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One distribution channel is enough
Getting just one distribution channel to work makes a great business. Distribution follows a power law of its own, which runs against the instinct of entrepreneurs who assume that more is more.
Distribution belongs inside the design of the product. Someone who has invented something new but no effective way to sell it has a bad business no matter how good the product is. Superior sales and distribution by themselves can create a monopoly even with no product differentiation, and the reverse does not hold.
The same pattern shows up across a company. One market will probably be better than all others, and one distribution strategy usually dominates the rest. Time and decision-making follow a power law as well, and some moments matter far more than others.
Why does distribution follow a power law?
A power law describes a pattern where a few items account for most of the total. Vilfredo Pareto noticed it in 1896 when he found that about 80 percent of Italy's land belonged to 20 percent of its population. Distribution works similarly because one channel gets the benefit of accumulated learning, relationships, and scale, and that pulls ahead of the others. Teams that spread effort across many channels tend to master none of them.
How did Dropbox find its channel?
Dropbox launched a referral program in 2008 that gave extra free storage to both the person who invited a friend and the friend who joined. Founder Drew Houston has said the program raised signups by 60 percent. The product itself spread through the files people shared with others. By 2010 the service had millions of users.
Which distribution channels can startups choose from?
Gabriel Weinberg and Justin Mares list 19 of them in their 2015 book Traction. They include search engine marketing, content marketing, public relations, sales calls, trade shows, offline events, and viral marketing. Their Bullseye framework has a company brainstorm all 19, test the most promising few cheaply, and concentrate on the single one that works. The authors ran DuckDuckGo and Exceptional, respectively, when they developed it.
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