compare it, or buy it.

That’s where category comes in.

So, What’s a Category?

A category is the mental box your product lives in.

Take Red Bull. It didn’t try to compete with Coca-Cola or Pepsi. Instead, it created a new category: the energy drink. Red Bull wasn’t just a better soda. It was a different kind of drink, meant to give you wings. That new category gave Red Bull room to grow. Today, it sells over 11 billion cans a year globally.

Or think about Airbnb. It didn’t launch as a cheaper hotel. It became the leader of an entirely new category: home-sharing. That gave Airbnb a unique space in the travel industry. And now it’s worth over $90 billion.

In both cases, the product was important. But the category gave it meaning.

Category First, Product Second?

Not quite. You need both — but you need to design them together.

Take Apple’s iPhone. The phone itself was impressive, but what really changed everything was the category it created: the smartphone as a digital lifestyle hub. Before that, phones were for calls and texts. After the iPhone, a phone became a camera, a music player, a web browser, a map, a social device, a tool for work. It was a whole new category — and Apple owned it.

That’s why BlackBerry, even with its better keyboards and security features, slowly faded. They had a product. Apple had a product and a category.