Zero to One in Growth

Zero to One touches a unique business mindset, more typical of technology, where building something wholly new is the default mode, rather than building something incrementally better. The core premise of Zero to One then is that it’s much more valuable to create a whole new market/product rather than starting from existing markets.

Zero to one relates to architectural strategy designing or disruption strategy wherein either the existing value is disrupted or a completely new value chain is created. There are other traditional strategy models also doing extremely well.

One of the greatest startups myths

What is one of the greatest myths startuppers tend to believe? That is that “if you have a great product it will sell itself!”?

Selling is everywhere.

Even though sales are everywhere, most people underrate their importance.

Many startups live in a sort of duality conflict. Tech think of sales and marketing as a sort of fraud.?If your product is great why would you need to sell it? It will sell itself! ??

None is immune to that. However, this duality, of product and distribution is what causes the most trouble to startups that are trying to scale up. In fact, if you have a great product but no distribution plan, then your startup might be doomed. The reverse doesn’t seem to be the case.

How do you create the distribution for your product?

There are a few strategies to undertake.

Make distribution part of your product

A distribution channel is the set of steps it takes for a product to get in the hands of the key customer or consumer. Distribution channels can be direct or indirect. Distribution can also be physical or digital, depending on the kind of business and industry.

What many of us miss is that it takes hard work to make sales look easy.

Sometimes the sales process that works the best is the one hidden from sight. One example one is Google. the companies who win are those that can hide their monopoly. Google is the perfect example.

A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modelling, cost structure, profitability, and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

According to Peter Thiel, there is a place where you want to be regarding distribution and sales.

In fact, Peter Thiel emphasizes the importance of two critical parameters for making your business viable in the long run: CLV and CAC.?

The more you move from consumers to enterprise clients, the more you’ll need a sales force able to manage complex sales. As a rule of thumb, a more expensive product, in B2B or Enterprise, will require an organizational structure around sales. An inexpensive product to be offered to consumers will leverage on marketing by balancing CLV and CAC.

Start small and take advantage of the network effect if persists.

Distribution isn’t linear; it follows a power law!

We don’t live in a normal world; we live under a power law.?

Many of us look for that sales number to grow consistently. we start to experiment in too many ways to make a buck. However, little growth can be deadly. In fact, as Peter Thiel points out finding your distribution channel might be way more powerful than trying many that work relatively.

Distribution, like many things in our world, follows a power law. When you found the distribution model that works for you stick with it until exponential growth starts to pick up!

Watch Peter Thiel talking on Going from Zero to One :

Few points/quotes to reflect from the Book :?        

1. “What important truth do very few people agree with you on?”
2. A good answer takes the following form: “Most people believe in x, but the truth is the opposite of x.”
3. "Positively defined, a startup is the largest group of people you can convince of a plan to build a different future."
4. It is better to risk boldness than triviality.
5. ?A bad plan is better than no plan.
6. Competitive markets destroy profits.
7. Sales matter just as much as the product.”
8. “Even though sales are everywhere, most people underrate its importance.”
9. "Sales is the opposite: an orchestrated campaign to change surface appearances without changing the underlying reality.”
10. "Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true.”
11. "Most businesses get zero distribution channels to work: poor sales rather than bad product is the most common cause of failure. If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.”
12. "The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.”
13. “If humans and computers together could achieve dramatically better results than either could attain alone, what other valuable businesses could be built on this core principle?”

#businessdesign #sales #networkeffects #growthmindset #distribution #productivity #designthinking