Context Dependent Painkiller

Recently talked to a founder that was struggling with sales for an AWS cost optimization service. They were having a hard time closing deals.

At face value, it seems strange that this would be a hard sell - AWS costs are generally the number one IT cost of any tech company after headcount. But dig deeper and it makes sense - for most companies most of the time, costs are not going to be their "painkiller" problem (vs growing the business and acquiring more customers).

Cost saving products live in the universe of "context dependent" painkillers. That is to say - there is no problem until very specific milestones are passed at which point the problem that was not a problem suddenly becomes a painkiller.

Examples include: - reducing AWS costs after your startup credits run out - getting SOC2 after it becomes a sales blocker - optimizing datadog ahead of the next contract negotiation because it has become your biggest IT expense

There is a very narrow time window when these context dependent painkillers remain open problems. It is the challenge for all companies that provide context dependent painkillers to close prospects during this time window.

You can do this by either: a) being top of mind in the category so that people know to look for you when the problem comes up (aka inbound) b) reaching out to people directly when their context changes (aka outbound)

Examples of being top of mind: Corey Quinn for AWS cost optimization (via newsletter, snark, twitter) and Brex for startup banking (via bill boards, ads, and consistent messaging). Examples of reaching out on context change: Every recruiting agency that floods your inbox the moment you make a post about hiring.

For reaching out, most cases aren't as straightforward as recruiting. Most of the time, the data you need for the context change isn't publicly available. For example, at Nimbus, we target Datadog companies after a certain $$$ spend that have not yet invested in cost optimization. There is no public source of data for this, so we go by various proxy signals like headcount and revenue.

If you're a startup founder struggling to close sales, consider if the problem you're solving might be context dependent. If so, make sure you understand the criteria for when the context switch happens and how to best reach your audience at that time.


Created 2024-03-29T16:59:24.471000, updated 2024-03-29T17:04:33.814000 · History · Edit