2 minute read / May 12, 2023 /
Seeking a Distribution Advantage with AI
Great companies transform a technology innovation into a go-to-market advantage.
In the last five major cycles (internet, social, mobile, cloud, web3), startups seized the new technologies of the era to create a distribution advantage.
Google led to search-engine optimization, which startups like Expedia & Zillow grew to become public companies. Mastering social distribution (sheep-throwing in the early days) on MySpace & Facebook’s propelled YouTube & Zynga, not to mention the social networks themselves.
The iTunes store launch in 2008 enabled Uber. Salesforce catalyzed cloud-delivery & annual subscription model in the enterprise, upending decades of selling software with perpetual licenses.
What is the distribution advantage AI confers to startups? There are a few emerging possibilities :
OpenAI plug-in architecture enables companies to build products integrated into a new search & discovery experience. With millions of users to address, a novel plug-in experience could catapult a startup.
Novel content creation techniques used the right way might enable a new form of inbound lead acquisition. AI enables ABM-at-scale. Perhaps, we’ll see the fusion of inbound-marketing & account-based marketing (ABM) in which marketers build bespoke collateral for identified accounts but do this for thousands of prospects rather than the tens or hundreds today.
New user experiences re-imagine the way users try products. The first time a user visits a site AI asks “What do you want to accomplish today?” & then dynamically provisions & configures software to convince a prospect to purchase. I bet that experience would boost the average 4% unassisted conversion rate of freemium software.
Open-source interest has worked phenomenally well for many infrastructure projects. In the past, reaching 1-2k stars (likes for a Github code repository), has taken some startups a few months, but many AI projects have reached tens-of-thousands of stars in a few weeks.
The teams who unlock novel distribution advantages first will have a tremendous competitive advantage in the AI wave.