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Destination Vs. Distribution: Why your Product should be where your users are!

User acquisition is a prerequisite to startup success. Startups often see user acquisition as an act of sourcing traffic to a destination and converting traffic to users.

Almost every web business has a destination: a website, an app etc. The destination is often seen as the product in its entirety. Talk to a startup about their product and they will often think of it as a website or an app that the user goes to.

However, the destination is just one manifestation of the product.

DESTINATION VS. DISTRIBUTION

An internet service can be delivered to users in two broad ways. It’s often important to think through both the routes to figure out how your user will best interact with your service. The two modes are characterized as follows:

Destination: How do the users get to where the product is?

Distribution: How does the product get to where the users are?

Any service can be delivered as a combination of these two.

DESTINATIONS

What are they? 

Destinations are the online address of the product that users remember and visit.

Manifestations?

Most common forms of destinations are websites, mobile apps and downloaded software (that syncs with the cloud).

Important because…

This is the go-to place for users to interact with the product. Whenever you think of Facebook, you have a site or an app to go to to use the product.

But…

  • Destinations are not always available in the context of the users. For example, Flickr is a great photo hosting service but it wasn’t available at the point of photo capture for a long time. A user had to click a picture and then undertake another series of actions to upload the picture on to Flickr.com. In contrast, Instagram’s service could be accessed right at the time of photo capture.
  • Destinations, by definition, require users to come to where the product is and this brings with it the challenge of user acquisition.

DISTRIBUTION

What are they? 

Distribution delivers product functionalities in the context of the user making it easy for the user to interact with the product.

Manifestations?

Most common forms of distribution include widgets (Yelp), code embeds (Quora, YouTube), API provisioning , browser extensions as well as apps (especially apps that deliver you a feed from a product, for consumption).

Important because…

  • The product is available where the users are. Hence, it helps direct traffic back to the destination. Yelp used widgets very effectively to gain users by allowing users to showcase widgets on their blog. YouTube gained traction by allowing users to embed videos on their MySpace profile and directing traffic back to the destination. Flickr, similarly, gained traction by allowing users to embed pictures in their blog posts.
  • The product is available in the context of the user. This is especially true in the case of ‘curation as creation’ tools like ScoopIt. ScoopIt allows anyone to create a magazine by combining a set of links. The creator can either create the magazine by visiting the ScoopIt destination and manually adding all the links to the magazine or she can install a browser extension that plucks the web page she is visiting and adds it to the magazine. In the second case, the user never needs to leave her context to use the product. Evernote uses a similar extension. Social sharing buttons work on a similar dynamic and allow the user to share content without having to visit the actual social media destination.
  • Distribution helps engage the user and encourage repeat visits. Email updates have been used since the early days of the web to bring back users to the destination. In recent times, this tactic worked especially well for Groupon.

But…

More often than not, distribution is limited to certain functionalities. A news feed delivered to the user or a browser extension to capture a web page exhibit only a slice of the functionality that the product offers. However, that is the exact slice of functionality that is needed in the context of the user.

THE OVERLAP

Ultimately, destination and distribution are determined not by their physical manifestations (although that helps understand the difference) but by the use case.

Destination requires the user to move into the context of the product. Distribution enables the user to use the product in his active context.

While the two are different, there is an overlap between the two as well. For example, the Instagram app acts as a destination in consumption mode where a user can view photos and participate in discussions but it also fits into the context of the user (using the phone as a camera) in production mode. An offline downloaded software (e.g. Dropbox, Evernote)  that syncs with the cloud serves as a destination (user specifically opens a software and uses the product within that context) as well as distribution (the native context of the product is geared towards online usage but the offline piece fits into the user context who might not have access to the internet at that point.

As shown by these examples, the manifestations overlap but the use cases are different. Hence, it is important to think through possible use cases and identify usage contexts where a destination makes more sense than distribution or vice versa.

In summary, when planning an internet product, it is important to consider the mix of Distribution and Destination that it requires:

  1. List out the use cases. How will the user use it in production mode? How will she use it in consumption mode? It helps to separate the production and consumption modes because user contexts are very different in the two modes.
  2. Are any of the use cases best satisfied in the existing context of the user?
  3. For every action, are you making the user do extra work by coming to a destination?
  4. Can Distribution direct traffic to Destination?

Often, distribution can be the difference between a product that is convenient and engaging and a product that is difficult to use.

How have you split your product across distribution and destination? If you haven’t do you feel some distribution touch points could help improve product usage?

The post first appeared on platformed.info
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NASSCOM Product Conclave 2012 Reflects the Arrival of a Vibrant Product Ecosystem in India

The kind of conversations that you heard around product companies are changing. From an ambitious “billion dollar companies” born out of India (the overarching goal of NASSCOM Product Conclave last year), the focus is shifting to the bold prediction of product software’s robust growth, in the coming decade and half, eliminating poverty. In his opening remarks, Sharad Sharma, NASSCOM Product Chair (who I hear across the board is an inspiration to the whole community of product guys) called product entrepreneurs by labels as aggressive as “arms merchants” and “disruptors.” He went on to make a bold prediction: “product industry will lift India out of poverty.” He sought to portray Cloud as instrumental in product space becoming an affordable, productive, and collaborative space that would transform public health centres and schools in India.

Reflecting the evolution of NPC, Som Mittal, President of NASSCOM, said that NPC is a great platform to compete and collaborate. He also revealed that NASSCOM is entering into an MoU with SIDBI to provide risk capital to small companies, which would include IP-led product companies. (SIDBI was provided a fund of Rs. 500 crores in the Union budget for investing in SMBs.) He saw angels, investors, and incubators becoming active in the product ecosystem. Mr. Mittal’s statement that CIOs were open to buying from startups should give product entrepreneurs a sweet ring in the ear.
M.R. Rangasami, co-host of NPC 2012, saw three phases of evolution of the product industry in India: mimicking US to get funding initially, growth of enterprise software in the next decade, followed mobile and Cloud computing causing a paradigm shift in this decade. He was optimistic that software products offered at low price points offered by product entrepreneurs (leveraging the Cloud) will be consumed by thousands of customers.
Naveen Tiwari’s Leap of Faith

In a sort of answer to the overarching question of a billion dollar business emerging from India (the same time around last year when Flipkart was rumoured to have obtained a billion dollar valuation), InMobi, a mobile advertising ecosystem player, has emerged as perhaps the biggest company to grow out of India in the last 5 years. Naveen Tiwari’s keynote should be remembered for something alien to product entrepreneurs in India: talking numbers that are in the million and billion range—a trillion ads providing $2 billion worth of economic transactions, reaching 80 million people across 165 countries. The mercurial growth of InMobi has been made possible by the “Think Big” approach of the team and not being complacent with the present status. The company is devising methods to grow five to ten times in the 5 years from now. Naveen Tiwari said that massive scale happens with huge risks and the InMobi team was willing to bet on it. Aiming big, going global, and hiring the best are the three mantras Naveen Tiwari proposed to build a similar company in India.

Ram Shriram’s Bet on Mobile and Tim Parsey’s REM
The man with the Midas touch could not touch down at Bangalore as personal commitment stayed him put in the United States. Ram Shriram of Sherpalo Ventures who delivered the keynote on video sought to paint a glorious future for mobile phone-based innovations going by the sheer number of them. (An exclusive coverage will be done on his address.)

As M. Rangsami announced the TED-like speech of Tim Parsey of Yahoo!, who has changed seven domains and as many companies, it brought a fresh whiff of outside air. Instead of thinking inside, this change of thinking by organizers to bring in someone with a different perspective seemed to have carried well. Tim Parsey gave an absorbing, exuberant keynote on design being important for products. Using the bicycle as an example of his REM framework, he translated the evolution of bicycle to products within the REM framework. Rational value, Emotional, and Meaningful are important components of the design, in Tim Parsey’s philosophy. A rational value in terms of performance and new capabilities, designing for feeling, classic minimalist, and ultraminimalist (appealing emotionally) styles, and being meaningful (aligning to values and evoking personal memories) make a product appealing to the customer. The design principles and design culture should be enticing for the employees as well as end customers for whom the product is aimed at, he emphasized.

So many of them, which one to go?—Indian SMB market too small
End of keynotes opened up to six parallel sessions and thankfully one was cancelled. The sheer excitement of peeping into several sessions would have satiated the delegate but wouldn’t have had a carry on their learning. Color codes in the Agenda clearly showed the prospective audience base for the sessions. If I would have made a point of covering them all, I would have left the readers disappointed with piecemeal quotes that wouldn’t serve purpose. I stayed on with one session per slot. In a curiosity to understand the Indian market, I walked in with a lot of hope of three wise men telling us how Indian market so big as an ocean could be tamed with a magic wand. In the end, despite “doom and gloom” sought to be avoided, Indian market despite millions of potential customers turns to be less attractive for a product entrepreneur if segments are suitably sliced. Pari Natarajan of Zinnov showed the microcluster of leather SMEs finally boiling down to 2000 users. Terming product business in India for SMBs non-VC fundable (implying lack of scale), Pari however said e-commerce is a robust segment. Naru Narayanan, investor, mentor, and former executive selling retail products across India, cautioned the lure of big numbers. He sought to convey that any big number showcased should be treated with caution and provided his guestimate method of arriving at a rational figure. Vijay Anand put the conversation in perspective by bringing down the glorious 900 million mobile users to an active 300 million (multiple SIMs being the discounting factor). Despite the promise of the billion plus, Indian market is yet to become technophilic. Technology touches a niche and not yet mainstream.

This led me to a conversation with Kishore Mandyam of PK4 Software, who led a panel on AWSME Survey, the Nielsen survey commissioned by NASSCOM to look into the SMB market in India. This is an awareness survey by NASSCOM to understand what ails the SMBs in terms of buying software. In over a 1000 SMBs surveyed, it was known that only 30% of SMB owners were approached by a software provider and for example in Kochi, 86% of SMBs were not approached. Out of them, only 9% know the term Cloud computing. To make SMBs adopt technology massively, NASSCOM mandated this survey to drive its Software Laga Do Yaar! Mission. The survey will be used to further enhance the market penetration of software by understanding pain points, influencers, and decision makers by a follow-up engagement perhaps by using case studies to influence buying decisions.

Pivoting is painful is what I got to understand in the panel discussion on pivoting. Naveen Tiwari, Ashish Kashyap of Ibibo, Rajat Agarwalla of RJ Softwares were engaged in a panel led by Shruthi Chella of Groupon. Instituting pivot as part of culture is next to impossible. Pivoting in a small company is easier whereas in a big company, it is first tested within a small group before massive adoption. Customer needs, market opportunities, and competitive advantage drive pivoting. Ashish called pivoting as “changing punctured tyre of a car in motion.”

As the afternoon set in and more sessions awaited, the delegates swarmed the lunch area exchanging contact details and engaged in conversations.

Contributed by K. Venkatesh, VirtualPaper for YourStory.in