Digital space: Better distribution trumps better product

If you are trying the digital transformation of your business, distribution (customer acquisition) is one of the key aspects that you should look at transforming.

Let's look at the following statistics.

The market cap of the top 5 S&P 500 companies (GAFAM): $4,095,058,706,432

The market cap of the bottom 282 S&P 500 companies: $4,092,769,755,136

Each of the top-5 companies (GAFAM or Google(Alphabet), Apple, Facebook, Amazon, Microsoft) started off as awesome product companies but eventually transferred product-leadership to distribution-leadership through the first product. Intentionally. This is not just true for GAFAM. It has been this way for a long time. E.g. IBM, Cisco etc. Even Google has spent considerable resources on laptop manufacturers and other websites to keep Google as the default search engine. 

A great product-company that doesn't build a superior distribution ultimately gets taken over by the one which does. The distribution leader eventually creates better traction, attract more resources and develop better products or acquire the existing ones. The growth momentum continues full steam by pushing newer products through the same distribution pipes. E.g. Word, Excel, Powerpoint each were independent companies that Microsoft acquired, created MS Office suite and pushed through existing distribution.

This is true for both B2C as well as B2B companies. Remember, the mass customers don't find you automatically! You need a superior distribution to get them.

So, go build a superior distribution!