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The Distribution Hacker’s Mission: Create an Unfair Advantage

distribution hackerMore than any particular skill, like how to run an Adwords campaign or write a blog post, software developers struggle to accept distribution hacking as part of their professional repertoire because they find a simple fact, and its corollary, intellectually abhorrent:

Markets are not efficient or “fair” because people participating in the market are not rational actors.

Accepting and internalizing these two facts is particularly challenging for developers because they are used to performing their work with a machine that is supremely efficient and fair, while surrounded by people who are some of the most rational in the world.

Distribution hackers, on the other hand, disregard the reality of this statement at their own peril. Distribution hacking is about understanding and accepting the conditions of reality, and then creating systematic unfair advantages that leverage asymmetry in markets for the company’s benefit.

Creating Unfair Advantage

Startups need to use unconventional and “hacky” tactics for achieving distribution of their products because the conventional ones are crowded channels being executed on by companies with 100s of times more money, time, and manpower. SEO, SEM, display advertising, PR, even social media are channels any marketing person worth their salt can execute on.

If you hire a marketer and tell them to execute “by the book” you will get average results. For startups, average is usually failure. Forget about the list of tactics you put in your job description – the distribution hacker is not a marketing monkey and they crave just as much freedom to act an experiment as any software engineer. You’re going to have to give them some room to operate if you want to get the best results.

With great freedom comes great responsibility to deliver results.

The Birth of a Distribution Hacker

As the titles “growth hacker” and “distribution hacker” grow in popularity there will be people who recast their “social media” or “advertising” careers in this light. While I think these folks are well positioned to become distribution hackers they are generally focused on executing a particular channel, and often I find they are not nearly rigorous enough with their experimentation and metrics.

There is a very real risk that startups hungry for customer acquisition will bring a self-styled “growth hacker” on board and then find themselves disappointed after a few months without results. It is so important to talk to your potential hire about how they imagine creating an unfair advantage for your company. They might not have a detailed plan, but you should look for strong signs that they can think outside the box. If someone claims to be a growth or distribution hacker as them to give you specific examples of how they’ve successfully hacked the system in the past, and demand numbers.

For a distribution hacker, speaking in terms of hypotheses and metrics is second nature because they live in their spreadsheets and mySQL queries day in and day out. If you’re hiring someone who is just getting started with distribution hacking you can usually figure out how creative and analytical they are by leading a brainstorm around tactics and metrics. I think there is a much broader market for bringing someone on board to learn distribution hacking than there is to hire someone who is experienced. Please send them to this blog.

Distribution Hacking as a Mindset

One of my former employees at Twilio, John Sheehan, once quipped “they can copy our hands but not our hearts” upon observing the rate at which Twilio’s developer marketing tactics were being copied by other startups and telecom companies with developer programs.

Don’t get me wrong, I’m all for copying tactics that you see working for someone else, especially when they address the same audience you are trying to reach. When I went to meet with these companies about marketing strategy I found that the imitation of our tactics at Twilio were surface level. Companies who are more interested in the appearance of distribution hacking than the results are playing a dangerous game of “success theater” by going through the motions, without understanding why these tactics were chosen or how to measure if they were working or not.

Quite often we heard the decision to execute on the tactic was driven by board members of a company pointing out “it worked for Twilio”. They were completely focused on the what and how, with little insight into the why of the strategy, since they didn’t have access to our internal tools or processes. We met with many of these teams to help them out, and I encourage you to always remember that no matter how well something appears to be working for someone else you should always keep your own metrics and trust your own results above all else.

Distribution Hackers: Your Job Description

The distribution hackers job is to conduct hundreds of experiments and objectively quantify the results to discover unfair advantages, and exploit them. The ultimate goal is to build systems and processes that create a long-term competitive advantage for your company that will last long after you are gone.

It starts with you, but over time you will build a team to scale your processes as you make more discoveries and layer in more tactics. By the time I left Twilio, I had hired dozens of people who worked for me or on other teams to execute on the distribution hacks we had turned into business processes.

Distribution Hacking is a Methodology, Not a Tactic

This blog might be more popular if I listed a roadmap of unconventional tactics to try. While I will explore specific tactics I’ve used with analysis around their performance, the reality is that there is no quick fix for figuring out how you can get attract, convert, retain, and monetize customers. At the request of many readers I will be digging deep into various vertical markets, business models (B2B, B2C, B2B2C, C2C) and demographics.

Distribution hacking is about more than executing a collection of tactics. It is a methodology of experimentation designed to discover and exploit opportunities gain results and own a new channel. There are plenty of shortcuts you can try to get short term results, and I think its important to have those in your toolbox, too. For an example of that, check out my post Go Ahead, Feed the Trolls about gaming Hacker News votes by engaging with negative commenters.

While these tactics are great for a quick hit of traffic, ultimately distribution hacking is about thinking and acting for the long term by re-imagining your company’s entire approach to product distribution.

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© Mattermark 2024. Sources: Mattermark Research, Crunchbase, AngelList.