The Uncomfortable Truth: The Market Will Crown a Leader
- Feb 24
- 6 min read
Updated: 6 days ago
And it's already deciding — whether you're ready or not.
Most founders I talk to say they want growth. And that's fair — growth is the goal, growth is what investors want to hear about, growth is how you measure momentum.
But here's what markets actually reward. It's not growth.
It's the default choice — the company that buyers assume is the standard before they've even started evaluating options. The vendor that gets shortlisted without having to fight for it. The name that gets typed into a procurement brief before a competitor is even considered.
And once the market makes that call, the category economics do the rest. Trust is pre-sold, so growth gets cheaper. Selection momentum compounds, so market share widens. Pricing power shows up, so margins improve. Valuations expand — because leaders earn higher multiples than also-rans.
That's what category leadership really means. Not a title on your website. Not a claim in your pitch deck. Compounding advantage.
The brutal structure most founders don't plan for
In any category that matters, the end-state is rarely a happy group of competitors sharing the market and all doing fine. What actually happens is this: one company becomes the default vendor — the category leader with ecosystem gravity and pricing power. A couple of credible alternatives survive in niches or as bundled solutions. And then everyone else ends up in what I call the peanut economy: discounting to win deals, fighting long sales cycles, struggling with fragile retention, and grinding for growth that never quite compounds the way it should.
Not because those teams aren't talented or working hard. But because consolidation is an external force. It doesn't care about your roadmap, your recent funding round, or how good your NPS score is.
The research backs this up starkly. According to Play Bigger — who studied 35 category kings across technology markets — category leaders capture 76% of the total market cap in their category (Play Bigger, 2016). That leaves every other competitor fighting over the remaining 24%. Not a competitive market. A decided one.
Consolidation doesn't ask for your permission
As a category matures, buyers get tired. Genuinely exhausted — tired of evaluating endless vendors, tired of justifying risk internally, tired of integrating yet another tool into their stack and retraining their teams every 12 months.
So they converge. They standardise. They pick what feels safest, most future-proof, and most widely adopted. That's consolidation — a market-level compression of choice.
And if you're not already positioned for leadership when that wave hits, you don't get "challenged." You get relegated.
Because by the time consolidation starts, the market is already quietly locking in the narrative around the problem, the default distribution channels, the integration standards, and the internal procurement comfort. At that point, you're not competing on product features anymore. You're competing against momentum and perception — which is a very different and much harder fight.
When the crown moved: the Webex to Zoom story
Here's a real example that shows how fast this can happen — and how brutal the category economics get once a leader is dethroned.
In 2006, Webex owned video conferencing. Not "led" it — owned it. At 66% market share, they were the textbook Gorilla. So dominant that Cisco paid $3.2 billion to acquire them. Microsoft was the distant Chimp 1 at 20%. Everyone else was splitting scraps.
Webex Top Web Conferencing Software 2006] Source: Sonary.com / Statista. Gorilla/Chimp/Monkey framework: Geoffrey Moore, The Gorilla Game
At that moment, Webex looked untouchable. Cisco's backing, deep enterprise relationships, embedded in procurement processes across thousands of companies worldwide. If you'd asked anyone in 2006 — or 2010, or even 2015 — who owned this category, the answer was obvious.
Then the category shifted.
Not because Webex got lazy. Not because Cisco stopped investing. But because Zoom read where the market was heading — toward frictionless, consumer-grade simplicity — and built for that new definition of the category while Webex was still playing the rules of the old one.
Zoom didn't win because it had a marginally better feature list. It won because it became the default during a moment of category acceleration — the shift to remote work — and then the economics compounded on themselves. More meetings hosted meant more invites sent, which drove more adoption, which created more IT comfort, which led to more standardisation, which attracted more integrations, which deepened stickiness.
Once "default" happens, growth becomes self-reinforcing. And fifteen years after Webex sat at 66%, this is what the market looked like:
Zoom Top Video Conferencing Software 2021] Source: B2B video conferencing market share data, 2021. Gorilla/Chimp/Monkey framework: Geoffrey Moore, The Gorilla Game
Zoom at 50%. Microsoft Teams — the Chimp 1 again, now reborn as Teams — at 23%. And Webex, the company that held 66% and commanded a $3.2 billion acquisition price, sitting at 11%. Chimp 2. One tier above the Monkeys.
TeamViewer at 8%. Google Meet at 4%.
That's the peanut economy, right there in a pie chart.
A lot of founders tell themselves they'll figure out category positioning later — once the product is more mature, once the team is bigger, once the timing feels right. Webex had 16 years of category leadership and the full weight of Cisco behind them, and they still got dethroned when the category shifted underneath them.
That's what "figuring it out later" looks like.
The market wasn't waiting. It was deciding. And by the time Webex understood the new rules of the game, the crown had already moved.
What happens if you don't aim for leadership early
If you don't design for category leadership from the start, you usually drift into a familiar and painful spiral.
You chase broad traction, so your message blurs. Wins start looking inconsistent, so buyers hesitate. Sales cycles stretch, so discounts creep in. Retention gets fragile, so growth gets expensive. And before long you're working twice as hard for half the return — while someone else captures the compounding upside you were always capable of.
You don't necessarily fail. You survive. But you end up in the peanut economy — grinding for smaller slices of growth, share, and margin, while watching the category consolidate around someone else.
And then the most uncomfortable realisation hits:
The market was making its decision while you were still figuring yours out.
Why you need to aim for leadership from day one
This isn't about ego or being the loudest voice in the room.
It's about being clear-eyed and honest about how categories actually resolve. The Play Bigger data is unambiguous — category leaders don't just win a bit more, they capture 76% of total market capitalisation in their category (Play Bigger, 2016). That's not a competitive advantage. That's structural dominance.
Geoffrey Moore's Gorilla Game framework describes exactly this dynamic: in any mature technology category, the Gorilla captures the majority of value, the Chimps survive in credible niches, and the Monkeys fight over what's left. The category decides which one you become — and it starts deciding much earlier than most founders realise. (Geoffrey Moore, The Gorilla Game, 1998)
The market will crown a leader regardless of whether you show up for it or not. The question is whether you're making decisions today that compound your position stage by stage — so that when the market starts to converge, you're not hoping to be chosen.
So the strategic question isn't "should we try to lead the category?" It's "are we building in a way that makes us the default — before the market decides for us?"
That's the difference between growth that stacks and growth that stalls.
Not hype. Not growth at any cost.
Compounding progress toward category leadership — the kind where when the market makes its decision, you're not scrambling to catch up.
You're already the default.
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#CategoryLeadership #DefaultChoice #PeanutEconomy
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