One of the biggest challenges when collecting data for Stats For Sharks has actually not been, you know, collecting the data but actually trying to categorize the various companies.
Consider: in order to make categories mean anything, they have to be both broad enough to encompass multiple companies that might share the same challenges even when selling superficially different products but must also be specific enough so that a garbage collection company and a long haul trucking company aren’t grouped together just because they may both use trucks.
Currently, we have thirteen different primary categories being used on Stats For Sharks and that’s actually down by two since just last night. Some are easy to differentiate but some are harder. The difference between an apparel maker and a service is a pretty easy call. But what about Himalayan Dog Chew, a company that makes dog treats out of dried yak’s milk (seriously!)? Is that food? Is that pet?
Also, what about CuddleTunes, a company that makes a stuffed animal that can be linked to the internet and download custom recorded sounds the kid can play by squeezing the toy’s foot? Toy? Kid? Tech? Home? (We decided Toy.)
While we have a hard and fast rule of not reading in other applications to entrepreneurs businesses and instead take them at their word for what their markets may be, we do categorize them based upon what makes sense to us as a segment rather than what they claim. Coffee Meets Bagel might claim to be a technology company but they’re really just a dating service. That it’s done over the web rather than via telephone or newspaper ads doesn’t change what’s actually on offer. So it’s categorized as a service, same as most retail businesses because their challenges are the same: customer acquisition and retention, not to mention satisfaction. (We’re also really stingy with the Technology category.)
We also have Home, Toy, Recreation, and Utility categories, all four of which could probably have some significant overlap. But we use Home for products that will primarily be used in the home for things like kitchen devices, bedding, decoration, and the like. Toys aren’t just for kids and can include things like drones, squirt guns, office toys, whathaveyou. Recreation is for products used by a niche of people who participate within a recreation segment, things like baby carriages for running, hobby beehives, or fishing lures. And Utility is generally for companies that make something that does something. Window screen patch kits might be used at home but they can be used by businesses also. Folding weight racks might be installed in the garage by a consumer but might also be installed in gyms as well.
The line can be, admittedly, arbitrary but we have draw them somewhere and this is how we’ve chosen to do it.
Now, I mentioned that we reduced our number of categories by two but, really, we just bumped those two down to second level categories because we thought it was more appropriate. And these two categories were Kids and Pets.
We were having trouble deciding whether something was a Toy or Kids. A Service or Kids. Food or Pets. What made the most sense was to use the top level category summarize the type of business they were in and the second level to represent the market. And, for us, this cleared up a lot of confusion.
Someone who makes baby clothes encounters the same challenges as someone who makes surf wear, inventory management, supply chain issues, etc. They’re just selling to different markets. So the baby clothes receives a secondary category as Kids.
Not every company will receive a secondary category, these are really reserved for companies that offer products for specific market segments versus applications that may be more general.
The consideration of categories will probably continue right up until the day we launch the site which is a major reason why I haven’t created a chart on the temporary homepage to represent these. But it will be interesting to see who invests in what and in what amounts once we’ve nailed down the data.