The Startup Distribution Engine: Why You Need One and How to Build It
By kbodnar@hubspot.com (Kipp Bodnar and Kieran Flanagan)
As a startup founder or marketing leader, you’ve likely heard the mantra “distribution is everything.” But what does that really mean, and how do you put it into practice?
Building a great product is hard, but it’s only half the battle. The real challenge is getting that product in front of the right customers — repeatedly, and at scale.
For most startups, this is where things fall apart. In my experience, many founders either get stuck trying to sell to fewer customers at a higher price or chase thousands of lower-priced customers. As a result, they end up stretching their resources too thin and fail to create sustainable growth.
The solution is to build a scalable distribution engine. But how do you set up a system that consistently delivers results, while still balancing your current channels and marketing strategy?
In a recent Marketing Against the Grain episode, Kieran and I unpack why startups need to prioritize distribution from day one — and how to design a distribution system that works.
Check Your Numbers: Why a Startup Distribution Strategy is Critical
Let’s get real about the math. Most Series A or B startups are selling to mid-market companies with annual contract values of $5,000-$12,000. To achieve the growth investors expect, you have two options:
- Go upmarket and increase your ACV to $250,000+. This is incredibly difficult and, in my experience, most fail.
- Acquire thousands of customers at your current price point. This requires a powerful distribution engine.
The reality is, most startups never invest enough time in building that engine — and without it, they’re at a standstill.
The key is to design a distribution system that’s both predictable and high-leverage. Why? Because predictability gives you forecasting power, while leverage allows you to acquire customers efficiently.
Here’s how to approach it.
How to Build a Startup Distribution Engine
Having worked with countless startups (and helped build HubSpot’s own distribution engine from the ground up), Kieran and I have learned a thing or two about mastering distribution. Here are our top four tips.
1. Identify your product-channel fit.
Startups often talk about product-market fit — but just as critical is product-channel fit. In other words: which distribution channels best align with your product, attract customers, and allow for repeatable growth at scale?
At HubSpot, for example, we built our distribution strategy alongside our product development. Since our product was built around inbound marketing, we focused on channels like content marketing and SEO, which attracted our target audience while simultaneously (and conveniently) showcasing the actual value of our own product.
By aligning our distribution strategy with what HubSpot was designed to do — inbound marketing — we ensured that both our product and channels organically grew together in a way that was scalable and repeatable.
2. Balance predictability and creativity.
One of the toughest challenges of building a startup distribution engine is balancing predictability with creativity. You need reliable, predictable channels to fuel steady growth, …read more
Source:: HubSpot Blog
