Distribution

With a startup, people focus on Team Product Structure But ignore Distribution & Sales Reason: Myth: A good product sells itself Facts: Great products need effective To reach people channels Optimum 2. 99% Distribution startups fail Channels Where does your product/ service Distribution Sales Ideal situation Effective Driven Unicorn. No Absent/ Does not exist revenue Ineffective Types of products Easy to sell Hard to sell (e.g airplane) Customer acquisition costs (e.g soap) Low Hig Stuff like toilet paper Government determine your distribution contracts! Low Less people/ relationship intensive Highly people intensive But there is a huge problem: Customer acquisition High Clear approach: · Mass Marketing · Advertise No clear approach in this huge spectrum Clear approach · Hire sales people • Network & build What mix of advertising So what do you do? Understand: Sales is Engineering facts + something Facts Facts Something magical It either works or it Its not binary and requires a different doesn't Engineers have a bias towards binary and difficulty in understanding the Facts There are some people who have figured out the magic Outliers are in every field. For every "UberCoder", you have an uber-sales guy. Only problem: # of sales are quantifiable. Overcome Bias Social Lets figure out Viral PR & media media campaigns can be created are advertising sometimes distribution doesn't tough to crack later work Large bias So not a lot of time spent in figuring out targeted advertising. Difficult to predict what will go viral and what will not. Large bias to underestimate distribution. True. Getting trusted, accurate third party endorsement is the key. Find such outliers in the media Nail distribution early on. The product itself has to have ability of going viral. e.g Spotify, Use this to your advantage Investors and certain customers need it. You cannot escape it Remember, 1. The most effective distribution is hidden. It is the hidden part that needs thinking. 2. Distribution is uncertain. Understand, explore and counter that uncertainty.