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Lemonade Insurance: How Category Creators Talk, And Why They Sound So Different From The Competition
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Lemonade Insurance: How Category Creators Talk, And Why They Sound So Different From The Competition

Do you hear that?

Category Pirates πŸ΄β€β˜ οΈ's avatar
Category Pirates πŸ΄β€β˜ οΈ
Jan 28, 2021
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Lemonade Insurance: How Category Creators Talk, And Why They Sound So Different From The Competition
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Arrrrr! πŸ΄β€β˜ οΈ Welcome to a πŸ”’ subscriber-only edition πŸ”’ of Category Pirates. Each week, we share radically different ideas to help you design new and different categories. For more: View the mini-book archive | Listen to another category design jam session | Dive into an audiobook | Enroll in the free Category Accelerator email course


Dear Friend, Subscriber, and fellow Category Pirate,

Every company talks about themselves to multiple audiences via several functions:

  • Talking to current and prospective customers (e.g., marketing)

  • Retaining current and recruiting future employees (e.g., human resources)

  • Informing current and reaching new investors (e.g., investor relations).Β 

  • Communicating with your ecosystem of suppliers and partners (e.g., partner marketing)

All four audiences are critically important for a company.Β 

With the advent of marketing mix modeling and multi-touch attribution, marketing is the furthest along in terms of using analytics to optimize its return on investment. But having studied investor relations content for the Fortune 100 fastest-growing companies, our sense is investor relations is the weakest of the four.

Too many companies treat investor relations (IR) as a financial function whose job is to communicate numbers. While that of course matters, growth investors do pay for prior performance. They invest in category potential. Savvy investors know that growth can only happen in high growth categories. They further understand that one company earns the vast majority of the value created in the category. Category potential is part of why Apple is worth two trillion dollars and counting, and Dell is worth $56 billion.Β 

Which is why we want to call out what Lemonade, the potential category queen of insurance, is doing with their shareholder letter and investor video combination. They use a classic narrative structure of β€˜garden of Eden’, β€˜the fall’ & β€˜redemption,’ which is how #categorycreators talk: the category as the main character, with competitors & their brand as supporting actors.

Take a look at the 1st paragraph of the letter from the co-founders of Lemonade. It is a love letter to the insurance industry (e.g., the β€˜garden of eden’ chapter).Β 

Since the dawn of time, insurance has both propelled progress and been revolutionized by it. Early humans risk-pooled intuitively, earning a claim on communal provisions in bad times by sharing their bounty in good ones. The Agricultural Revolution transformed risk pooling from an adaptive instinct to a facet of trade, with β€˜assurance’ included in loan agreements throughout antiquity. A slew of inventions in the 14th century triggered the Commercial Revolution, which saw the ousting of lenders from insurance, and the inauguration of the first insurance companies. These thrived until the Scientific Revolution, when the discovery of probability theory signaled the toppling of every insurance company that predated it, and the emergence of the insurance dynasties that have reigned ever since.Β 

This is an incredibly beautiful expression of what insurance is and can be in its more glorious state.Β 

Lemonade is evangelizing their category. Not their brand.

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