Distribution
How do you reach those who need what you offer?
Superior distribution beats a superior product - Peter Thiel
Perceive: What Is Distribution?
Distribution is the process of getting your product or service to the customer in a way that is convenient and accessible. It's not just logistics—it's the entire path from creation to consumption.
Distribution is essential to success and should be integrated into product design from day one.
The Distribution Stack
| Layer | Question |
|---|---|
| Awareness | How do people learn you exist? |
| Acquisition | How do they become customers? |
| Activation | How do they experience value? |
| Retention | How do they keep coming back? |
| Referral | How do they bring others? |
Direct vs. Indirect
- Direct: You control the entire path to customer (DTC brands, SaaS)
- Indirect: You use intermediaries (retailers, marketplaces, affiliates)
Each has trade-offs in margin, control, and scale.
Question: Why Does Distribution Matter?
The best product doesn't always win. The best distributed product wins.
The Hardest Problem
Distribution is the hardest and most important problem to solve. History's biggest innovations needed distribution solutions:
- The printing press democratized knowledge
- The plough transformed agriculture
- The internet removed geographic barriers
Product-Distribution Fit
Just as you need product-market fit, you need product-distribution fit:
- Does your distribution channel match your customer's behavior?
- Can you afford to acquire customers through this channel?
- Does the channel scale with your growth?
The Distribution Trap
Many startups build great products then ask "how do we get customers?"
This is backwards. Distribution should inform product design:
- What channels can you access?
- What do those channels reward?
- What products fit those channels?
Act: How to Build Distribution
1. Define Your Path
Make your product or service available to those that need it with:
- Minimum time
- Minimum effort
- Minimum cost
- Maximum quality
- As close to the point of need as possible
2. Choose Your Channels
| Channel | Best For | Trade-offs |
|---|---|---|
| Viral/Word of mouth | Consumer products with social value | Slow start, unpredictable |
| Content marketing | Complex products, thought leadership | Time intensive, slow ROI |
| Paid acquisition | Scalable products with good unit economics | Expensive, competitive |
| Sales | High-value enterprise deals | Expensive, doesn't scale linearly |
| Partnerships | Access to established audiences | Loss of control, split value |
3. Integrate Distribution Into Product
The best distribution is invisible—built into the product itself:
- Invite mechanisms
- Sharing features
- Network effects
- Platform integrations
4. Measure and Optimize
Track the full funnel:
- Cost per acquisition
- Conversion rates at each stage
- Customer lifetime value
- Payback period
Technology and Distribution
Blockchain examples of distribution innovation:
- Extra Virgin Olive Oil - Provenance tracking
Checklist
- Do you have a clear path from product to customer?
- What is your cost to acquire a customer?
- Does your distribution scale?
- Is distribution integrated into your product?
- What would 10x better distribution look like?