Redpoint venture capitalist Tomasz Tunguz wrote a great little article last week about what he called “startup judo,” the way successful startups find something they can use as leverage against competitors that doesn’t fight strength with strength. This secret sauce can be anything, but Tunguz mainly highlighted distribution.
Startups shouldn’t rely on more manpower, bigger ad budgets or data access advantages in fields where there is a large incumbent. During its infancy, Google won with distribution. Most internet companies believed search wasn’t valuable. Google thought differently. They offered to power all the major portals’ search engines and eventually dethroned them. This was Google’s secret.
If that description doesn’t sound like distribution in the traditional sense, it’s because it isn’t. The key to Google’s early success wasn’t pursuing brute-force tactics like shipping more copies of software, gaining more users, or even being the only search engine in town. It was finding a way to insert their slightly better version of search into people’s lives without pissing off other players. It’s easy to forget that Google found early success by providing search services to other companies. Once they discovered that initial entrance point they were able to rapidly expand and crowd out the very companies who helped them get a leg up. Google is far from the only one to use this approach. Amazon used cheap Internet book sales as a way into the web services market. Yammer worked its way into thousands of offices by allowing any employee to start a network for free without asking permission of higher-ups. There are hundreds more examples from tiny startups to large tech companies building distribution into their product in order to get a foothold and then starting to expand.
Why are tech companies so successful at this strategy? Probably because they’re often run by engineers. If you look closely at these examples, you’ll see a combination of two common developer thought patterns we’ve discussed before: breaking off small chunks of complex problems and using lateral thinking to find less obvious, but better solutions to seemingly straightforward problems. Used together, the two techniques can make a company unstoppable.
Most traditional companies would see distribution as a problem to be solved after a product is finished. Once everything is built, you kick out the engineers and drag in the marketing gurus to convince people to start using it. The genius of successful tech companies is that they realize that the process doesn’t have to be linear. You don’t need to beat every competitor at everything, and you don’t have to be finished with your product before you start to spread it. In fact, they tend to build distribution into their products as a feature from the beginning.
Facebook is perhaps the best example of this kind of logic at work. The original version of the site was almost embarrassingly simple and included just a tiny fraction of the features we use today. But it was enough to be slightly more useful than its competitors, and it was deliberately designed to be more interesting as you convinced more of your friends to join. Once it worked its way into people’s lives, it had the foothold to expand into a communication tool, gaming platform and, most recently, an operating system layer for desktop and mobile web.
These examples offer a less intuitive recipe for success that any business can learn from: Think of distribution as a part of your product from the beginning, and don’t try for world domination right away. Build the simplest and most useful version of your product first. Once you have a foot in the door, you might just be irreplaceable.
Want more examples of engineering thinking? Take a look at our ongoing feature: How To Think Like An Engineer
[Photo by Flickr User jon schladen]