Delphic Costs and Why They Matter

Derek Legenzoff

Products like ChatGPT and Perplexity have gained huge popularity and adoption over the past couple of years. But what specifically makes these tools so useful? A recent Google paper introduced the concept of "Delphic Costs" which offers a compelling explanation on why these products are so helpful.

Delphic costs are rooted in the historical context of the Oracle of Delphi. People from across the Greek world traveled to Delphi to consult the Oracle, seeking divine guidance on important matters. Historical figures like Alexander the Great, Nero, and Hadrian sought the Oracle's advice on issues of war, colonization, and lawmaking, granting it considerable political power. Though the Oracle's prophecies were often vague, their potential to influence political and social directions was significant.

When individuals sought guidance from the Oracle, they typically brought a gift or made a sacrifice. The value of these offerings was supposed to reflect the importance of the advice sought. These gifts and sacrifices form the basis of Delphic Costs. While modern technology has eliminated the need to visit the Oracle of Delphi, Delphic Costs remain prevalent today. For any product, both customers and the product team incur Delphic Costs across the entire lifecycle of product adoption, from initial consideration and onboarding to ongoing usage and support.

What it Costs

Delphic Costs refer to the non-monetary costs associated with obtaining information and making decisions. These costs include:

Time Costs: The time and effort required to gather information from various sources.
Cognitive Costs: The mental energy needed to understand, interpret, and use information effectively.
Interactivity Costs: The actions involved in navigating through information channels, such as formulating queries and clicking through search results.

These costs become apparent when you consider the typical journey to find information. You go to Google, type a query, sift through results, reformulate queries, click multiple links, skim pages, and then synthesize the information. We're all used to doing this and it's quite routine, but when you think about it, it's a lot of work.

In contrast, solutions like ChatGPT, Claude, or Perplexity significantly lower the delphic cost by providing answers in a conversational manner, mimicking human interaction. These solutions can lower the delphic cost for finding information, brainstorming, or completing various other tasks.

Costs Inhibiting Product Led Growth

Product-led growth refers to a business strategy where the product itself is the primary driver of customer acquisition, retention, and growth. The key difference with PLG businesses is that users sign up and onboard on their own, typically on a trial or low-cost plan as opposed to being hand-held through a high touch 'contact us' sales motion.

With product-led growth, you lean heavily on having an intuitive product, great documentation, and seamless self-serve experiences. This approach reduces the need for a large sales or customer success team to guide each user. Unlike high-touch sales and onboarding, which can gloss over rough spots in the product, poor documentation, and other sharp edges, product-led growth relies on users being able to derive value quickly and independently. When done well, this leads to bottom-up sales led by practitioners, rather than long sales cycles driven by managers and executives.

If you think in terms of the user journey each potential customer goes through to adopt your product, they'll run into several areas with high delphic costs along the way. At a minimum, they'll need to:

Understand what the product does and if it will be useful to them
Jump in and start using your product
Troubleshoot technical issues or obstacles that may arise during usage

If the cost of any of these activities is too high, it's likely a customer will churn and start looking for alternatives.

Lowering Delphic Costs with Cortex Click

To minimize the delphic costs placed upon your users, you need to ensure you have at least these two key things:

You have great content making it easy to understand and use your product
Your customers have a way to solve and troubleshoot issues and get their questions answered

Keep in mind that creating content and answering user questions also takes a huge toll on your team. We're designing Cortex Click to make both of those things easier. Right now, we're focussing on two key areas:

A long-form content editor that makes it easy to generate high quality content grounded on your data.
Embedded copilots that assist users in real-time, offering suggestions and support as they navigate your product.

AI-Powered Content Editor

Cortex Click offers a long-form content editor, allowing marketing, engineering, and sales teams to quickly create high-quality documentation, blogs, and tutorials. By leveraging your existing knowledge base, Cortex Click automates content gathering and initial drafting, dramatically reducing the time and cognitive load required to generate new content. From there, you can leverage integrated AI tools to quickly ideate and improve on the content.

Long-form Content

Embedded Copilots for Answering User Questions

Cortex Click also supports embedded copilots within products or websites, enabling users to access instant, contextually relevant answers. The copilots can access and link to docs and other content to yield correct answers with citations to your docs. You can also make these copilots available to internal teams to streamline answering customer questions.

Below you can see an example from Allium who uses Cortex Click to help their users quickly generate SQL queries for retrieving blockchain data.

Embedded Copilot

Food for thought: If an AI tool versed in all your content can't answer a question about your product, chances are your users can't find the answers either. Just as valuable as answering questions, these tools also bubble up the questions that are going unanswered and highlight areas where you need to invest in improved documentation.

Drive Growth by Cutting Costs

While the Oracle of Delphi might seem a relic of the past, the concept of Delphic Costs remains relevant today. Understanding and mitigating these costs can help you successfully scale your business while keeping your customers happy. Cortex Click leverages advanced AI to streamline both content generation and building embedded copilots to provide users with instant, accurate information.