The Education Tax: How Viable Approaches Category Creation in Enterprise AI

Every category creator pays a hidden tax: the cost of teaching the market why they should care. In a recent episode of Category Visionaries, Daniel Erickson revealed how Viable transformed this necessary evil into a strategic advantage in building their enterprise AI platform.

The Category Creation Paradox

“When you’re creating something new and you’re on sort of the forefront of what’s possible, you don’t have all of that sort of framework built out for you within your target customers,” Daniel explains. This education burden extends beyond simple product understanding – it requires teaching customers to think differently about their problems.

For Viable, this meant helping enterprises recognize that “80% of data that is collected by companies today is unstructured text.” The challenge wasn’t just selling a solution; it was getting companies to recognize the full scope of their customer feedback problem.

Building the Education Engine

Rather than viewing customer education as overhead, Viable built it directly into their go-to-market strategy through three distinct channels:

1. Initial enterprise deals through their investor network, which Daniel considers “probably the best way to sort of get your flywheel going”
2. Targeted outreach that focused on understanding “who is the actual buyer here, who are the users, what’s our best way in”
3. Content marketing at scale, achieving “about 50% month over month increase in website traffic just from our content initiatives”

Each channel served not just as a sales pipeline, but as a market education platform, helping potential customers understand the possibility of automated feedback analysis.

The Investor Alignment Challenge

Category creation requires patient capital, and Viable found that investor selection was crucial. As Daniel notes, “There are certain investors out there that are looking for category creators because category creators tend to be, if not winner take all, winner take most for these things.”

This understanding shaped their fundraising strategy. They sought investors who understood that category creators face different metrics and timelines than companies entering established markets. Craft Ventures, led by David Sacks, exemplified this approach – Daniel notes that “David is all about category creation.”

Managing Extended Sales Cycles

The education tax manifests most directly in longer sales cycles. Without established budget categories or purchasing frameworks, potential customers need time to understand and validate the new approach. Viable addressed this through a systematic approach to proof points:

1. They focused on showing how successful companies were already spending significant resources on manual analysis. For instance, they found that Superhuman “were spending about 12 hours a week just analyzing that data.”
2. They identified the hidden costs in current approaches, where product teams had to “go to each one of these and they go talk to people about this and inevitably what happens is these people are like, it’s not their job to distill all of this stuff down.”

The Education Advantage

While the education tax seems like a burden, it actually created strategic advantages for Viable:

1. Market Definition: By educating the market, they got to define the category on their terms
2. Technical Credibility: The education process demonstrated their deep understanding of AI capabilities
3. Strategic Relationships: Extended sales cycles, while costly, built stronger customer relationships

Beyond Basic Analysis

Viable’s category creation extends beyond current capabilities. As Daniel explains, they’re moving toward “generative analysis,” focused on “tying company goals back to customer feedback and helping you use customer feedback to achieve those company goals.”

This forward-looking vision helps justify the education investment – they’re not just selling current capabilities, but building understanding of where the category is heading.

Lessons for Category Creators

For founders considering category creation, Viable’s experience offers several key insights:

1. Build education into your go-to-market strategy from the start
2. Seek investors who understand category creation dynamics
3. Use extended sales cycles to build deeper customer relationships
4. Focus on identifying and quantifying hidden costs in current approaches
5. Maintain a forward-looking vision that justifies the education investment

The real insight? The education tax isn’t just a cost – it’s an investment in building a market you can own. By embracing the role of market educator, category creators can transform a necessary expense into a strategic advantage.