Category Killer or Category Builder?
Fred Smith of Fed Ex, who died recently, was a Category Builder. There aren't many. But there's one more out there and he dominates American political life.
Fred Smith died this summer and he’s not getting enough credit.
The founder of Federal Express, now FedEx, did something nearly impossible: he dreamt up a Category Builder. Unlike Smith, most billionaires attain their status by merely being Category Killers, which is easier.
The difference? Category Killers improve an existing product and cannibalize market share of the product category. Miller Brewing most famously did this with Lite Beer, introduced in 1975 in the Baby Boom’s health craze. Marketed by female supermodels and male athletes, Lite Beer became America’s second-favorite swill under the comparative slogan “Less Filling/Tastes Great.”
Lite’s market gobbling merely eroded other beers, including Miller’s own full-calorie product, High Life. Seven years later, Miller’s rival, Anheuser-Busch, introduced a copycat, Bud Light in 1978, and converted more existing beer drinkers, including Lite’s. The beer category overall remained roughly the same size.
Coca-Cola followed the same path with Diet Coke, swapping sales of its own existing diet product, Tab, and some belonging to its sugary flagship drink.
Category Killers merely re-orient customers already buying a similar product. But Category Builders create something entirely new, attracting new customers to the category. That’s what Federal Express did with its introduction of guaranteed overnight letter and package delivery in 1973.
Smith’s Wall Street Journal obituary notes Smith started with 186 packages his first night, shipped to 25 cities, and grew the load to 16.5 million air bills per day in 2023. Fed Ex’s early slogan was “when it absolutely, positively has to be there overnight.” But in the early 1970s, almost nothing was viewed that way. Business correspondence went in an envelope with an 8-penny stamp affixed, dropped in a mailbox with an uncertain wait for delivery, no matter how urgent.
FedEx perfected the national overnight letter, at a cost of $9.50, roughly 100 times what it cost to use the mail. Businesses did not abandon mail but began conducting overnight commerce that was impossible before Smith’s new category. Package shippers like UPS, and eventually the USPS itself, imitated FedEx. Smith, in turn, copied their package business by acquiring long haul truck-based shipping companies to diversify his air and van fleet and add volume.
What other Category Builders have we experienced besides FedEx? Steve Jobs built Apple into the world’s biggest company with some of its most defiantly solo products. But the iPhone is just an iteration of the Blackberry – and in some ways, it’s worse.
Amazon began as an online bookstore, devastating the category’s big players before squaring up to compete with the delivery-based shopping grocery chains had already launched. Today, it rivals Wal-Mart, Target and Kroger – and copycats them too, hence the launch of Amazon Fresh physical storefronts.
Elon Musk’s Tesla brand is innovative, but it only made electric vehicles cool; it didn’t make them electric. His SpaceX company would get my vote as a Category Builder, but having only a few customers makes it less the part.
There is one Category Builder shining in our American life, however, and it’s Donald Trump.
When Salena Zito and I wrote The Great Revolt after Trump’s first victory, we wrestled with whether history would view Trump as a Category Killer who merely reshaped the Republican lane or an innovator who built a wholly new coalition.
The hostile nature of Trump’s take-over of the GOP was not then debatable. The party’s Chamber of Commerce wing, including Fred Smith, tried to wire things for Jeb Bush in 2016 and its Christian Coalition wing gravitated to Ted Cruz, but Trump steam-rolled both. Shared aversion to Hillary Clinton enabled Trump to drag both sets of Republicans behind him, reluctantly, to win narrowly that year.
The cadre of Trump detractors inside the GOP has melted slowly over his decade of dominating American discourse, and Zito and I flagged proof points from the start that his coalition is not merely a capture of the GOP category.
We noted in The Great Revolt the large number of Democrats who changed their registration in the 2016 Pennsylvania primary to help Trump swipe that state’s delegates from Cruz. More came in droves that November as Trump converted a decisive bloc of Obama voters in the key Midwestern states. Those Trump-only devotees delivered Pennsylvania as the tipping point state in 2024’s election.
But what else proves he’s a Category Builder like Fred Smith and FedEx?
The Trump coalition’s trend lines have endured and broadened. His refusal to accept Republican baggage on issues like the minimum wage, trade unionism, Social Security, and globalism make him something other than a conservative – a label he never uses for himself, unlike two generations of prior Republican nominees. His economic policy has had the de-regulation and tax cut religion of the old GOP but seems personally more energized by the tariffs and industrial policy, including strategies like a “golden share” for the government in US Steel and a direct investment by the Pentagon in a rare earth metals company, that would be anathema to Reagan or Goldwater. His reshaping of American foreign policy into a nationalism-first, muscularity-second, nation building-never approach has made enemies and allies alike recalculate.
Writing in The Spectator, Travis Aaroe recently called Trump “America’s first third party president” because he fully conquered the Old GOP and replaced it.
“There is almost no intellectual continuity between the faction he now leads and the pre-2015 Republicans beyond a generic commitment to free markets and to law and order…MAGA is not simply a case of the GOP embracing populism, because the GOP had its own populist tradition: the Tea Party…The Tea Party used to give the GOP Establishment headaches but there was a recognizable line of descent from Goldwater, Reagan, and William F. Buckley. Trump was the first modern party leader for whom this pantheon meant nothing.”
And the new thing worked. Trump’s 2024 bloc was blacker, browner, younger, and less rich than any Republican’s coalition in this era, built on working class values that cut cross demographic lines.
Many of these voters are attracted to Trump because he is different from Republicans who came before him, and different in the same ways that vex the Romney-Bush-McCain-loving donor class of the historic GOP.
Politically, Fred Smith was a card-carrying member of that cohort. A look through Smith’s campaign donation records shows a list of virtually every prominent national Republican of the last 20 years, hundreds of them, from John Boehner to Ron Johnson. Every national Republican, that is, except for one: Donald J. Trump.
