Why Category Creation Must Move Upstream to Ontology in the Age of AI

You feel it, don't you?

That subtle, gnawing sense that "Marketing" isn't working the way it used to.

You write the perfect LinkedIn hook. You design the perfect category. You scream "Different, Not Better!" from the rooftops. You follow the Christopher Lochhead playbook to the letter - damming the demand, creating the villain, evangelizing the problem.

And yet... the market stares back at you, bored. The leads are thin. The "Movement" feels like a slack channel with three people in it.

Why?

Is your story bad? No. Is your product weak? No. It’s because you are fighting a war with a map from 2015.

We are living through a quiet, violent shift in how value is perceived. We have moved from the Era of Narrative (where humans buy stories) to the Era of Ontology (where systems buy truth).

If you are still trying to "Position" your way to a billion dollars, you are building a castle on sand. The new winners aren't the best storytellers. They are the ones who understand the single most important force in business today:

Ontological Inversion.

Part I: The Glitch in the Matrix

Every market, movement, or system begins with a narrative. A simple, comforting story about what we are doing.

• “This tool will help you sell.”

• “This platform is for connecting friends.”

• “This government is for the people.”

Narratives are clean. They fit on a pitch deck slide. They make investors nod.

But then, Reality happens.

Over time, behavior accumulates. Incentives solidify. Structures evolve. Users stop doing what you told them to do and start doing what the system allows them to do. Slowly, silently, the behavior of the system drifts away from its origin story.

And then, it snaps.

Ontological Inversion is the moment when a system’s identity flips. It is the moment when the behavior becomes stronger than the story. The narrative says "X," but the Ontology (the reality of what the thing is) screams "Y."

Most founders spend their lives fighting this. They try to force the users back into the narrative box. "No, no! We aren't a service company! We are a platform!"

The winners? The winners do the opposite. They let the inversion happen.

But before we talk about how to win, we need to talk about why the old playbook died.

Part II: The New Judge (Why "Dam the Demand" is Dead)

For decades, the Category Design gospel was simple: Dam the Demand. Shock the market. Provoke a reaction. Force the human brain to re-categorize its world to make room for you.

This worked because the "Judge" was a Human. Humans are emotional and easily persuaded by a good hero's journey. If you told a good enough story, a human would buy a pet rock.

But in 2026, the Human is no longer the primary interpreter of your narrative. The Algorithm is.

Whether it’s the LLM summarizing your tool for a CEO, the Google algorithm ranking your relevance, or the VC’s AI agent scanning your deal room - your "Story" is now being read by a machine.

And here is the brutal truth about machines: They don't care about your drama.

LLMs function on Ontology, not Psychology. They operate in "Embedding Spaces"- massive, multi-dimensional maps of semantic meaning.

• If you tell a human: "We are the Revenue Acceleration Movement!" - The human gets excited.

• If you tell an LLM: "We are the Revenue Acceleration Movement!" - The LLM analyzes your API docs, your feature set, and your customer reviews. It calculates the vectors.  The AI recurses and it concludes: "No. I have analyzed your feature set. Your vector proximity is 99% identical to Salesforce. Ontologically, you are a CRM wrapper with a dashboard. I am classifying you as 'Software > Sales Tools > Legacy'."

Do you see the problem? You can't "Spin" a vector. You can't gaslight an embedding.

This is the Trap. You can't gaslight a neural network. You can't "Position" a vector.

In the old world, you could design the category from the Top Down (Language first, Reality second). In the new world, you must design the ontology from the Bottom Up (Reality first, Language second).

If you try to paste a "Category King" sticker on a "Legacy" ontology, the AI will peel it off in 0.03 seconds. It will collapse you into the generic cluster. It will tell your prospects: "This is a standard tool, similar to 50 others."

And just like that, your "Category" is dead. Not because your story wasn't loud enough, but because your Reality didn't agree with your Language.

If your Ontology (what you actually are) conflicts with your Narrative (what you say you are), the AI will punish you. It will collapse you into the "Spam" cluster. It will hide you from the search results. It will tell the buyer you are "just another tool."

In the Age of AI, Demand forms through Semantic Coherence. You don't win by shouting louder. You win by being Ontologically Unmistakable.

Part III: A History Lesson (The Ghosts of Inversions Past)

You might think this is just tech-bro philosophy. It’s not. Ontological Inversion is the hidden engine of history. Every time a major system collapsed or conquered the world, it was because of an inversion.

Let’s look at the receipts.

1. The Roman Republic → The Roman Empire

• The Narrative: "We are a Republic. We are governed by the Senate and the People of Rome (SPQR)."

• The Ontology: By the time of Augustus, Rome was a military autocracy run by a single Warlord.

• The Inversion: The labels didn't change. They still met in the Senate. They still voted. But the structure had flipped. The story was "Freedom," but the ontology was "Empire." Rome lasted 400 more years because it accepted the inversion.

2. The University

• The Narrative: "A monastic center for the contemplation of truth."

• The Ontology: A massive real estate hedge fund attached to a credentialing factory and a grant-writing bureaucracy.

• The Glitch: We feel the pain of this inversion every time we pay $50k tuition for Zoom classes. The story says "Learning," the reality says "Transaction."

3. Money

• The Narrative: "A store of value backed by gold."

• The Ontology: A symbolic abstraction backed by the threat of violence (taxes) and collective belief.

• The Shift: When Nixon closed the gold window in 1971, he formalized the inversion. Money stopped being a "Thing" and became a "Scoreboard."

History teaches us one thing: The Label always loses to the Structure. You can call a wolf a "Sheep," but eventually, it’s going to eat the flock.

Part IV: The Friction (How Inversion Happens in Business)

So, how does this happen to your company? It doesn’t happen overnight. It happens through Friction.

Let’s look at Slack.

• The Narrative: Stewart Butterfield pitched it as a "Killer of Email." A fun, chatty app to make work less boring.

• The Behavior: Teams started using it for everything. Alerts. DevOps logs. HR announcements. File storage.

• The Inversion: It stopped being a "Chat App." It became the Central Nervous System of the Enterprise.

• The Pain: Users started complaining. "It's too noisy!" "I can't focus!" That pain wasn't a product failure. It was the sound of the Ontology breaking the Narrative. Slack wasn't a toy anymore; it was an Operating System. Once they embraced that (and built the platform), they won.

Look at Salesforce.

• The Narrative: "No Software." Just a simple CRM in the cloud.

• The Ontology: A monstrous, sprawling database that holds the entire legal and financial truth of a corporation.

• The Inversion: Nobody loves Salesforce. But nobody can leave it. Why? Because Ontologically, it isn't software. It is the Digital Landlord of your customer data.

The lesson? Users don't adopt your Story. They adopt your Ontology. If you build a hammer, they will hit nails with it, even if you marketed it as a "Manual Kinetic Force Applicator."

Part V: The Solution (Name It or Die)

We are entering the Great Filter. The companies that cling to their old narratives will die. The ones that embrace their Ontological Reality will own the next decade.

How do you survive the Inversion?

1. Audit Your Ontology (The "Mirror" Test) Stop looking at your brand guidelines. Look at your API. Ask ChatGPT and other LLMs: "Based on my website and documentation, what is the strict ontological definition of my company? How would you cluster me?" If the answer makes you wince, you have an inversion problem.

2. Watch the "Wrong" Users Your best customers are the ones using your product "wrong."

• Are they using your project management tool as a CRM?

• Are they using your marketing newsletter as a community forum?

• Are they using your eCommerce site as a research engine? That is not user error. That is the Truth trying to tell you what you are.

3. Name the Inversion This is the scariest step. You have to kill your darling. You have to admit that the story you raised money on is dead.

• Amazon admitted they weren't a Bookstore; they were Infrastructure.

• Netflix admitted they weren't a Mail Service; they were a TV Network.

• You have to stand up and say: "We are not X. We have become Y."

4. Design for Logic, Not Hype In the AI era, clarity is the ultimate currency. Don't use vague metaphors. Use precise, structural definitions. Build a "Semantic Signature" that is so clear, so dense, and so logical that when an AI encounters your brand, it has no choice but to categorize you exactly where you want to be.

Part VI: The Conclusion

The category 1.0 era of creating categories out of thin air is over. You can't just hallucinate a movement into existence anymore. The world is too noisy, and the algorithms are too logical.

The Category Design of the future is not about "Positioning." It is about "Definition."

It is about building a system so ontologically sound, so structurally inevitable, that the narrative is just an afterthought.

A system does not flip when it changes. It flips when the story can no longer contain what it has already become.

Most founders will resist the flip. They hire more marketers to shout the old story louder. The wise founder? They smile. They look at the chaos. And they name it.

Ontological Inversion is not failure. It is Evolution without permission.