Curated Resource ( ? )

Distribution

my notes ( ? )

Andreessen Horowitz on sales channels, because "products often fail because the company chose the wrong route to market... A properly designed sales channel is a function of the product that you have built and the target... you wish to pursue."

Presented as a function: the channel (c) is derived by a function (f) - distribution design - which process product (p) and your target (t) as inputs: f(p,t) = c. Multiple products and/or targets require multiple sales channels. Factors include:

  • how p is delivered to t: online (A), or via a delivery service (B)?
  • assistance required to users: none (A), minor (B) or major (C) - may vary by customer profile (small business, corporate)

That gives 6 distribution characteristics. MyHub.ai's offer to Editors, for example, aims to be (A,A) but currently appears to be (A,B), while its SaaS offer to business will aim to be (A,B).

"Next, we look at target decision makers... different decision making processes require different sales strategies". How do they take a decision? 6 examples: MyHub's targets are "I. Individual" and ("II. Small group — a small engineering team"), respectively.

"Next... some rules of thumb for designing a channel to reach these types of targets depending on the product characteristics...Targets I and II can often be sold entirely via marketing; viral distribution (if you have a product that inherently travels by word of mouth..." - and the latter is true of MyHub.ai's offer to Editors.

More complicated decision-making processes are incompatible with some product types: selling [A, C] or a [B,C] to targets I, II & III ("Entire small company") will fail. Targets IV-VI are even more difficult as "nobody inside the customer actually knows how the decision will get made" (so true).

Example: Dropbox "reached targets I and II with a brilliant [A,A] product and primarily viral distribution, but they had less success with type VI targets... opened the door for Box.net, which built a direct sales channel ... moved ... from a strictly [A,A] to sometimes [A,B]".

Then: consider more target parameters, geography, and the different salesperson profiles.

Read the Full Post

The above notes were curated from the full post a16z.com/2017/06/09/distribution-model-sales-channels/.

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