Distribution Before Products

A framework for building businesses by first creating distribution (audience) and then launching products for that audience, rather than the traditional approach of building products first.

Core Philosophy

• Traditional approach: Build product first, then find customers
• New approach: Build audience first, then create products
• Distribution and capital are key competitive advantages
• Having an audience allows you to build what customers already want

Building Distribution

• Focus on creating content across multiple platforms:
  • Podcast (25M downloads/year)
  • YouTube (500k subscribers)
  • Email list
  • Twitter following
• Content initially optimized for:
  1. Personal learning
  2. Deal flow generation
  • Finally evolved into viewing content as actual businesses

Monetization Strategy

• Moved away from traditional advertising model
  • Turned off all ads despite being one of best-monetized podcasts
  • Reasoning: Don't want to rent reputation to others, especially in finance
• New approach: Own the products/services you promote
  • Better economics: Instead of getting $1 for reading an ad, make $3-5 on backend
  • More control over quality and customer experience
  • Requires weathering short-term revenue loss for long-term gain

Business Building Framework

• Key ingredients for success:
  1. Capital
  2. Distribution
  3. Decent idea
  4. Strong operator
• Focus on profitable, sustainable businesses
  • Example: $50-100k investment can build $1M revenue business
  • Potential for $500-700k annual profit
  • Higher probability of success than pure angel investing

Team Structure

• Find "killer operators" to run individual businesses
• Create upside through revenue/profit sharing
• Let operators focus on their expertise while providing distribution support
• Look for young, energetic talent willing to try new approaches