Distribution is the only obstacle

Hi, my name is, my name is
(What? Who?)
My name is Slim Shady

Ahem, excuse me
Can I have the attention of the class
For one second?

– Eminem “My name is”

Distribution is the ability to get a product in front of its target audience. Hopefully most of the people in it. This is the hardest obstacles for startups, and plenty of companies build amazing products but fail because they lack distribution.

We don’t need to reinvent the wheel to do it successfully. There are plenty of examples that entrepreneurs can adopt and tweak to their own unique needs. Over the past year we’ve seen a lot of strategies, but most of them fall into a few high-level categories:

The PR machine – Constant attention from traditional and non-traditional media. Constant new “events”, “deals”, “scandals” keep the companies name in popular discourse and bring in a steady stream of new users.

The Social Virus – A product that by its very nature, or through added game mechanics, incentivizes you to share it with your friends. Twitter, Facebook, Quora, Groupon and Zynga have exploded into public consciousness through intelligent use of this strategy. You’ll find some of the top minds in the tech startup world, from Dave Morin to Tom Higley amongst many others, are working on mastering this new strategy.

We’re Mad Men – You can pay someone else to give you millions of target market eyeballs on your product. Its expensive, but if you can successfully acquire customers for less than you make from them in the lifetime that they are a user, then keep spending money.

The Partner – The idea here is to find a partner that has the right eyeballs, but wants additional ways to monetize them. The startup offers the company a cut of its profits in exchange for help getting them to adopt the new product.This is one of the most popular strategies, because it normally requires less up-front costs and improves a new company’s brand.

Word of Mouf – It needs to be included, because nearly all new companies think that if they build a cool product people will instantly get the word out. The truth is that most startups take time to get product/market fit during which time their product isn’t something groundbreaking. Its an avenue for growth, but companies will normally run out of money before it gets them enough traction.

At the end of the day, the right distribution method will likely be a combination of a few of these strategies. Have you used any of these strategies? Have any pros and cons you can share? We’d love to hear what you (our awesome readers) think.

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Distribution is the only obstacle

Appraisals, the GE way

During our five years at GE, Chad and I went through a rigorous appraisal process. Through open, honest and frequent feedback we learned a lot about ourselves and about how others view us. A key aspect of the process was that our managers and mentors actively supported our development on a daily basis, there were no surprises during formal reviews. It is the only GE practice that we copied into our new organization in its entirety. Startups don’t usually have rigid processes, but this is one that we think other startups owe to their teams and themselves. So here is how it works:

Step 1 – One manager talks with everyone on the team about the person being reviewed

Step 2 – One manager writes up a review based on 5 criteria:

Critical thinking – Clear thinking, problem solving, creativity
Expertise – Knowledge in a specific practice area, technical skills
Communication – Able to communicate in a clear, concise, respectful and persuasive manner
Execution – Getting stuff done, fast. Completes what they say they’ll complete, when they say they’ll complete it
Leadership – Autonomy, being a positive/motivational force on the team, mentoring others

The key in the formal write-up, is that each area must include at least one positive observation and one “development opportunity.” For each comment, specific real world examples are required. For every development opportunity, the manager must come up with an action plan for the person to improve. Its the manager’s responsibility to help the person improve through continuous coaching.

Step 3 – All managers discuss and tweak the appraisal and decide how to deliver it effectively.

Step 4 – The appraisal is delivered face-to-face, and ample time is given during each portion for a discussion. Points are not belabored, each development opportunity is delivered candidly. How an appraisee receives and acts on feedback is extremely important. If they are extremely defensive, or get upset, this becomes a serious development opportunity.

Step 5 – The entire team reviews the managers using the same process from steps 1-4. A manager always delivers the feedback to the other manager based on the team’s consensus. This ensures the team is honest with their feedback and not afraid of retaliation.

The entire process is repeated on a regular basis, usually every 2 months. Do you have some questions on how you can better integrate this process into your team? Shoot us an email and we’re more than willing to give you some forms and advice.

Appraisals, the GE way

Why we’re workaholics

The key to this joint, the key to staying on top of things
is treat everything like it’s your first project, know what I’m saying?
Like it’s your first day like back when you was an intern…just stay hungry

– Notorious B.I.G

From the second we start a new business, we all believe that there will be a pay-off. In our minds, its a specific time or event somewhere in the unknown future when we’ll be able to sit back and reap the rewards of our success. We are constantly working because theoretically its bringing the eventual success closer to fruition.

Most of us put up with the daily fear of financial ruin by working harder and longer trying with all our might to bring that payoff to fruition faster. The result is that while we have fun at work, we feel guilty when we are not working. Every hour not worked is slowing down our payday.

When Natty brought up this concept last week, it was an extremely powerful realization. My distinct preference for delayed gratification and ambitious achievements plays a large part in my love affair with entrepreneurship and the startup lifestyle. Upon reflection I notice that many of my startup founders also enjoy the same high-risk/high-intensity/high-reward personal activities. Mountaineering, backcountry trips, endurance races and 3rd world travel. No wonder so many of us call Boulder home.

Why we’re workaholics

What Wikileaks can teach an entrepreneur

All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near. Hold out baits to entice the enemy. Feign disorder, and crush him.
– Sun Tzu, The Art of War

Behind the divisive politics, pundit rampage and laugh-out loud diplomatic correspondence of the past month lies a few great lessons in strategy. Every unexpected or game-changing event must be looked at as an opportunity to revisit our objectives and further our interests. As with most things in life, attitude and resilience in the face of a shifting environment is what defines success.

The market is never in our control, the best we can do is understand its basic dynamics. When the environment changes, much like it did for diplomats following the leaks, calm determined actions are required. The US government knows it can’t stop Wikileaks, so while they developed new strategies in each region, they also acted like very publicly like they were in panic mode.

Startups often get caught in in reverence for honesty and openness and forget that business is a complex strategic game. Their is a time and place for openness, and also for deception. A startup by its very definition survives by the sheer disbelief of the establishment, quietly building market share and technology assets. Help them ignore you and believe you are a non-entity.

What Wikileaks can teach an entrepreneur

How the hell do I do that?

Most of the entrepreneurs I know have long to-do lists with “sticky” items that never seem to leave the list. It confounded me for weeks because at my previous job I was really good at completing tasks, prioritizing and executing methodically. Over the past 8 months I’ve found myself frequently tempted by low-hanging fruit and wooed away from completing high-priority tasks.

So of course, I asked myself what was going on. What I found is due to something I’ll call “Task Diversity.” Whereas at GE I was doing things I largely understood how to do or had sufficient direction, I now find myself doing many new and functionally disparate tasks each day. The new items are usually the sticky items because I don’t even know where to start, they sit there and fester while I sit there afraid to get started.

My to-do list has 3 columns (High/Medium/Low). Starting now the first thing I’ll do each morning and right after lunch will be to tackle a high value item. I’ll probably institute some other strategies as well. Any suggestions?

How the hell do I do that?