Effective distribution is often overlooked by entrepreneurs, leading to misguided strategies. Instead of relying on preconceived notions about sales channels, entrepreneurs should tailor their approach based on the product and target market. The equation f(p,t) = c highlights that the channel is a function of the product and target market, emphasizing the need for a customized approach.

Products are categorized based on delivery and assistance requirements. Understanding the target market’s decision-making process is crucial. Individual and small group targets often rely on marketing, viral distribution, and telesales. Targets involving entire companies or large groups necessitate human interaction. The complexity of the decision-making process determines the sales strategy, making it important to align the channel design with the customer’s needs.

Real-world examples, such as Dropbox and Box, demonstrate the importance of matching the product and target with an appropriate distribution strategy. Dropbox’s success with individual and small group targets illustrates the efficacy of marketing and viral distribution. Box’s achievement in reaching larger enterprises through a direct sales force demonstrates the necessity of human interaction. Each channel profile suggests a unique sales force profile, emphasizing the need for a well-aligned distribution strategy.

The overall message is that designing an effective distribution model requires a deep understanding of the product, target market, and their interplay. Entrepreneurs should focus on creating a distribution strategy that integrates with the product and resonates with the target audience. This customer-centric approach is key to building a successful company.