Product Vs. Distribution: What’s Important?

When Should The Product Manager Quit?

And for many of these products, what will make companies successful is the customer acquisition process. Customer acquisition >> product. An example of this is Salesforce. As much as ppl complain about Salesforce ALL THE TIME, that company is still on a tear.

Elizabeth Yin, Hustlefund VC
Which is more important for a startup? Product or distribution? I think everyone would argue both 🤣 but if you had to pick one, what would you pick and why? A thread >>
3) I think his original tweet still largely holds. The problem that most first time founders have (myself incl) with starting software companies is in focusing too much on product and not enough on customer acquisition.
4) It’s actually *very rare* in my experience for first time founders to have the issue that Atrium had — where there are just *too many customers*! That just doesn’t happen to most ppl!
5) And if you are amongst the few that are faced with this problem, you will KNOW you have this issue. -Your waitlist will be too long that you can’t onboard all your customers -People will be emailing you all the time asking for access to your product
6) If you have this issue, this is a great problem to have! And you SHOULD spend all your time on the solution to make sure you have what ppl are signing up for. And solving for that solution usually means you SHOULD spend more time on *product* than on distribution.
7) But again, probably only 5% of my portfolio has this problem. Everyone else — which is most ppl — probably needs to focus on experimenting with: -building an audience -collecting a waitlist -pre-selling -running ad experiments -figuring out partnerships Etc.
8) And even doing this earlier than when your product is ready so you have an audience ready to launch with. And in many cases, a manual-esque product and working w/ customer in a pseudo-consulting esque manner is helpful to shape product direction and get sales faster.
9) And for many of these products, what will make companies successful is the customer acquisition process. Customer acquisition >> product. An example of this is Salesforce. As much as ppl complain about Salesforce ALL THE TIME, that company is still on a tear.
10) Now there are exceptions. Those exceptions are dependent upon who you are selling your product to. E.g. if you are building a product for designers, then the product had better be *well designed*. And in many cases, for designer products, your product IS your distribution.
11) If you’re building for an audience that has high expectations for product, then a strong product >> customer acquisition. So understanding what type of product and customer you have is key to know what to focus on.
12) And some founders are better at serving some audiences vs others. Knowing thyself is equally impt. I backed 2 founders at my prior firm who are excellent at product, but the product they were building then relied on strong customer acquisition. The company shut down.
13) I backed them again @HustleFundVC for a totally different business. This new business serves an audience that appreciates and even expects strong UX. Their customers pick them over the clunky / complex older competitors. And they are on a tear with this new business.
14) If I were building a new startup today, for me, I would pick an oppt where I felt I could win on customer acq. I’m horrible at product. To some extent, picking to start a VC is an example of this. there’s little to no product. It’s almost all marketing.
15) For some ideas, product is more impt. For most ideas cust acq is more impt. Play to your strengths. If you are great at product, pick an opp where product is most impt & REALLY VALUED by customers. If you are great at cust acq, pick an oppt where prod doesn’t matter as much

Total
0
Shares

Sign Up for NextBigWhat Newsletter

Daily.