Why an Amazing Product Isn’t Enough for Startup Success
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Investors love to say that “first-time founders focus on the product, while second-time founders focus on distribution.” But what does that really mean? And how does it impact the success — or failure — of a business?
Let’s break it down. First-time founders often fall in love with their product. They pour endless hours into developing every feature and perfecting every line of code, believing that if they create something amazing, customers will come flocking to them. And while that mindset isn’t wrong, it’s only part of the equation. The reality is that even the best product in the world will struggle without an effective plan to get it in front of the right audience. This is where seasoned founders shift their focus — away from product obsession and onto distribution.
When we think about success stories like Dropbox or Slack, it’s tempting to assume that product flywheels are the holy grail. Dropbox, for example, leveraged its viral growth model, growing 3,900% in 15 months by incentivizing users to invite their friends in exchange for more storage space.
Slack created a product that became indispensable for teams — from 50,000 daily users to 1 million in 2015 — leading to rapid adoption across businesses worldwide. But these companies are outliers. For every Dropbox or Slack, there are countless startups that developed excellent products but failed to build the distribution necessary to reach their target market.
Related: 4 Steps to Becoming a Sales-Focused Founder (and Why It’s Important)
Why focusing solely on product is risky
The obsession with building the perfect product often blinds founders to a harsh reality: Customer acquisition doesn’t just happen. You can create the most revolutionary product in your industry, but if no one knows about it, it won’t matter. The graveyard of startups is filled with products that didn’t fail because of poor design or weak functionality; they failed because they never figured out how to reach a sustainable customer base.
SaaS unicorns make headlines because they cracked the code, but these kinds of viral growth models are incredibly rare. It’s risky to rely on the hope that a “product flywheel” will propel your business to success. For most companies, especially those in niche or highly competitive markets, growth won’t come from product-led strategies alone. And that’s where sales-led, distribution-focused companies gain a critical edge.
Why sales-led companies are more resilient
Sales-led companies understand that revenue doesn’t just appear — it’s generated by a well-thought-out, proactive approach to distribution. Focusing on sales and distribution creates a steady, predictable revenue stream. This approach is particularly important in turbulent economic times, where customer acquisition can be challenging and budgets are tight. Sales-led organizations create a foundation of trust with customers, build long-term relationships and foster customer loyalty.
Companies that prioritize distribution don’t just rely on one channel or a lucky break; they develop a diverse network of customers, partners and resellers who can keep the business growing, even when the market shifts. They’re not betting everything on a single viral moment. Instead, they’re creating a sustainable network of people who trust their brand and want to buy from them. When times get tough, these companies don’t just survive — they thrive. They’re not left scrambling for new customers because they’ve already built a moat of loyal clients and partners to keep them afloat.
Take a company like HubSpot, which didn’t just rely on product features to fuel growth. They built an entire ecosystem of resources, certifications and community events that kept customers engaged. By fostering these long-term relationships and creating a robust distribution network, HubSpot ensured that they were the go-to brand for inbound marketing tools, even as competition grew.
Key takeaways for business leaders
For business leaders, the takeaway is clear: Obsessing over distribution can be more impactful than perfecting every inch of your product. A product that’s “good enough” but distributed well will often outperform a “perfect” product that no one knows about. And distribution isn’t just about pushing a product out into the world; it’s about building a trusted brand that customers will want to engage with repeatedly.
To build a sales-led, distribution-focused business, you need to:
Identify and leverage strategic channels: Whether it’s through partnerships, resellers or digital channels, pick the ones that make the most sense for your target market and double down.
Invest in relationships: Long-term customer relationships are more valuable than quick wins. A customer who trusts your brand will not only return but also advocate for you in their networks.
Create a moat with distribution: Build a network of customers, resellers and partners who can support you even when things get rocky. Relying solely on viral growth or product features can be a risky gamble in unpredictable markets.
At NewCampus, we’ve taken these principles to heart. We understand that product innovation is important, but we’ve built a business that prioritizes distribution and customer relationships to fuel our growth. We focus on building a robust network of edtech companies and a vibrant community to ensure that, even if someone isn’t ready to buy from us today, we’re top of mind when they are.
Instead of assuming that our product will “sell itself,” we put the work into creating a community that supports and amplifies our mission. We’re constantly engaging with our network, forming strategic partnerships with other edtech organizations and focusing on building relationships with learners. This approach doesn’t just create immediate opportunities; it establishes a foundation that keeps our brand relevant and trusted over time.
Related: 8 Ways to Be Certain You Are Selling Solutions Through the Right Channel
Looking forward
In a world where thousands of startups pour everything into their products, the companies that win are those that focus on getting their product into the hands of the right people. Sales-led, distribution-focused businesses have a level of stability and resilience that product-obsessed companies often lack.
In today’s market, the companies that can successfully bridge both will be the ones that grow, scale and stand the test of time. Embrace distribution as a cornerstone of your strategy, invest in long-term relationships, and create a network of advocates. The payoff isn’t just growth; it’s sustainability in a world that’s constantly changing.
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Allstate corporate office in Northbrook, Illinois. Photo by Scott Olson/Getty Images
