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Why Your Distribution Is As Important As Your Product

Peter Thiel, one of the co-founders of PayPal, uses “distribution” as a catchall term for everything it takes to sell a product.

Thiel has said, “Superior sales and distribution by itself can create a monopoly, even with no product differentiation.”

Many pundits point to Apple to support the antithesis of this statement.

They quote the famous speech given by Steve Jobs when he returned to Apple in 1997, where Larry Ellison, who was sharing the mic with Jobs, said,

“The important thing is to build products that are wonderful and, as Steve would say, insanely great, and it's time to build insanely great products.”

Most people focus on this part of the speech and the reason for the subsequent turnaround of Apple.

People forget, though, that Jobs, on his return, also said,

“The Apple brand has clearly suffered from neglect... Apple spends a fortune on advertising.. you'd never know it. We need to get better at marketing Apple.”

There is a myth that people will come if you build great products.

They won’t.

TikTok made short-form content more accessible to consume than Instagram.

They hired our marketing agency for distribution.

TikTok became the world's fastest-growing app due to its distribution model rather than its product.

Many people turn their noses up at distribution, but many of the world’s greatest companies wouldn’t be here without it.