The Best Product Does Not Win – The Best Distribution Does

Recently I was reviewing a recent presentation by Bjoern Lasse Herrmann given at the Small Business Summit.  His company, Compass, has collected data from over 30,000 start-ups.  And while his insights are focused primarily on SaaS (software as a service) companies, I find the advice useful for all types of new and emerging businesses.

The overriding theme: Focus less on the product, and more on distribution big hits to get your offering in front of potential customers.  Specifically, based on his research of high growth businesses, Bjoern presents five recommendations:

Focus on mobile technology.  We know that right now the web is accessed 27% more on mobile rather than desktop platforms.  Take advantage of this growing trend by making your website mobile friendly with a responsive design and streamlined options for commonly used actions – like key information and purchasing.

Make liberal use of partnerships. Rather than trying to get found, capitalize on partners for distribution and promotion.  Many companies try to do it themselves by investing in direct sales or SEO – this approach is slow, expensive and often unsuccessful. A partnership strategy is shown to be 10 times less expensive than other channels — and much quicker.

Cross-sell, not just for revenue, but to build distribution networks. You are more likely to build a successful partnership if there is an immediate win/win for both parties. Cross-selling partner products gets you quickly noticed by the partner and lays the groundwork for more aggressive distribution plans.

Scale fast and build a platform.  Bjoern recommends focusing on building a brand with a defensible, thought our target market. Again, instead of worrying about product features, a strong clear message is the platform on which you can build a fast-growing company.

Band together. If you build not just a product but also a distribution network to a customer group, you will be very attractive to enterprise buyers. For example, I know of a growing business in my area that delivers fresh produce directly to the doorstep.  As they build trust and their network, they are able to offer fresh meats, milk, preserves, bread and more.  The value of their company therefore, is not organic vegetables, but direct access to a specific consumer segment that values high quality local food and convenience.

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