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Forget Network Effects. Distribution is The Invisible Force That Drives Digital Dominance

Welcome to another edition of PunchTime 👊 

In the last edition we talked about how creativity is a way of expressing ourselves and how the right approach can have a profound effect on your life and business idea. In this edition, I want to talk about the importance of distribution, whether that is for your personal brand or the company you’re building. Let’s dive in.

In the Digital Age Distribution Is King

Remember when we used to walk around the streets and our mind was simply observing our surroundings? We sometimes forget that the internet as we know it is only ~25 years old, and before that, attention seemed more available. However, with everything at ones fingertips we get constantly distracted and attention is the new oil, the most scarce resource. Now what does this have to do with distribution? I’m glad you asked!

When I think about great distribution in the digital age, I think of DATA. Wait what?! I thought we talked about attention? Yes, but my framework that I call DATA is not necessarily what you’re thinking about.

DATA stands for Demographics Audience Trust Attention.

Demographics
This set of information is not limited to the traditional datapoints around age, location, and gender, but more enhanced information about our preferences and behaviors.

Audience
An audience can be as simple as a contact list, user base, customers, a fan base, or following. However you define it, these are people who you have access to and they listen when you speak.

Trust
When you have enough trust that people perceive you as a leader (whether that’s a person or a company) you have the power to influence.

Attention
Finally, when you’re able to capture someone’s attention, you’re in the game. Why? Attention leads to processing information, which leads to planting a thought or desire, and that will lead to certain behaviors.

Now put these pieces together, and you have the perfect recipe to dominate. Especially in a digital age where people are constantly available through their phone and can buy everything, everywhere, at all times.

The demographics give you the information to create targeted offerings, the audience gives you the advantage to reach billions within a second, the trust gives you the power of influence, and the attention (which you have due to the other three parts) will guarantee immediate scale to either monetize or get feedback on a substantial dataset that allows you to make statistical inferences and learn for the future.

But what about network effects? Sure, network effects are fantastic, but just like brand recognition, economies of scale, reach, cross-selling opportunities, and so many other desirable outcomes, they are all side effects of great distribution.

Think about it, most of us spend a majority of our time every day using products of several of the following companies that have great distribution, i.e. DATA.

If you’re a company and want access to distribution, you need to go through these gatekeepers and hope that you can partner rather than compete. Because if any of these companies want to push a new feature, a product, or even a way of thinking, they have DATA, the power of distribution.

Check out this fun timeline video of the most popular websites since 1993, and how the power of distribution in the digital age creates dominance.

Whether or not we’re aware of it, these companies have an insane degree of power over us. Because what we consume and interact with, consciously and subconsciously influences how we think. So whatever they throw at us, we’re more likely to trust and use/buy.

Wait can you show an example? 🤔 

There’s many examples in recent history that showcase the power of distribution. The graphic below only shows a few of them.

However, one of the classic examples is always Google. So when I saw this post by Brett Goldstein, I immediately had to think of DATA and the power of distribution.

Google is looking to expand their insights in the advertising funnel. Basically, once a user clicks on an ad, they are directed to the advertiser’s website, so Google’s insights end once the click occurs. Buying a CRM solution like Hubspot would be an immediate value add to all businesses using Google tools, allowing them to manage the entire customer journey in one place.

As Brett says it:

“and with google's AI chops, hubspot could become a CRM powerhouse. We're talking automated workflows, predictive lead scoring, and even suggestions for the best time to reach out to a prospect.”

With that said, be aware of how companies who have DATA influence your behavior, but at the same time use the framework to understand your own distribution. Whether that is your network, your personal brand, or how you leverage other companies and distribution.

That’s it for today. I’m always looking for feedback, thoughts, and ways to improve.

Also, please connect if you’re looking for someone to help brainstorm or want help with strategy, GTM, financial modeling, and innovation projects. I’d love to hear from you. Thanks & Rock on!

-Andrea

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