 Aloha everybody. Thank you so much. I am here to talk about category creation, so welcome. If you're not here to talk about category creation, you might be at the wrong place, but good. Destination check. All right. So my name is Yi. I helped start a company called Terra Formation about three years ago. Terra Formation's mission is to help reforest about three billion acres of land across planet Earth and to re-sequester a gigatons of carbon dioxide as part of a solution to climate change. The way that we're doing this is by creating a new category within the forestry industry called a forest accelerator. And you can think about forestry like many other industries. It has sort of sectors and subsectors. There's people that do timber forestry. There's people do like timber management companies. There's people that do carbon forestry. So we're creating a new category within this space called a forest accelerator. I'll tell you a little bit more about that as we go. But before doing that, let's just set the stage for category creation overall. I've been very fortunate in my career. I started in Silicon Valley. I grew up there. I spent 25 years working on tech startups and I've had a chance to be part of many category creating kinds of companies. And so you might recognize some of these brands. PayPal, I had a chance to be one of the first 100 people there back in 2000. Obviously an early pioneer in the online payment space. And I think these days, there's sort of like a claim to fame, I guess, for PayPal as being the first online payment network to reach truly global scale. And there's a bunch of famous alumni that have come out of the company. But I've been a part of a few other category creating companies too, like Catango, pioneering in the social algorithm space. We were the first to apply machine learning and clustering to social data, vouch financial, another category creator in the social credit core space, and then terra formation now as a forestry accelerator in the space of forests. And so the thing that I would want to impress upon you, though, about category creation is that people never understand what a new category is when you first get started, right? Like when PayPal in the early days, people literally thought, okay, it's just sort of like this online wallet is placed to store money, and you somehow earn interest on like the money that I give you or something. At Catango, people thought we were just like another chat app. At terra formation now, people think, okay, you're just planting lots and lots of trees, and you were just like a tech company somehow, right? So being a category creator means that very often you're just misunderstood, right? There's a really, really key challenge around category creation, which is just constantly having to repeat and explain and constantly educate about what your category is, what you do, why it's important. And so if you are in the act of creating a new category, you just prepare yourself. You're going to sound like a broken record. You're going to constantly be explaining what it is that you're doing. So I also want to use this session to not draw artificial distinctions, right? Like if you're in the business of creating some new video, sharing application, and you firmly believe that your eight second long video clips are just a completely new category and are completely revolutionizing the space compared to TikTok's 10 second videos, great. That's awesome. Good enough, right? If you feel like you are in the act of creating a new kind of company, then today we can be inclusive. Everybody who thinks of themselves as innovating and creating a new kind of company can be, let's consider ourselves category creators, all right? So there's a bunch of basic stuff that I'm going to assume that everybody in the audience either already knows or knows how to get access to. Because category creation is all about education and it's all about explaining what you do, these fundamental skills in entrepreneurship about how you communicate, like the channels of how you communicate with different stakeholders. I'm just going to assume that you already have that information or that you know how to go do these things or there's tons of videos and entrepreneurship podcasts and books even about how to run customer discovery or user research processes or iterate quickly on products. These are key ways that any company creates a channel of communication to put out information into the market and get feedback back from a stakeholder. So as long as you are good at these, just solid on these fundamentals, then we can proceed and talk about category creation. I would say I would want to focus the rest of today's session on different stakeholder groups, like assuming you've already got these good channels to talk with these different stakeholders, the question is, what do you say? What do you put into these channels as a category creator? What do you say to investors? What are the phrases that you use to speak to customers, to competitors, to your internal team? So I'm going to structure the rest of today's conversation about the stakeholder groups and I'm going to try to give you some examples that hopefully will be useful from Terra Formation's own journey. I'll show you exactly what Terra Formation says to each of these stakeholders. Maybe if we have time at the end, there's a little one of the thing too that I can get into personal anecdotes. But yeah, so let's dive into that. First up, investors. So I figured for Slush, one of the largest startup and venture capital conferences in the world, we should probably start off with investors. And unfortunately, the thing I would want to impress upon you, if you're an entrepreneur talking to an investor, they don't actually like this term called category creation. Venture capitalists hate risk, right? Like the thing that VCs, like the thing they don't want to do is invest in some risky startup that doesn't that has some brand new products, some brand new channels, some brand new customer segment they're trying to hit that nobody's ever done before, right? So if you go in, you say, hey, I'm creating a new category to a venture capitalist that honestly that just sounds like this is new and risky, right? Tough to bet on, right? So you want to be really, really explicit. If you're if you're an entrepreneur and you're talking to venture capitalists, you want to be really explicit about what is new versus what is proven in your business. And there's lots of decisions that you get to make as an entrepreneur, you you're putting together your team, you're putting out of your business plan, you're, you're, you're laying out your product roadmap, all that, right? All of these are different decisions that you get to make as an entrepreneurial team about what like how how much do we want to turn the dial towards the new versus turn the dial towards the proven, right? You can you can hire a team of people that's worked together for for decades, went to the same university, right, has worked on companies previously. Great, that's a that's a proven team at least of doing things together, even if you're working in maybe like a different product or tech segment than than you have before, right? So you can choose, right, like how how far on the extremes you want to push on the new versus proven dial for terra formation. So these are the actual things that we have said to investors during and like our venture capital pissage, we always start off with saying that forestry is a very well proven, super old, like centuries old, very well understood way of creating economic value, right? We want to be really clear that like the economic model behind forestry is not new. We are not innovating on that at all. Rather, the one thing that terra formation does do, like the thing that we're the new innovation point for terra formation is instead of doing one bespoke project at a time, which tends to be the way that forestry projects today are underwritten, like people look at they look at a piece of land, they underwrite it, they figure out, you know, how to invest in it, etc. So rather than just doing one project at a time, our company focuses on parallelization, right? Like how do we start thousands of forests all at the same time? And we just try to be really clear, that's the one new thing about terra formation and everything else about the company. We're not inventing, we're not, you know, bioengineering new kinds of trees, we're not working on drone tech for planting seeds or anything. Literally everything about the company is old school, and there's this one new thing, right? So hopefully that's a key point for you to keep in mind as you think about investor communications. Let's talk about customers. Another really key factor, a key stakeholder for startup companies. One thing that I'd like you to keep in mind when you think about early stage customer development for new categories is who are you talking to? Like what's the customer segment that you're addressing? If you're talking to early adopters versus main folks that are in the early mainstream, you're going to have very different messages in talking to each of them. For early adopters, you're going to appeal to shared vision, you're going to appeal to innovation because they actually want to be first. They're happy to be experimenters and trial users for your new category. Whereas if you're talking to early majority, then you really want to start to frame your value proposition in terms of things that they already understand. Not in terms of your new category, but in terms of an old category, and I'll give you some examples of that. And then analogies, like analogies, business analogies that people might understand will start to become a pretty useful communication mechanism for customers. So for terra formation, specifically these are actual messages that we put out there for early adopters. It was that appeal to mission, like help come solve climate change with us. That's like a very aspirational, huge mission that certain kinds of customers can sign up for. And we really appeal to the latest science. If you're a customer and you're an early adopter, you're out there on the leading edge, you're really out there pushing the boundaries of what science tells us about carbon and forestry and how to capture a lot more carbon out of forests. Once we start talking to early majority customers that are like corporate buyers, people who have a budget and they're trying to stay within their budget to make some forestry impact, then we have to think a lot about why do current, like before terra formation, what's the current category like for carbon forestry? And people generally today, corporates will invest in forests for carbon credits. So then a lot of our terminology starts to get framed in terms of things that current customers or current categories would understand. Certain number of dollars come in, a certain number of forestry teams get created for millions of tons of carbon credits. And we'll start to appeal to analogies that folks might understand, that refer back to existing categories. So we might claim things like we're the Y Combinator of forests. So using analogies, using the terminology that your customers already currently understand will become a key way to convert people to your new category. Partners. It's another really key thing. If you're trying to build a new category, then you're going to try to create an ecosystem around this thing. And so you need partners. And one thing that I think category creators sometimes fail to keep in mind is the fact that their early customers may actually turn out to be their best partners because your early customers, your early adopters are the folks who actually know the most about what it is that makes your industry work. They're the people who actually have bought into it. And when people get into the sales mode, I'm sure you've all done this, you start to think of a sale negotiation with a customer as a zero-sum game. There's a certain pile of value and how much of it can you take. I've heard a lot of business pitches from startups that say things like, yeah, we've developed this new technology or we've got this lock-in network effect around our business. And so over time, our margin structure is going to increase. Signaling things like that means you're going to enter into a zero-sum negotiation. You're going to try to increase your share of the pie rather than thinking about as a category creator, how do I just grow the pie? You should actually be willing to take a slightly smaller slice of the pie even over time, as long as you're dramatically increasing the size of the pie. So here's some things, some actual talking points that Terraformation uses to help convert early customers over into partners. Like anytime that I'm in a pitch and I see somebody's like really leaning in, really interested in our concept, I'll say phrases like, hey, let's form a joint accelerator. Let's do this together. Let's go start a hundred times more forestry teams and let's share in the carbon credits. Like I'm totally happy to give up some Terraformation economics to help grow the pool, to grow the pie. And there's a lot of other phrases, obviously things that will be tailored more to your particular categories, but a lot of phrases that you can use about encouraging, you know, pie growth kind of mentality rather than, hey, I'm going to negotiate with you and try to squeeze the best deal out of a particular customer. Competitors. So this is an area where really I think a lot of category creation companies end up kind of thinking like in product mode rather than in category mode. So how often have you guys heard like the claim like a startup says, oh, we're a brand new category. We have no competition. Nobody's like us, right? If you, unfortunately, if you make the claim that you have no competitors, then that literally means your market size is one company, you, right, which has a bunch of bad side effects for category creation. Also is really bad for your venture capital valuation. If you literally have a total available market of your revenue, then congrats, you just got valued at one X forward revenue. Not a good thing, right? So this is actually a really hard problem for category creators because you have to figure out how do you differentiate yourself continuously even as your category grows, while at the same time invite in more competitors because competition like more companies just like you actually means that you now actually have a valid and growing category, right? So there's this balance between differentiating versus inviting in more and more competition. For terra formation, we specifically, we literally take sort of a thought leadership approach here. We literally try directly to encourage competition. We talk about like have published, you know, publicly and publicized and pushed the distribution of two white papers that talk about this multi trillion dollar market opportunity in our in our market and we're trying to invite, trying to incentivize more people to come and join. In our in our marketing pitches, we talk a lot about just how huge the space is, like three billion acres. I kind of tossed that term out there earlier on, but three billion acres, that's literally like the size of the United States plus Mexico combined, right? It's a huge land mass that we need to cover collectively and there's no way that we ourselves will ever do it. So we feel very comfortable kind of taking that thought leadership opportunity and just setting the stage for everybody else to come and plug in their efforts. And this is not just talk, right? Like terra formation actually walks the walk. We literally take all of our technology, the hardware, seat banks, the software that we've developed to come manage and parallelize our forestry projects and we open source everything. So we literally want to encourage competitors to come check out what we do, take the best of our learnings, take the best of our technology even, right? And go do it themselves. Go do it better and faster than us and we can all improve the category by observing each other, right? So that's a key sort of mental bit to flip, right? Instead of thinking about competitors as these, you know, people you really want to hunker down and hide from or be stealthy with, really thinking about how do you encourage competition to come into your space. That's a really key different thought pattern that I think category creators need to engage in. Okay, last but definitely not least is your internal team, right? And if you're going to do a category creation exercise then you should just get ready, prepare yourself for a bunch of really hard, difficult conversations. I mean, in some of these things I was just talking about in the slides before, right? There's actual difficult trade-offs to make as a category creation startup, right? There's really just technically difficult decisions to make about how you position to differentiate while the sill time, you know, same time bringing in competitors, etc., right? So your team is going to be faced with unique and difficult trade-offs. You should just expect the team is going to pivot more than usual. And because the fact that it is, if you're doing something truly new, distinctive, like a new kind of company, right? Every single person hired into your company guaranteed they're going to be doing something at your company that's different than what they thought they might be doing when they first came in, right? So just expect there's going to be more pivots, there's going to be more debate, there's going to be more team churn as a result, and expect that once people get put under pressure, under pressure of job performance, time, budget constraints, right? They're going to get defensive. In general, people will always resort to defending their own role, defending the company, right? Potentially, if they're magnanimous even, right? And they won't think as much about how do we help create a category? So as an entrepreneur, you're constantly going to have to get out there and push for your own team. Think about the category, guys. Don't think just about your own role, don't think just about our own company, but think about, like, this whole category that we're trying to create, and what are we doing to further that objective? So just some examples of what we've done specifically at Terraformation. We have actually specifically gone out and built a very diverse team. We've hired people from all around the world. We cover most of the world's time zones. We have a very even gender balance. We have lots of different academic disciplines. We've got, like, you know, PhD level botanists, and PhD level carbon scientists, and soil scientists, and physicists, and really trying to, you know, take a very broad view of the, of all the factors related to, to our mission, which means that people just don't see eye to eye, and we say that. We explicitly tell that to new employees, like, get ready to join this company. You're going to debate a lot. You're not going to, it's okay. You're not always going to agree with your colleagues. Doesn't mean we hate you, right? We've actually value each other's opinions, but get ready to debate, because it's just that kind of culture. And you may want to think about things like investing in just directly, like, formal team coaching, or executive coaching, formal communication coaching, right? Things like that will actually help facilitate your, your team as it's going through this sort of debating kind of a, kind of a process that's just going to be inevitable around category creation companies. All right. So at Terraformation we even kind of wear this on our sleeves. We literally have made this a company value. So if you talk to people from, from Terraformation, they will literally cite this as one of the company values. Start the impossible, right? So it just, we just know that it's part of our DNA to do really hard things, to tackle them one by one, and that's that you can, you can actually make culture moves like that. You can weave this into your, to your team culture if you're a category creator. All right. So thanks just another gentle reminder. So Terraformation is actually trying to save the world through carbon sequestration, a massive scale. If you're interested in talking with me about that, I'll be around afterwards. There's like a mentoring session in a little bit. And it's good. I have a couple of minutes here. So I'm going to leave you with one more thing, which is category creation is hard for venture capitalists and investors as well as for entrepreneurs. So I've, I've been a venture investor. I, I, I think I've done about 120 different angel investments just as a, as an individual investor. And true story, I was actually the very first angel investor in this augmented reality company that was making like cool goggles and like gesture based, you know, human interface innovations. And this company is called Meta. It's the very first angel investor in this company. Unfortunately for me, this was 2012 and the wrong Meta. Well, I mean, great, great team. They were making incredible innovations. But yeah, this company was in 2012 and went out of business. Subsequently, Facebook rebranded itself as Meta and now is like super huge in augmented reality with its Oculus headsets and all of that. But like point being, right, like even if you get the category right, right, timing is hard, picking a team is hard, picking the company, the right product set is hard. And so yeah, there's a lot of difficult things about category creation. I would just encourage everybody, right, start the impossible. If you're doing this kind of adventure, get ready, brace yourself. It's going to be a difficult thing, but you can do it. Take it step by step. Think about your your your your stakeholder groups and exactly how you communicate with them very consciously. And you can do it. All right, everybody. Thanks so much.