“Just like a @#$ to bring a knife to a gun fight” — Sean Connery, The Untouchables
We are living in an age of excellence, where the science of product design is churning out wave after wave of exceptionally well-conceived delights for consumers. Product is so important, in fact, that distribution is often drowned out by the popping of champagne corks, as founders watch their babies hit number one on Product Hunt and Hacker News.
What a thrill it is to hit the top of the charts, a perfect peak, only to humble founders with the eventual and brutal pit of despair they will face in the coming days and weeks, as other products replace them at the top of the App Store.
Lasting distribution, created by growth-driven teams that have exceptional products, are the big winners today. Airbnb built a killer tool for Craigslist, Uber mastered the referral system and ‘over the shoulder virality’, while Wealthfront took the referral system and content marketing strategies deployed by others to the next level. WhatsApp crushed it using the “phonebook social network” combined with relentless localization.
I’ve been looking through the 400 applications, and still growing, that have come into this year’s LAUNCH Incubator class, and I’m stunned by how many have exceptionally well-created products — with no consideration for distribution.
Great moves all, but with no marketing budget, target audience, titles, or tag lines.
Standing out today with investors requires great products, but that’s table stakes. To really stand out from the pack, bring a killer distribution hack that you refined and can speak about first-hand.
For some startups, I’ve had 20-minute conversations not about their products, but about their clever use of street teams. With other startups I’ve invested in, the conversations are around a killer tool they’ve made that helps their customers for free … while building their database of emails.
Perhaps if the bubble bursts, and there are 80% fewer startups, we’ll go back to the days where a great product was enough to get investor and consumer attention — but I doubt it.
Feels like the stakes are constantly raising in this game, where showing up without an MVP in 2016 makes you look foolish, and my guess is that in 2017, showing up without a unfair competitive distribution strategy will look like showing up to a gunfight with a knife.
One competitive advantage I heard with a startup that I invested in recently, was their approach to infiltrating college markets by having “power hours.” They basically invite folks for donuts or burritos and have a party that is co-ran by influential groups on campus; those folks who use the app invite their friends to the party, and the cost of the food is much less, and the users much higher quality, than paying for App installs on Facebook. Will it work long term? Will it scale? Who knows, but it shows me they are thinking about how to do something other folks are not doing — and are fearless.
Another company I recently invested in, without saying their name or revealing too much, was going to industry events for their vertical and signing up folks for trials and having product review sessions. That’s not super unique, but they had really connected that piece of the prospecting to their SDRs (sales development reps), trials, and eventually, subscriptions. They could have showed me more product features, but they focused me in on their sales process, and I’m a sucker for that because “sales solves everything.”
The point here is that coming to your investor meetings with a distribution story dialed in will set you apart from your competition — it will also help you grow your business and perhaps not need to meet with investors in the first place. 🙂