Let me tell you a few fundamental principles to build a digital distribution for your digital business, which I’ve learned at a costly price over the years, after many trials and errors (you don’t have to).

There are seven via negativa (not to do!) principles I’ve learned:

• Don’t build a business based on product features.
• Don’t wait to have a product to build an audience.
• Don’t focus on what you can’t control.
• Don’t procrastinate on testing your assumptions.
• Don’t give up control over your pricing strategy!
• Don’t rely on an OPP as your primary distribution strategy.
• Don’t forget to tell your story.

Let me explain point by point.

This is a “Don’t Do List,” and if you avoid those mistakes, you’re on your way to building a robust digital business.

And eventually, I’ll give you also my “hedging distribution strategy” for success.

Don’t build a business based on product features

One of the most common misconceptions is that if you do have an advanced and more technological product, you win!

That’s completely off. And business history shows over and over again that often products that succeed are those that have been able to control distribution processes at the point of becoming market leaders (except a very few cases). So if you’re still holding to this belief, you might want to reconsider.

Don’t wait to have a product to build an audience

Most entrepreneurs wait the moment they launch to build an audience around a product or service. However, that is a colossal mistake and risk. A launch relies on something that needs you to be right to work out.

What if you are wrong? (as most time happens). All the effort and time in building that product and service will be wasted. Instead, you need as early as possible to build an audience, learn from it, and gather as much feedback as possible.

Don’t focus on what you can’t control

Do you have control over your strategy? If yes, focus all your attention to it. If not, give it up and focus on what you can control. This is a simple principle, yet a few can execute it.

Think when your business depends primarily upon something that is out of your control (a single large customer that can break it). It means that a single event can break it quickly. So how do you cope with it? You need to gain some level of control where you can.

Don’t procrastinate on testing your assumptions

While it might take a few hours to draw a business model, especially with business model tools, like the lean startup. It might take a few years to find a successful model. That is why you need to experiment a lot, discover and combine the building blocks and assemble them, so you have a scalable business.

The cases in which you might stumble on a successful business model, right away are very few.

Another big misconception is about monetizing your business.

Taken by the start-up frenzy, many might make up excuses such as “I’ll focus on users’ growth for the coming years.” Yet the monetizable side of a business model is among the riskiest pieces of the puzzle. Thus the sooner you start experimenting with it, the better.

Don’t give up control over your pricing strategy!

Most entrepreneurs that are starting out (especially in digital) might give up control over the pricing of their product or service, due to a lack of proper distribution. Think of the case of a store built on top of Amazon.

Or a Hotel that joins in a large platform where other hotels are showcased (like Booking).

Or an online instructor that starts out on Udemy.

While it does make sense to expand your customer base.

Those platforms are interested in pushing as much as possible transactions, without caring for the single distributor. Thus, they will push on pricing, commoditization of your product, and aggressive pricing policies to promote their business agenda.

If you didn’t take the time to build proper distribution, chances are you’ll have to follow the agenda, of the platform that has a strong distribution network. That platform will squeeze your prices (and eat your margins) and make your service a commodity until it is too late!

Don’t rely on an OPP as your primary distribution strategy

When you lose control over your distribution strategy, you also end up commoditizing your product. That happens because you need to rely on OPP (other people’s platform) for distribution, which makes your long-term strategy very vulnerable, and your positioning extremely weak.

Don’t forget to tell your story

I didn’t list this as last because it’s less important. Instead, this is one of the critical ingredients for building long-term success. People want to relate to your business story; they want to know its “why,” and its reasons for existing.

This is the distinctive nature of your digital business and what makes it unique among the others. To make sure a story isn’t just about you. It’s about your community. Indeed, a business is often the result of a real problem and discomfort you might have experiences in the first person.

I started FourWeekMBA because I had a discomfort about how the whole model of traditional business schools and higher-level education worked. That discomfort gave me the vision to build this community. It’s what drives me, and surprisingly, many people part of the community share my same pain, and they can relate to my story.

Yet, as an entrepreneur, I also offer a solution, and the is where value is created. Without a story, you might have a company that makes (momentarily) money, but do you have a long-term business model? I doubt it.

Are there shortcuts?

I wish I could tell you so. While there are some hacks, you can test along the way. Most of it is hard work combined with vision, focus, and strategy.

Building your distribution platform is hard, and it requires time. But once you’ve taken the time to do that, that is when you have a solid business, a reliable brand, and an active audience and community ready to support you in the long-run.

The digital distribution strategy

Author Nicholas Nassim Taleb proposes what he calls a barbell strategy. I like to call it a “hedging strategy” for building up a robust distribution for your business.

Let me articulate. In investing, when you make a risky investment, you want to hedge that with another that has a negative correlation or at least has the potential to cover up for the high risk you’re taking on the other hand.

In other words, the premise of this strategy is that you can take as much risk as you want if you’re properly hedged against it.

A hedging strategy for digital distribution

On the digital distribution side for me, a hedging strategy is about investing on two opposite distribution channels, that might well seem disjointed, but instead are highly related:

• SEO on the risky side.
• And email marketing on the hedging side.

Why is SEO the risky side? You don’t control that channel. If tomorrow Google comes up with an algorithm update, or it decides that suddenly your site isn’t worth it, or better yet, it determines the time is on for it to take over your niche (take the example of Google Travel) your whole distribution is in jeopardy.

That doesn’t mean SEO is not a proper distribution channel. Quite the opposite, Google is still among the best channels to grow your business quickly. However, betting on SEO alone has high potential rewards but also high intrinsic risks as you can’t and will never control Google.

So how do you hedge that?

Simple, you attract as much organic Google traffic as possible and convert that in email subscribers. Over the months, those subscribers will become your community, to which you’ll be building a long-term relationship.

Therefore, SEO will help you with:

• gaining initial traction
• Building up a brand
• Building up a community by tapping into an existing distribution channel (you don’t control)

While email marketing will serve you as:

• a hedging strategy to avoid to base your whole distribution strategy on Google’s algorithm changes.
• A way to build your community from scratch through direct conversations.
• The channel that enables you to convert non-paying subscribers in repeat customers for your business.

You do have control on your email list because you can set the pace of the conversation, decide the stories to tell and have meaningful interactions with your audience. This is critical.

We’re missing a last piece of the puzzle for a successful long-term distribution strategy.

Over time reduce the dependence from channels you don’t control

It’s fine to use SEO to build up traction for your business. Or to use a single distribution channel for that. In the end, initially, you need to be highly focused, and you can’t afford to master too many channels at once.

Thus, having all your eggs in one basket is risky, but okay. Many digital businesses have 70-80% of their distribution strategy based on SEO. Yet, over time, you need to balance the other channels. Why? You’ll have financial resources, and the competence to expand and broaden your focus.

Thus, when SEO or the other main distribution channels has become a flywheel that requires less and less of your attention. You can finally spend your effort in balancing up other channels (for instance, social media or video marketing).

But remember, if you don’t control those channels you’re broadening up, you still need to hedge them against your newsletter, or anything where you have complete control over. Never forget that!

Key takeaway

A successful digital distribution strategy is based on a set of things to avoid:

• Don’t build a business based on product features.
• Don’t wait to have a product to build an audience.
• Don’t focus on what you can’t control.
• Don’t procrastinate on testing your assumptions.
• Don’t give up control over your pricing strategy!
• Don’t rely on an OPP as your primary distribution strategy.
• Don’t forget to tell your story.

And based on my experience building up FourWeekMBA, it’s based on a hedging distribution strategy, where you put all your eggs in one basket initially, but hedge that by pushing as much as possible on building an active community via a channel you can control (like email marketing).

Read next: Distribution Channels: Types, Functions, And Examples

Business resources:

• What Is a Business Model? 30 Successful Types of Business Models You Need to Know
• The Complete Guide To Business Development
• Business Strategy: Definition, Examples, And Case Studies
• What Is a Business Model Canvas? Business Model Canvas Explained
• Blitzscaling Business Model Innovation Canvas In A Nutshell
• What Is a Value Proposition? Value Proposition Canvas Explained
• What Is a Lean Startup Canvas? Lean Startup Canvas Explained
• What Is Market Segmentation? the Ultimate Guide to Market Segmentation
• Marketing Strategy: Definition, Types, And Examples
• Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
• How To Write A Mission Statement
• What is Growth Hacking?
• Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

Case studies: 

• How Amazon Makes Money: Amazon Business Model in a Nutshell
• How Does WhatsApp Make Money? WhatsApp Business Model Explained
• How Does Google Make Money? It’s Not Just Advertising! 
• The Google of China: Baidu Business Model In A Nutshell
• How Does Twitter Make Money? Twitter Business Model In A Nutshell
• How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
• How Does Pinterest Work And Make Money? Pinterest Business Model In A Nutshell
• Fastly Enterprise Edge Computing Business Model In A Nutshell
• How Does Slack Make Money? Slack Business Model In A Nutshell
• Fastly Enterprise Edge Computing Business Model In A Nutshell
• TripAdvisor Business Model In A Nutshell
• How Does Fiverr Work And Make Money? Fiverr Business Model In A Nutshell

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