Idea or Execution? Nope - It's Distribution!

Is it the idea or the execution? I’m sure you have heard that debate a few times.

There are great arguments on both sides. We can agree that both are important.

However, there is something else that is even more important: distribution

How are you going to sell this thing? Who are we going to sell it to?

Those answers shape everything.

They Won’t Come

Most startup ideas start with the idea. First-time founders build the product, and in their heads, they think, “If we build it, they will come.”

It's more likely you will be lost in the cornfield alone!

Virtually every startup founder you talk to is likely to tell you that flat-out doesn’t work. We all tried it and failed, but a few got lucky.

The hidden risk is that if you don’t know who you are selling to or how you are selling it to them, you may not even know what to build… exactly.

For example, my old company, Stackify, sold application performance monitoring software for software developers to use. 

If we had targeted small companies rather than large companies or pivoted to sell the product more to system administrators, the product feature set would have needed to change, as would our pricing and the type of salespeople we hired. 

Selling to SMB vs enterprise or focusing on product-led growth are all very different business models.

The point is that until you know exactly who you want to sell to, your product and business model are subject to change.

Distribution and your go-to-market strategy heavily influence everything. 

The Distribution Pivot

Let’s use Bo Lais’ company Lula as an example. (Previous podcast guest!)

He started by helping consumers find reputable service providers to fix things around their homes. They found that difficult and competed with companies like HomeAdvisor, Angi, etc.

They noticed that the traction they were getting was largely from companies that owned multiple rental properties. Property owners were getting value from their platform by finding trusted home service providers.

Pivoting the software from B2C to B2B only required some subtle changes to the product.

You can imagine how different the pivot was to distribution.

Instead of marketing to every homeowner in the country, they were now laser-focused on marketing to property management companies.

A change in distribution is driving the product changes, ultimately leading to amazing growth, and they made the Inc. 5000!

If you built a product and are struggling to sell it, you need to consider pivoting who you are selling it to and making your company stand out. Check out my previous article about the remarkability formula as well!

You need to get distribution right before you can scale or even perfect the product.

Start with Distribution

My best advice to startup founders?

In a perfect world, you would always start with distribution.

The best opportunities are the ones where you know who you are selling something to, and you know how to reach them. 

You need something to sell.

The problem is coming up with ideas of things to sell them or figuring out how you would execute on getting the product to market.

A simple example of this is just thinking about who you know.

I have friends who are car dealers, and I have long thought about partnering with them to build products or services to help them. I could even make them partners in the venture.

If I had the right idea, it would be the perfect situation.

Here are a couple of questions to ask yourself:

Do you have a network of people that you could sell some product or service?

Do you have the expertise to execute on what they need?

I wrote an article before about why you are the right person to start this company. It is one of my favorite articles. It relates directly to having an advantage, and a lot of the time, those advantages help with distribution.

Corporate Partnerships

Another great option is working with corporations that wish they could build technology products but don’t have the expertise or focus.

They are distribution experts but not good at innovation.

My last company, At Capacity, was a good example of this.

We had a partner who needed a new software product but didn’t know how to build it internally.

They had the distribution part figured out, and they also had the idea.

They just needed the execution.

We had the expertise to execute.

After about 6 months we were able to build the MVP of the software and get it to market. After nearly 18 months, we had grown substantially and fully proven the product and business model. We ultimately exited that company and sold it back to our original partner.

Upselling Customers

Another great example of this is creating secondary products to upsell existing customers.

You already have a happy customer base. You need more things to sell them.

That is a fantastic opportunity in business to build or partner with other people on products and services to sell to that existing customer base.

It is another great example where you are starting with distribution and then focusing on the right idea and how to execute it.

Startup Acquirers are Distribution Kings

Ironically, I think most companies that buy startups are kings at distribution.

They tend to be larger companies looking to strategically buy products they can sell to their existing customer base.

They have huge sales teams, great distribution, and great execution.

They also usually suck at innovation.

That is where we come in! We innovate and eventually sell to these big companies to give them another widget to sell.

The key to getting there?

Mastering distribution of your product or service.

Ideas and execution are important. But how you do execution is dependent on how you will do distribution. The product will also change with it.

As a serial entrepreneur, I highly recommend spending as much, or more, time on distribution as you do building the product or service itself.