Creating the VFI Category: How Validate is Redefining Professional Services Software

Sometimes the path to category creation starts with rejecting an idea entirely. In a recent episode of Category Visionaries, Validate founder Chris McCall shared how he initially dismissed their platform as just “the $2 million spreadsheet.” That skepticism, however, led to deeper questions that ultimately revealed a massive market opportunity and the foundation for a new software category.

Finding the Category-Defining Insight

The journey to category creation began with a fundamental realization about professional services. As Chris explains, “We’re doing the same thing that you do in any sort of financial statement audit or any sort of engagement where you have a professional involved in a complex financial matter… everyone has to base their opinion on evidence.”

This insight led to an even more powerful observation: “The entire accounting profession is based on this sample risk. If we can just go make a platform to collect and aggregate all the evidence, we can drive sample risk out of the accounting profession.” This wasn’t just a product feature – it was a category-defining shift in how professional services could operate.

Defining the VFI Category

Rather than positioning themselves within existing categories like OCR software, Validate chose to create something new. As Chris explains, “We believe it’s a category that’s going to evolve… The distinction of why we believe it’s a new category is this realization that as a professional, you have to base your opinions on evidence.”

The key differentiator? “Evidence has an extremely high bar from a data quality perspective… when we say verified financial intelligence, it’s all of the QA to know that the data that you’re looking at is supportable in a court of law and will withstand cross examination.”

Building Category Credibility

Creating a new category required a sophisticated approach to market education. Validate developed what Chris calls a “sage persona” – but with a crucial twist: “It’s not that we’re the sage. It’s that we talk to customers and listen to them, and that allows us to provide intel that a lot of people don’t get because we’re talking to so many different professionals across the United States.”

This approach shaped their entire marketing strategy. As Chris notes, “Positioning is really about evangelization in the category, because we’re talking about a new way of doing things.” Their focus became thought leadership and evangelizing a new way to run professional firms.

Expanding Category Reach

Instead of targeting specific verticals, Validate let market demand guide their category expansion. As Chris explains, “We didn’t target any specific segments out of the gate. What we really tried to do is just find professionals that deal in these complex financial matters… We didn’t care like what firm you worked for, how big it was, how small it was.”

This organic approach led to natural category expansion across accounting, government, and legal sectors. Each market validated the category in different ways – government work demanded “patience, and you got to make very large investments in compliance,” while legal markets presented various opportunities without a clear “rinse and repeat motion yet.”

Key Principles for Category Creation

Validate’s experience offers several crucial insights for founders looking to create new categories:

1. Look for fundamental shifts in how work could be done, not just incremental improvements
2. Build category definition around universal professional needs
3. Let market pull guide category expansion rather than forcing predetermined verticals
4. Focus on thought leadership that educates rather than sells
5. Maintain high standards that match the category’s promise

The Future of VFI

The ultimate validation of a new category comes from its potential to transform entire industries. As Chris explains, their vision is to “drive out sample risk and give these professionals way more transparency by providing all the evidence in these large, complex financial matters, ultimately that drives down the cost of capital and makes the whole financial system more efficient.”

This vision isn’t just about building a successful company – it’s about fundamentally changing how professional services operate. By focusing on evidence quality and comprehensive data analysis, Validate is creating a new standard for how professional opinions are formed and validated.

For founders considering category creation, Validate’s journey offers a valuable blueprint. Success doesn’t come from simply declaring a new category – it comes from identifying fundamental shifts in how work could be done, building solutions that enable those shifts, and patiently educating the market about the possibilities. The goal isn’t just to create a new market category, but to transform how entire industries operate.