What good is a great idea if no one knows about it? And how can an idea be great if it has never been tested against the market? To whom is it great?
Two years ago, billionaire tech mogul Peter Theil (founder of PayPayl) published his teachings on entrepreneurship in a book called “Zero to One”. The concept of the book is to create something that has never existed by making “one” of it. This is how you create a monopoly in your industry and differentiate yourself from competitors.
In this book, Thiel outlined the importance of distribution — a concept that includes marketing, sales, and advertising — which many people don’t understand, and that’s why most products fail. Theil mentions how billionaires are able to create multiple billion dollar empires by understanding the simple principle of DISTRIBUTION.
To succeed, every business has to have a powerful, effective way to distribute its product. Great distribution can give you a terminal monopoly, even if your product is undifferentiated. The converse is that product differentiation itself doesn’t get you anywhere.
In the quote above, Thiel implies that great distribution can sell a product even if it’s undifferentiated. But without distribution, even a product that is unique and extremely valuable will fail.
Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.
So what does this mean for you?
Your product or service will never be great on its own, you have to find a way to distribute it. This may take some testing.
You probably should create a distribution strategy and measure it against the market. Distribution is unique to every company and every product… there is no cookie cutter approach.
In my free mini-course “The C Word”, I attempt to show entrepreneurs how to discover and administer their distribution strategy by using a 6 step process.
This process is designed to help you find your own unique selling point that enables you to distribute your products more efficiently.
Maybe distribution shouldn’t matter in an idealized, fictional world. But it matters in this one. It can’t be ignored. The questions you must ask are: how big is the distribution problem? And can this business solve it?
Distribution matters… Marketing works!