StatusGator initially targeted developers but found success only after realizing IT directors were the true buyers. The mistake was focusing on users who loved the tool but lacked the authority and budget to purchase it for their company.
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Founders must consider their sales motion (e.g., PLG vs. enterprise sales-led) when designing the product. A product built for one motion won't sell effectively in another, potentially forcing a costly redesign. This concept extends "product-market fit" to "product-market-sales fit."
A major software vendor pitched a $50M deal directly to the DOE Chief of Staff, assuming top-level access was a shortcut. The pitch failed because they hadn't validated the need or built internal champions. High-level meetings are useless without foundational sales work proving a real problem exists for the organization.
Product managers often fail to get ideas funded because they speak about user needs and features, while executives focus on business growth and strategic bets. To succeed, PMs must translate user value into financial impact and business outcomes, effectively speaking the language of leadership.
The buying committee is larger than just the key contacts sales engages. Hidden influencers, particularly in procurement, play a crucial role. If they have no brand awareness or trust in your company when the deal reaches their desk for final approval, they can single-handedly block it.
A common PLG pitfall is assuming the user base will naturally springboard into enterprise deals. Often, the enterprise buyer is a different person with different problems. This oversight can cost companies years, as they have to build a second, separate sales motion from scratch.
Enterprise buyers purchase tools like Slack because employees love using them, not based on clear ROI. This presents a major adoption hurdle for non-viral, single-player products like enterprise search, which must find creative ways to generate widespread user adoption and love.
The founder of StatusGator calls inventing the 'status page aggregator' category a mistake. While it eventually provided a first-mover advantage, it meant years of slow growth because no one was searching for the solution, highlighting the difficulty of educating a market.
StatusGator became a marketplace by first building a valuable single-sided tool. Data from free users searching for outages (one side) became the valuable product—early warnings—sold to paying enterprise customers (the other side), validating the model before fully committing.
To create transformational enterprise solutions, focus on the core problems of the key buyers, not just the feature requests of technical users. For healthcare payers, this meant solving strategic issues like care management and risk management, which led to stickier, higher-value products than simply delivering another tool.
