Startups: Do NOT sell cloud. Sell Product.

Recently, a technology startup was pitching to a customer (happens to be a mid-sized healthcare company) and while the deal was going in the right direction, the startup in order to impress the CIO told him that ‘they are a cloud based company’.

iCloud : in simple English
iCloud : in simple English

The CIO later Googled around and found out the (security) issues with respect to ‘putting one’s data on the cloud’. The deal eventually fell through as the CIO demanded the startup to have a in-premise install!

What’s the issue here?

The cloud.

Startups look at cloud as a destination and not a delivery infrastructure. The pitch to CIO could have been around an Internet play,  a ‘website’ and not just the cloud infrastructure.

Imagine 1996. Imagine Hotmail.

Imagine Hotmail’s Sabeer Bhatia announcing this to the public:

“All your personal conversation now remains in the cloud. All your email contacts, your personal details are stored in our servers”.


Imagine Hotmail storing all your personal data/conversation in the cloud !!


How many of us would have used email then? Hotmail sold ‘communication benefit‘ to the masses and that’s what startups need to learn!

Cloud = Sexy? For Whom?

That’s the problem.

Startups in cloud space tend to use cloud as a marketing buzzword and while it purely works for investor pitch, it doesn’t really work for your customers.

Especially in India where CXOs are totally clueless about cloud and often base their decisions on market reports, which are mostly written by consultants to drive more F.U.D into the market.

In fact, we often get emails from investors asking them to ‘introduce to few cloud startups’ and here is how a typical conversation goes:


Investor: Hey! Please introduce me to few cloud based startups.

Me: Cloud? Which sector?

Investor? Sector ? That doesn’t matter. Startup should be in cloud space, man.


Sir, aren’t you going to invest in a sector eventually? I mean, a startup solving a pain point in healthcare/education/B2B etc sector? And the startup just happens to build a ‘cloud based’ service that needs no install/consulting/maintenance cost?

True that investors love these buzzwords, but customers are largely confused and startups should be really careful when they say ‘we are on cloud‘.

And for god sake, come down to earth, meet customers and sell the damn software (plus the pain-point it solves).

What are your thoughts?

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