Why Distribution Beats Product Every Time

A decent product with great distribution will beat a great product with no distribution.

Facebook was not the first social network, Google was not the first search engine, and the iPhone was not the first smartphone.

Here’s why distribution is as important, if not more important, than the product itself.

The Real Problem

I don’t make blanket statements, but I will say this: most companies don’t fail from having a horrible product.

Typically, it’s because people don’t know they exist. As a team that knows the power of strong distribution, we spend a ton of time drilling down on this before investing.

Defining Distribution

“Distribution” doesn’t necessarily mean having an abundance of followers. Having an audience is a privilege and a trust exercise—it is not a group of people that have a buying relationship with you.

We define distribution as having a reliable and direct channel to either capture their attention through content or reach their doorstep by getting your product to them physically.

Adding Real Value

There’s no silver bullet to solve this problem. Our fund has created an ecosystem where we provide capital, attention, or education wherever it’s needed.

One of the terms I always look to quantify in the investing world is a “Value-Add investor.” Why? Because funds often measure their ability to “add value” while treating their portfolio companies more like a diversified basket of lottery tickets, calling only to warn of a competitor pitch they sat in on or to “check in on churn.”

At CT Capital, we think about all the non-financial ways we can help. We figure out how we’re going to add value by first figuring out what you need. If you need more eyes on your product, we show you how to create and target your avatar.

Building the Plan

From day one, we work together to build and refine your distribution channel because we know distribution is greater than product. Effective media and distribution is a learned skill. It stems from understanding the factors that drive the identity and habits of your customer. They are a real person that you interact with regularly, someone with a profession, hobbies, preferences, and a strong pain point that you can solve.

As with any good plan, the results rely on execution. Our founders use our ecosystem to define and target their ideal customer profile by asking key questions:

  • Where do they live?
  • What’s their background?
  • Where do they spend time online?
  • What problems keep them up at night?

Then we work alongside each company to create a distribution roadmap.

The Modern Challenge

Let me be clear: it’s not easy. We’ve spent years on trial and error to refine the process. But we’ve learned, and we increase our chances of success. Don’t get me wrong—the distribution game is getting harder:

  • Over 400 million terabytes of content are created every day
  • The average human attention span is 8 seconds
  • One-third of all venture capital money raised goes towards paid ads

This creates an arbitrage opportunity for those who understand the dynamic.

Conclusion

Most investors can’t do this because they don’t understand distribution. They don’t see that it is a learned skill that comes from deeply understanding your customer and building a reliable channel to reach them. While the game is getting harder, it presents a huge opportunity for those who get it right.

While many prefer investment as the key driver to scale, we prefer revenue. We’ve amassed an audience that generates over 100 million monthly impressions that overlap with our portfolio.

If you’re building for the future of Main Street and need more than just a check, my DMs are open. We’re always looking for this generation of builders.

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