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Dear Friend, Subscriber, and Category Pirate,
When the market breaks, category designers get to work
Pirate Eddie was on Schwab Network last Friday.
The data he walked through wasnât encouraging.
Disposable personal income down 1% in February. Personal consumption expenditures up 5%. GDP at 0.5% last quarter, down from 4.4% the quarter before. Michigan consumer sentiment is sitting at 47.6%, down 11%.
Consumers are spending more than they have and feeling worse while they do it.
Is that bad news for you?
Only if youâre playing the old game.
Smart money is already moving.
While most companies are playing defense, smart money is making directional bets on what comes next.
Costco is building gas-only stations for the first time in company history. A 40-pump station is already open in Mission Viejo. A 240-pump station is planned for Honolulu in 2027. That is a CapEx commitment that says: we believe high gas prices and inflation are the new operating environment.
Anheuser-Busch just bought 85% of Beatbox Beverages for half a billion dollars.
Why? Because while wine is down 7.7%, spirits are down 4%, and beer is down 4%, Beatbox did $340 million in retail last year at 50% year-over-year growth. Sweet and spicy cheladas. Off-premise occasions. Music culture identity. A container designed for how younger consumers actually want to drink.
Beatbox didnât beat the beer category. It created a new category.
And Anheuser recognized what was happening before it was obvious.
Down markets donât shrink categories. They sort them.
When consumer spending contracts, it doesnât contract equally. Nice-to-have dollars shrink. But they donât disappear. They get redirected.
Consumers stop spending on things theyâve already done. Things theyâre bored of. Things that feel like more of the same.
They choose different.
And that is not a headwind for a category designer.
When people stop spending automatically and start choosing deliberately, the question becomes: what are they choosing between? Who named the problem they didnât know they had? Who framed the decision before anyone else thought to?
Thatâs your job.
The companies bleeding right now optimized for execution inside someone elseâs map. The ones gaining ground built their own.
Beatbox didnât ask how to win in beer. Costco didnât ask how to compete on gas price. They asked: what category could we design that doesnât exist yet where we will win?
That is exactly the question this market is demanding right now.
There is no better time to build a new category
A down market feels like bad news. But for category designers, contraction is signal. It tells you precisely where the old map stopped working and where the new one needs to be drawn.
When consumers choose different, they need new language to describe what theyâre choosing. They need someone to name the problem. They need a category that didnât exist before.
Category designers donât just do well when markets contract. They stop being at the mercy of market cycles altogether.
When you own a category, youâre not competing inside someone elseâs shrinking market. You set the price. You define the problem. You decide what winning looks like.
The economy shifts around you, not beneath you.
Thatâs how your lifeâs work compounds.
If that framing resonates, there are two ways to go deeper.
The Category Design Academyâs next cohort begins May 4. Applications close April 27. This is where people whoâve been most right about something for the longest time finally get the language, the frameworks, and the structure to build around it. Apply here.
If you want a thinking partner that will push back on your category thesis and help you name the problem no one else is naming, The Pirate Eddie Bot is built for that. Itâs the only AI trained on category design and Creator Capitalist, and it comes with a Founding membership. Become a Founding Subscriber here.
Arrrrrrr,
Category Pirates đ´ââ ď¸
Eddie Yoon
Christopher Lochhead
P.S. â Your superconsumers are also sorting their categories. Including yours.
The question is whether youâre building the category theyâre choosing next.
New markets donât just need new products. They need new language. The companies that win in a down market are always the ones who named what was happening before anyone else had words for it. Beatbox didnât just make a different drink. They named a different occasion. Costco isnât just selling gas. Theyâre naming a new kind of membership value.
And it starts with language.
The Academy is where that language gets built. Not handed to you, but excavated from what you already know, sharpened by a room of people working on real things, and stress-tested until it holds.
The books give you the model. The Academy gives you the room to build with it.
If youâre ready to name the category this market is creating space for, applications close April 27. [Apply here â]
Not ready for the Academy? The Pirate Eddie Bot is the only AI trained on Category Design and Creator Capitalism, and itâs included with a Founding membership. [Start here â]