Distribution as a differentiator
By Josh Bobrowsky
Tech and data have been large differentiators for the last 20+ years within the startup world.
However my gut feeling is with the exception of the top 0.001% of tech companies the difference between success and failure will be distribution. Especially as AI evolves.
Success is driven by distribution and technology, not one at the expense of the other.
What is distribution?
In short, distribution is the ability to have your product seen and used by current and potential customers.
At a deeper level it means everything from marketing, to branding, to designing the UX/UI in a way that people enjoy and naturally want to share.
What makes distribution incredibly complex is everyone has an idea on how to distribute and market their product, but very few people are capable of doing it well.
Recipe for a viral company
Great product + Great story telling + Great ability to share = Viral
Which companies have the best distribution?
Out of the top 10 (really 9) companies on the S&P 500 I would argue all of them except for Berkshire have succeeded at scale partly due to their ability to get high quality distribution. Although over 40,000 people showed up last year to Berkshire’s shareholder meeting in Omaha so you might even be able to argue Berkshire has distribution in their own way.
Tech and data are necessary but not sufficient for success
The startup graveyard is filled with founders who built great technology that simply was not seen or used by their target audience.
To be fair, the inverse is also true, great marketing but poor products.
What every company should be thinking about
How do people find our product
What is the quality of the product
How do we distribute our messaging
What earned media do we control
What paid media creates a positive ROI
How do people share our product
What is the story of our company and what do we stand for
Cluely $15m raise
Cluely, the cheat on everything app, just raised $15m from A16Z. This video got over 5 million views in a few weeks on X.
What is their super-power…. Distribution, messaging and attention.
Love or hate them, what is clear is that this is a bet on their ability to have their product be seen. Their product is somewhat fungible, an app that records what you do but is not detected and gives actionable insights in a live feed. The non-fungible aspect of their company is their viral videos and brand ethos (distribution).
In a space where technology changes week to week an ability to consistently get your message out to the masses has substantial value to almost any company.
Cluely viral recipe
Hero inception story: Kicked out of college for outsmarting/creating a way to cheat on big company interviews many students find silly
Unclear landscape of what tools you should be using for success in school, interviews and at work: Calculators were once thought of as cheating
Lean into the “cheating” in a way that feels bold, authentic and desirable: Guy gets a girl who is out of his league only to mess it up at the end
Raising $15 million from A16Z
I overlayed Cluely’s journey with Ray Dalio’s Hero Journey to show the perfect execution of viral storytelling. This is how they got distribution.
Conclusion
Great marketing is hard to find, and great distribution is even more rare. Exceptional distribution for a company comes when you combine product, marketing and messaging in a way that resonates with both your brand and your users.
For an early stage company to see massive growth they will almost always need to define who their brand is and is NOT for.
As you you look to build your company or brand don’t be afraid to be bold and authentic. The optimal number of mistakes to make on a track to rapid growth is not zero.
Build a great product, tell a great story and give your audience a way to tell the story themselves and you have a multi-billion dollar company.
Cheers
Josh Bobrowsky