Tell HN: I grew Usage AI from $0 to millions in ARR in < 1 year
Usage AI started out as a way for my friends and I to save on our AWS bills for weekend side projects - it was a solution to a problem we all had: expensive AWS bills. Since then, it’s grown to a company with over 150 clients, 16 employees, dozens of new features, and millions in ARR. We’ve grown to support 50+ of the top instance types with guaranteed buyback and the dashboard now features things like a savings tracker, IAM (multiple users with different permissions), multiple AWS accounts, a billing tracker, and the ability to consolidate all of your AWS RIs and SPs into a single dashboard. We’re adding new instance types with guaranteed buyback every month, to help companies save across the board, not only on their AWS bills and SaaS procurement, but across their entire tech stack.

The best part is that we only make money when we help people save; no hidden fees, no long contracts, and hopefully no large bills. Users pay a percentage of savings, billed monthly, and can stop using us whenever they would like. We became profitable 6 months after launch.

But, despite product market fit like I’d never seen (everyone likes to save, especially on their AWS bills), we didn’t take off immediately. Once I’d onboarded my friends from the hackathon circuit, I needed to find a way to bring Usage to a larger audience. I started out placing ads on Google, LinkedIn, and Reddit and was getting a lot of clicks. We were getting 5,000 site visits a month, but conversions were lower than expected. It wasn’t working like I’d hoped.

As a technical founder I had a problem: I knew that the tool I’d built would save companies around 60% on their AWS bills, I just didn’t know how to get in front of the right audience.

That’s when I made what was one of my best decisions: to hire my first salesperson. My advisors told me not to hire him, he was a 22 yr old recent grad working as a forklift driver with no sales experience, but I went ahead anyways. Both of us started cold calling and emailing prospects every morning. After two and a half weeks, we had our first client from cold outreach. We started A/B testing our messaging, trying different approaches and things started taking off. After about a month, we were bringing in around 2 new clients a week.

That’s when we stumbled into our second acquisition channel: partnerships. We were approached by a DevOps shop who had dozens of customers and wanted to white label our solution. I spent the next weeks working around the clock to build out a partner dashboard and API solution. When we integrated, we gained 15 new customers in a week with a total of $2m in AWS spend under management. Pretty soon, we were able to replicate this channel with other DevOps firms and AWS consultancies.

Both partnerships and sales took off and soon we were maxxed out making sure we could onboard customers without our tool breaking. That’s when we decided to double down on both channels. I hired several new sales and partnerships people. While there was a steep learning curve for them to master the AWS jargon and world of cloud compute our pipeline started to fill up. Today, we have over $12m of deals in pipeline and I’m excited to see where things go in 2023.

Looking back, there was no single thing but a lot of small things done right over a year that helped us get to where we are.

https://www.usage.ai/