The dinner party test
How category-defining companies make their customers sound smarter
"We're building the next Stripe."
I hear this line constantly, and I get it. Every founder wants to build something that redefines how the world works. But here's what I've noticed: most companies that say this are building Stripe with better features and worse storytelling.
The conventional wisdom is that category-defining companies win through superior execution—faster shipping, more funding, better unit economics. But that's not the whole picture. They win because they make their customers sound smarter at dinner parties.
If you can't explain why someone uses your product without sounding like you're reading a spec sheet, you're missing the most important part of the equation.
The Dinner Party Test (And Why Most Companies Fail It)
Here's a thought experiment that'll save you three years of wondering why your obviously superior product is getting steamrolled:
Imagine your customer at a dinner party. Someone asks them about that new tool they've been raving about. Do they:
A) Launch into a feature comparison ("Well, it's 40% faster than X and has better integrations...") B) Tell a story about who they've become ("I used to be the person drowning in Slack notifications. Now I'm the person who actually thinks before responding.") C) Start a debate ("Most people think email has to suck, but I think that's just learned helplessness...")
If it's A, you built a product. If it's B, you built a category. If it's C, you built a movement.
People love to debate at dinner parties. The most memorable companies give their customers something worth arguing about. They take a stand that splits the room.
Airbnb customers will argue that staying in hotels and seeing a city via red double-decker bus tours means you're just a tourist, not actually experiencing a place.
Figma customers will debate that design handoffs are an outdated relic from the waterfall era, and any team still doing them is stuck in the past.
Tesla customers will argue that anyone still buying gas cars in 2025 is either uninformed or doesn't care about the planet.
When you solve problems, you get customers. When you give people better stories about themselves, you build movements. When you give them something to defend, you create evangelists.
What Actually Makes a Company Category-Defining?
It's about becoming the company that makes everyone else look like they're solving yesterday's problem.
But most strategy posts get this backwards: the best categories already exist—you just need to name them. You're not inventing something from scratch. You're pointing out a shift that's already happening and giving it a name.
Stripe saw that developer-first infrastructure was inevitable and got there first with the right story.
Notion saw that rigid software categories were dying and gave people permission to think differently.
Recognition beats invention every time. Most founders are so busy building they forget to look up and see what's already changing.
The Uncomfortable Truth About Why Great Products Fail
The status quo is your real enemy. And it has a massive, unfair advantage—it doesn't require anyone to change their mind.
Your product might be 10x better, but "better" is a logical argument. People make emotional decisions then rationalize with logic. Lead with features, and you're bringing a knife to a feelings fight.
The Category Creation Playbook
Forget the generic "find your niche" advice. Here's how category-defining companies actually do it:
Step 1: Spot the Inevitable Shift
What's already changing that makes your approach unstoppable? Focus on how people behave, not what technology can do. Technology changes fast, but behavior changes slowly. When behavior finally shifts, it creates massive opportunities.
Loom spotted remote work before it was cool. They watched people trying to explain things over Slack and thought "this is insane."
Discord saw gamers wanting to hang out between games. They built for community in the margins.
What behavior shift are you riding? If your answer is "people want things faster/cheaper/better," dig deeper.
Step 2: Take a Stand (Make It Controversial)
Strong categories need tension, and the best tension comes from having an opinion that splits people into camps. You want some people to disagree with you. That's how you know you've said something worth remembering.
Liquid Death fights the idea that water has to be boring. They made hydration punk rock, and some people think that's ridiculous. Perfect.
Superhuman fights the idea that email has to suck. They charge $30/month for email, and plenty of people think that's insane. Also perfect.
Patagonia fights the idea that companies exist purely to maximize profit. They tell customers not to buy their products unless they really need them. Controversial? Absolutely. Memorable? Even more so.
What belief are you challenging? What opinion do you hold that would make some people at a dinner party roll their eyes? If everyone agrees with you, you're being too safe.
Step 3: Create New Language
Give people a smarter way to talk about what you do. The best new language feels like a realization they always knew but couldn't articulate.
Before Uber, you "called a cab." After Uber, you "got an Uber." They turned their brand into the action itself.
Before "product-market fit," startups just "figured out what customers wanted." YC gave us language that made building companies feel more scientific.
Before "customer success," companies just had "support." The rename reframed the entire relationship from reactive to proactive.
What new phrase are you introducing that makes people sound smarter when they use it? If people are still using old language to describe what you do, you're building a substitute product in an existing category.
Step 4: Build the Mythology
This is where most founders stop, and it's exactly where category-defining companies double down. You need to move from utility to identity.
The most powerful brand mythologies work backwards. They reveal identity instead of promising transformation.
Nike's genius is telling people "you're already an athlete, here's proof." They validate existing identity rather than selling transformation.
Apple takes the same approach: "you're already creative, here's the tool that proves it." Both brands recognize something in their customers that customers already felt but couldn't articulate.
What hidden identity are you revealing in your customers? What are you helping them realize about themselves that they already knew but couldn't articulate?
Three Ways to Kill Your Category Before It's Born
"We're better than X" just makes you a feature in someone else's comparison chart. If your positioning depends on someone else's product, you're auditioning for second place.
Building for "3-5 years from now" instead of right now. The best categories feel inevitable in hindsight but obvious in the moment. If you're constantly explaining why your market will exist someday, you're either too early or too wrong.
Trying to own everything instead of something specific. Facebook started with "social networking," then expanded. Amazon started with books, then became the everything store. Tight definitions create strong positions.
Why This Matters More Right Now
AI is about to make every product category more competitive. When anyone can build anything, the only defensible moat is the one that exists in people's minds.
But here's the opportunity: AI is also making human insight more valuable. The companies that win will understand people deeper than algorithms can reach.
The future belongs to founders who can see around corners. Who spot the shifts that haven't been named yet. Who build meaning as fast as they build features.
The Real Bottom Line
Winning has nothing to do with being slightly better. You win by making everyone else look like they're solving the wrong problem.
The "wrong problem" is always emotional, never technical. Their solution works fine—it just doesn't matter to anyone.
Category-defining companies change minds before they change markets. They create believers who become customers, rather than customers who might become believers.
The question isn't how to compete. The question is why you matter.
Because the companies that win are the ones that make their customers sound smarter at dinner parties.