Product Building vs Product Distribution

When we first hear about some company's success, the immediate thinking is "They succeed because they build an awesome product". This is natural because the product is the first thing we see on company website with all its feature details.

As I have worked for multiple startups (both with failure and success), I figure out that there is more truth that an awesome product. It is true that we still need a great product for users to stick around but it is not the most important part.

The growth of open source projects and no-code tutorials make it easier to build a sexy product. In fact, 95% of all tech companies do not grow based on tech or their technology can be easily copied by others. Uber, Airbnb and Pinterest are not hard to make the first version (Google is a different category though).

The crucial part to make something successful is to figure out the product distribution strategy. The earlier you do this in your startup, the higher chance you can succeed.

One of the common mistakes that founders make (including me) is to spend way more time on product building than product distribution. It feels great to build something, especially if you are an engineer.

But no matter how cool your product is or how awesome the team you gather, investors are only concerned with growth traction which strongly ties to product distribution.

For example, you might hear about some AI tool that brings $X revenue for a company and you think you can do the same thing and achieve similar results. Little do you know that the founders have built relationships with their clients even before they start the company and hence easier to sell their product. You can build the same product but it takes much more time and effort to sell because you do not have the same network as your competitor does.

Dedicating time to think about product distribution is both a strategy and a habit. The distribution of a product is less mentioned on public media unless the founders share story about it.

What is Product Distribution

Product distribution process involves not only delivering your product to customers but also how you find a set of customers to deliver to. This process typically has 3 components:

  • Sale Channel
  • Delivery Channel
  • Service Channel

This article focuses on the Sale Channel for product distribution since it is the most important part of your startup's traction metrics. There are few strategies you can leverage.

1. Your existing network

If you are a Sass or B2B startup, this means tapping on your existing partners, former colleagues to get users for your product. When you work for a company, you not only build a set of skills but also a network that you can transcend to your next project.

Building a network of quality relationships is important as business runs on trust and relationship and not on resume. In addition, these people can be your product amplifier as they can introduce you to their existing network.

When a company signs a contract with a big firm, figure out what relationship they have and how they build. The only way to know this is to talk to people inside the company or who has gone through the process.

Using existing networks can be applied to consumer applications too. Products like Quora and Medium were invited base only the beginning. They could do that because the founders had a network of high profile influencers who could give them not only feedback but also the hype for public audience.

Recently, Clubhouse raised more than $10M series A funding with a valuation of $100M for a voice-based app that is not on the market yet. The hype of the app comes from influencers in the beta users list including Mark Cuban and entertainment celebrity like Kevin Hart. So, don't be fooled to think you can build a better app and easily raise the same amount of funding.

2. SEO - The "Get Rich Slowly" Scheme

SEO (Search Engine Optimization) is truly a "Get Rich Slowly" strategy for startup. Just like passive income to bring wealth while you are sleeping, this channel can bring you a ton of traffic without you doing anything for the product if you get it right.

In the past, Google's ranking was based on Page Link, and the more page linking to your site, the higher your site rank. This made many companies hire cheap labor on Upwork to post their sites everywhere on the Internet despite being irrelevant.

The paradigm has shipped and though Page Linking still has some weight today, the user's engagement matters much more. How does Google know if your site has good user's engagement?

They do evaluation based on how long a user stays on your site and how many pages a user views in one session. Google owns Chrome and many sites embed Google Analytics, so they have lots of insights on user's behavior.

How do we have high user's engagement? The only way to do it is to have high-quality content for a very targeted group of users.

And you have to provide high quality content consistently.

Consistency is the hard part here. Not just one or two good articles/videos but a chain of them over a long enough time. Eventually, if your content is good people cannot ignore you. They will share your content and in turn bring more traffic to your site.

I scroll through many popular Youtube channels or bloggers and see a pattern of consistently created content on these channels. It might take a few years to build your set of content but it eventually pays off. Don't break the chain!

This is not a guarantee for success but a common pattern I see among successfully-SEO-driven product.

High user engagement makes link spamming obsolete because it brings a very diluted set of users to your site. Since they are not interested in your topic, they would not engage with your content and this reduces your overall site ranking.

If you choose this approach, be patient. Give it at least 6 months to evaluate. Doing SEO is like going to the gym. You would not see the result in a day, two days or a week. But if you do consistently, you will see result.

Great content, like investment, has a compound effect. The more you add, the more accumulated value it brings.

3. Build a Community

Zeno Rocha tweeted to generate $20k of sales in two months. This might not sound a lot but consider that this is a consumer product and he has another full-time job, this is a significant achievement. What is the magic here?

There is no magic. He is the creator of Dracula theme for common hackers' tools. This is a very popular open source project among the programming community. What he did was to create a pro version of it and sold to the community.

Because Dracula theme already brought so much value for a programmer, they did not mind paying a few bucks to get the Pro version of it. Zeno's product was sold quickly because of the community he built before.

In fact, I think building community is one of the most important skills that any founder should have (besides building product and doing sale). You start the community by providing real value for users, a value that makes their life or productivity grow by 10x.

Human's relationship is reciprocal. When you help someone, they are naturally compelled to help you without your asking. This magic embeds in our culture's genes. You can sell your product with little effort later on. People don't like "to be sold" but they like paying for something that transform their life.

A few last words

There are many other sale channels you can use like using buying Ad, using publicity, engineering marketing, etc but these are the 3 common channels for providing increasing traction from my research.

Bear in mind that there is no absolute channel to grow for your product but you should try to focus on a few channels at any given time. Sale often grows in spurt and it often correlates with a newly discovered channel when others have saturated.

If you want to great more about product distribution and growth traction, I recommend the book "Traction: how any startup can achieve explosive customer growth" by Gabriel Weinberg (founder of Duckduckgo). I have the book review here. The book explores common tactics for growth that you can tap into.

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