Here are two statements from founders.

“We're growing like crazy, but our product is absolutely crap.”

“Our product is quite good, but growth is a challenge.”

Why is it always this trade-off between product and distribution? This insight of this article is actually hundreds of startups in the mak ing and I hope illuminates you to a blind spot.

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I believe that founders and investors are either product-oriented or distribution-oriented.

✅ Product-oriented founders tend to focus on creating, or optimizing the creation. They tend to more naturally be oriented about the quality of the product itself, the design of the system or the content.

Distribution-minded founders tend to focus on expanding the influence, and optimizing the expansion. ✅ They think more in terms of expanding the influence of the product or system. Their natural bent is towards the quantity of the inputs and the outputs, the feedback loop, of the startup’s inbound and outbound motion.

I’ve seen that founders tend to be naturally oriented towards one more than the other. There is a rmore natural un-to-the-hoop orientation for people that they more naturally see and can execute in, and the other one requires much more friction to employ.

They are two different mindsets. Both almost never exist in the same person. 

Even though founders have a particular orientation, running a startup and winning in the market requires both orientations very strongly.

This insight not only is relevant for founders and how they handle themselves, but also to the team members that they bring on along the way.

Let me explain.

I had a call at one point with a startup CEO. The CEO had a physical product and had a B2C angle as well as a B2B2C angle.

As the CEO was giving me an update on their company, they told me about several things: 

I took that in and then looked at the revenue from the last three years or so. Something stuck out at me.

The revenue was largely the same from two or three years ago.

At the end of our chat, this founder asked me a really good question. “Are there some glaringly obvious things that you see as flawed or have the potential of succeeding or inhibiting growth?” 

I only recently had developed this insight around product-orientation and distribution-orientation, and I decided to test my hypothesis on the founder. 

I noted how the founder had focused their update around the products that they had created, or were still going to create. Combined with the company revenue largely the same from past years, it was pointing to one major thing - that this founder had more of a product-orientation and ran their startup as such. By extension, the motion of distribution was more vague, less fascinating to them, not as much their zone of genius. I reasoned that they need somebody with a strong distribution orientation in order to move forward.

I reasoned to the founder, “It feels like to me, there's a lot of room to run there without touching anything else on the product side for you.”

I do resonate with this founder above. I am product-oriented as well. When I was a FinTech startup founder, my co-founder, who is my father, was also product-oriented. My orientation was more about building a quality product. It was very easy for me to assume that once we had a good product, then the rest would take care of itself. 

We spent 50 weeks in 2017 building our product. We kicked off development the first week of January and ended it the last week of December that year. My obsession that year was to build a great product. 

When we “finished” our product last week of December 2017 and started to sell it in early 2018, we didn't have success. No bites. 

✅ My product-minded father observed our lack of sales engagement and developed the hypothesis that the product wasn't selling because we needed a better product. ✅

So he went back to the drawing board with our product development team and tried to rework the product.

There are so many strengths of product-orientation, but one downside is that the product is never done. The founders think that the product always requires optimization.

When in reality, we needed to flex, or somebody else to help us flex, to an orientation that we did not possess - a distribution-orientation. 

✅ I’ve observed with my distribution-minded peers that they focus on expanding the influence of the product/system despite any deficiencies in the product. ✅

The timing of this article is very appropriate.

Tundra Angels just invested Lotza, with superstar distribution-oriented founder and CEO Laura Markewicz. Lotza is the The Soda Made to Party.

Laura's product went through various reformulations over the last two years since I have known her before Tundra Angels invested.

The first time I tasted Lotza in early 2024, it was pretty good. But I am aware that, some people that I talked to where not the biggest fans of it.

Now, if Laura were a product-minded person, then she would be waiting to launch in earnest until she got the formulation just right.

But Laura's orientation was not to wait to get the formulation just right - but to expand the influence of what she was doing, despite the perceived deficiencies in the product. At one point, she had a formulation that was sub-optimal. She didn’t pull the product from the shelves. She kept her foot on distribution.

She eventually brought on the former head of formulation at a national coffee chain to be her head of formulation. In other words, she delegated this product-orientation to someone who could flex with much more strength that she knew she could. 

Not heeding this truth of product or distribution-orientation can be fatal for startups.

✅ Even though founders have a particular orientation, running a startup and winning in the market requires both orientations very strongly. ✅

I’d reason that founders are unknowingly handicapped by not realizing what their orientation is, and by not seeing the orientation that they need and taking appropriate action.

✅ Furthermore, I believe that investors often assume that founders can go the full spectrum - both incredibly product-oriented and flex their mindset to be incredibly distribution-oriented. ✅

Believing this, they reason, this startup can build out the GTM or distribution model. But can they really…?

But I do not believe that most people are wired that way. Nearly every time, I have found that largely, those two skill sets exist in different people. 

Let me share a third story.

There was a startup that I encountered once that had a completely clear product-market fit for their market. Customers were eager to evangelize the product to other prospects. Word of mouth was and is very strong.

Importantly, the product is very, very sticky. There are some real defensive modes around how to embed this product into a customer's workflow.

As the CEO and I were talking, my mind was highly focused on distribution.

I reached the point where I told the CEO, "This market is won and lost by pure distribution. You have the market. It's just about showing up and making people aware of you. It's hardly about closing. The market is in such a state of devastation and urgency with the problem such that the pain point is so palatable that once the startup shows up, the customer is basically closed.”

As the CEO and I were talking, this person understood what I was saying but went in a different direction. They started talking about several of the product features that they needed to get into production before they could do some of the outreach that I was talking about. 

Me: I was like, "What? You're already killing it!”

I wondered if I was getting through. It was making sense to me, but for this person, it seems like my ideas weren’t clicking as palpably. 

I never really understood why until this insight clicked around product-orientation and distribution orientation. 

I came to realize that this CEO wasn’t implementing because they didn’t want to. There was a fundamental conviction/orientation that they had - and I was asking them to do something that went against their natural orientation. 

This CEO, based on our conversation, was more product-oriented. They talked about the product features that needed to be built out before they went all out on awareness. 

Contrast that with Laura Markewicz of Lotza. Her product over the years has a taste that some people didn't really like. She's gone through numerous reformulations.

And here's the difference. Laura didn't let an imperfect product stop her distribution.

✅ It’s better to be known imperfectly than to hardly be known at all in a perfect way. ✅

I want to bring this home to one one key reason why all this matters. This is why early-stage startups need a strong balance of both.

✅ There is a limited window of opportunity to win the market. ✅

Startups are all about timing. 

Those 50 weeks that we spend building a product. Zero effort was given to distribution. Zero. Bond trading startups like us sprouted up quite frequently. The market was moving. In about a year to a year and a half, the market winners had been crowned.

During those 50 weeks, in my mind's eye, I mulled around in my head, oh so many times, wondering if this time we spent would later prove to be in vain years later. 

But here is another point.

Distribution actually makes the product better.

It's the inputs that distribution brings. The learnings from the messaging, the learnings from what your ideal customer profile is, the learnings from the best method of outreach versus others. The learnings from the product being out there that gives you the inputs to make the product better.

Maximizing eyeballs at scale actually helps inform the product itself.

Nathan May recently shared with me this quote regarding outreach:

"Most people underestimate the volume required to get the results that you need."

My mentor once tuned me in to the importance of fascinations in startups, saying, “Entrepreneurial ventures live and die by the people that run them… so spend time to get to know yourself and your team. It will consciously or unconsciously tune and guide the way that they are able to pivot. Fascinations will direct the development of your business.

If you don’t become self-aware of what fascinates people, it will cripple your business and will sabotage it on a very early phase.”

It's also important to understand that founders do not need to, or sometimes should not, try to strengthen their orientation in the other category. Often times the best thing to do is import the orientation that you need via bringing on talent.

So at the end of the conversation for the first founder above, I offered to connect them with one of the top distribution-oriented founders that I know in their space. Not necessarily, because I thought this person would help this startup grow. But moreover because knew that this founder needed illumination around a blind spot, an orientation, that this person did not naturally have.

✅ Product-oriented founders tend to focus on creating, or optimizing the creation.

Distribution-minded founders tend to focus on expanding the influence, and optimizing the expansion. ✅

Even though founders have a particular orientation, running a startup and winning in the market requires both orientations very strongly.

Which one do you have, and which one do you need? What is the path of least resistance to acquire that?

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