The Category Creation Go/No-Go Test
Four checks — budget, buyer language, competition, and vision scope — decide whether to invent a category or win an existing one
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 94%
Before spending years and millions inventing a category, Barbra Gago runs four diagnostic checks: does the buyer already have a budget line for something, what words do they actually use for their pain, is there competition, and is the existing category big enough for the vision. Counterintuitively, competition is a reason TO create a category, not a reason against it — a category doesn't legally exist until several companies claim it. If buyers keep calling you the old thing no matter what you say, you're in the old category and should elevate it instead.
Origin
Developed by Barbra Gago across three go-to-market builds: a failed category attempt at Greenhouse (tried 'recruiting optimization platform', buyers kept saying ATS), a successful one at Miro ('visual collaboration' replacing 'online whiteboard'), and Culture Amp ('people analytics' → 'people experience').
Core principles
- 01Budget is the hardest constraint — if buyers have a line item for the old category and none for yours, you must sell into theirs while educating toward yours.
- 02The customer's vocabulary beats your vocabulary. If they still call it an ATS after all your PR, it's an ATS.
- 03Competition validates a category rather than threatening it — one company claiming a category is a marketing slogan; five is a category.
- 04Category creation is a scope decision: it exists to escape a ceiling, not to escape competitors.
- 05Abandoning a category attempt is a legitimate, cheap outcome — trying early and failing fast beats committing late.
How to run it
- 1
Map the existing categories you already fit
Go to G2, Software Advice, or other directory/review sites and see how they group products by feature set. Identify every category your product currently maps to, from narrow best-in-class to broad all-in-one.
Pro tip Directory taxonomies are the closest public proxy for how buyers and analysts already carve up your market.
- 2
Check for existing budget
Ask whether companies already allocate money to the category you would fit into. Budget exists for ATS and Performance Management; it did not exist for 'visual collaboration'. No budget means you must fund buyer education to create the line item itself.
Watch out No budget is not automatically disqualifying, but it converts a marketing project into a market-education project with a much longer payback.
- 3
Listen for the buyer's own words
Run a large volume of customer conversations and record the literal language they use for the pain, the workaround, and your product. If they consistently reach for the incumbent category name, that is the answer.
Pro tip Do this before naming anything — the language you hear is the raw material for both positioning and the category name.
- 4
Test the ceiling of the existing category
Ask whether the category you currently occupy can hold the company you want to build. 'Online whiteboard' was too small for Miro's platform ambition; 'visual collaboration' had room for HR, marketing, design, and engineering use cases.
Watch out Do not create a category just to be number one in something. Create it only when the existing container caps the vision.
- 5
Decide: create, elevate, or dual-track
If the existing category is big enough and buyer language is locked, stay and elevate the category's perceived value instead. If the category caps you and buyers describe you in scattered incoherent ways, create. If both are partly true, run the dual-track long-tail approach.
Pro tip Elevating a category you already own can produce most of the upside at a fraction of the cost — Greenhouse spent its category budget on making ATS strategic instead of renaming it.
Watch out If you are already well established and scaled, category creation is rarely a meaningful new-business lever.
In the wild
The ATS category carried heavy disdain from earlier transactional systems, so Gago tried to reposition Greenhouse as a 'recruiting optimization platform', pushing content and press around the new label. Buyers who fully understood and valued the differentiation still called it an ATS, and the budget line they were spending from was still ATS.
→ The category attempt was abandoned. Greenhouse redirected the same time and money into elevating the ATS category itself — making structured recruiting strategic — which, alongside Culture Amp's work, helped set off a broader wave of strong people practices.
Miro sat inside 'online whiteboard' — a real but small category few people searched for, and one that framed the product as a niche tool for product and engineering teams. Users described it inconsistently as mind mapping, diagramming, or whiteboarding, depending on their job to be done.
→ Gago packaged the scattered use cases into 'visual collaboration', a container broad enough for enterprise-wide adoption across HR, marketing, and design. Other companies began classifying themselves in it, which validated the category.
Common mistakes
Creating a category to avoid competitors
Founders often reason that a new category means no competition. In fact a category only becomes real once several companies claim it — competitors arriving is the validation signal, not the failure signal.
Fighting the buyer's vocabulary
Going against the grain when customers keep using the incumbent name burns money on content and PR that never moves the budget line. The word customers use for their pain is not negotiable by press release.
Attempting category creation once already scaled
Once a company is well established in a category, inventing a new one rarely generates new business. The window is early — the sooner you try, fail, and iterate, the cheaper it is.
Is it for you?
Best for
Early to mid-stage B2B SaaS founders and CMOs deciding whether their product should claim a new category or compete inside an existing one
Not ideal for
Established companies already squarely inside a well-understood category with a healthy budget line, where category creation is expensive and unfruitful
From the transcript
“the main factors when you're thinking about category creation is really what budget companies have if they have a budget if they don't have a…”
“you're not building a category until there is competition like it's not officially actually a category until there's more companies that do that”
“so it didn't really make sense to continue to go against the grain of no we're gonna be this new thing or we're going to…”
From the episode
Category creation and brand building
Barbra Gago (Pando, Miro, Greenhouse, Culture Amp)