Why distribution is the new moat for early-stage startups
- BADideas.fund
- Jul 20
- 7 min read
Building a product is nearly free now - so distribution is the new moat. Our manifesto, in Ben Leblois' words, backed by seven founders and operators who've lived it. Tell us where you land.
I'm Jurģis - community & brand lead at BADideas.fund and host of the Bad Advice podcast. Most issues dig into one go-to-market problem from the show and hand you a free tool to fix it. This one's different: no guest chair, no tool - it's what we actually believe, and an invitation to argue with it.
The short version, for the people in a hurry. Everyone thinks building a company got easier - cheaper to build, cheaper to ship, no gatekeepers. It got easier to start and harder to win. When anyone can build your product in a weekend, building stops being the moat. Two things are left: a real, non-consensus conviction, and distribution - getting it in front of the right people fast enough to matter. That's why, now more than ever, distribution is the new moat. Below, Ben Leblois lays out the whole argument, each piece backed by a founder or operator who said the same thing on Bad Advice - and next to each one, a poll, because we'd rather hear where you disagree.
Although I didn't have my camera with me, I sat down with Ben last week - one of the people who's been shaping what this fund actually stands for - and got him to say the quiet part out loud. Here's what stuck, point by point.
It got easier to start, and harder to win
Ben's opening line is a splash of cold water. Everyone treats cheap tools as good news. He thinks that's exactly backwards for anyone trying to build something that lasts.
"Everyone thinks it got easier. Cheaper to build, cheaper to ship, no gatekeepers left - so it must be easier to make money, right? Maybe. At the margins. But to build something that lasts, that wins a market, that defines a category? That's harder now than it has ever been. And if you don't feel that in your gut, you're already on a path I can't join you on."
It's the same thing Madara Kņūtiņa told me on Bad Advice. The glossy startup story is a lie of omission - and the grind isn't a bug, it's the whole point: "Startups may look cool from the outside. They are gruesome on the inside - and that is the point, in the sense that it is that pain and overcoming challenges that drives satisfaction and drives the success and drives the team forward."
It has gotten easier to start a company, but harder to build one that wins. Where do you land?
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
The first thing that's left: a non-consensus conviction
If building no longer sets you apart, Ben says only two things do. The first is what you believe that nobody else does yet.
"What do you believe that others laugh out of the room as too outlandish, too far in the future? Bolting a 1% twist onto the obvious wins you nothing. Push deeper - find something you truly believe is worth doing. And for the love of god, don't outsource that insight to an LLM. We're all thinking with the same machine now. Ask it what to build and it hands you the median. The average is free - and worthless."
That's literally what we mean by bad ideas: not reckless, non-consensus. Roberts Bernāns lived the whole arc - Nordigen was laughed out of the room before GoCardless bought it: "Most people said our idea was bad - and who in their right mind would make such a business? In our earlier speeches in front of investors, we were often at the bottom."
The strongest startups are built on a belief most people think is wrong. What do you think?
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
Everything else is secondary - by orders of magnitude
Once you have the conviction, Ben's rule is brutal about focus: the two things that matter get everything, and the rest - the decks, the logos, the vanity - gets almost nothing.
"Everything else - genuinely everything else - is secondary, by orders of magnitude. Find the thing you actually believe, the thing you have to do, and run at it with everything you've got."
Kristaps Krafte put the same discipline in founder terms: chase the business, not the theatre around it: "Entrepreneurs, focus on bringing in the cash. Focus on the cash flow. Don't focus on making the most perfect pitch deck, on being in the best relationships with the investor. Although that's important - really focus on your business."
Founders waste too much energy on pitch polish and not enough on the actual business.
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
The second thing that's left: distribution is the new moat
Here's the hinge of the whole manifesto. When the product can be copied in a weekend, the thing that decides who wins is who reaches the market first and best. Ben doesn't hedge it.
"Distribution. How fast can you move? Can your growth create a sense of inevitability - with customers, investors, partners, talent? In a world where someone can take you by storm overnight, you're running for your life every day."
Suhas Ghante agrees: "It's become so easy to start a company, to vibe code. So what sets you apart? Number one, storytelling. But number two, it's distribution... distribution, I would argue these days, is more important than product."
The hardest part of your startup isn't building the product - it's getting anyone to notice it.
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
Building isn't the win - getting noticed is
The trap Ben keeps seeing is founders who mistake a finished product for a finished job.
"That's where most great companies quietly die. The product is right, the belief is right, and it never reaches the market fast enough to matter. In a world this noisy, that gap kills more good companies than bad ideas ever will."
Jēkabs Endziņš has been shouting this one for years: "I need to get a tattoo on my forehead: distribution-first mindset. Thanks to AI, building something is very easy. Right now the world is full of beautiful and unique products that no one knows about. Young founders should not think 'how do I build?' but 'how do I get noticed?'"
Distribution is now more important than product. Where do you stand?
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
Speed is the moat inside the moat
Distribution isn't just reach - it's velocity. Ben's framing is that speed used to matter; now it's existential, because you're not outrunning ten competitors, you're outrunning a thousand.
"Speed has always mattered in startups. But outrunning a thousand people is a whole different sport from outrunning ten."
Egija Gailuma, who's raced the same clock building OX Drive, put it in one line: "We have to have speed. The one who will be the first to break through is still going to be the winner."
Being first to break through matters more than being best.
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
The generational companies are being built right now
Ben's closing bet is a timing argument. Every cycle mints its defining companies at the very start - and we're at the very start of the AI one. Incrementalism is a late-cycle move. Which means the founders who run hardest now, with the hungriest teams, get the once-a-decade opening.
"We're at the very beginning of the AI cycle. The incremental companies aren't the ones being built right now - the amazing ones are. You need one thing you actually believe and the stubbornness to run at it harder than anyone alive."
Lauris Rutkis found the same thing building Swotzi - raw, hungry, all-in beats seasoned and comfortable when the clock is the enemy: "Young people straight out of university with the right mindset would outwork the experienced ones. In early stage, when time is so valuable, outworking others is everything."
At the start of a cycle, hunger and speed beat experience.
1 – Strongly disagree
2 – Somewhat disagree
3 – Neither agree nor disagree
4 – Somewhat agree
Why we exist - and who throws everything at the distribution half
The judgment is the founder's half - the conviction, the read on the market, the thing you have to build. We can't manufacture that, and we don't try. It's why we back you. Distribution is the other scarce thing, and it's the half we go all-in on with you: a bench of GTM operators who are winning right now, matched to your motion, plus the system that closes the gap between their advice and your execution - so world-class distribution help lands in days, not quarters. A few of the operators in the room with you:
Danny Leonard — SMB Outbound Sales
Top rep of 1,000+ at Groupon (2010 Salesperson of the Year); Square's first sales hire (architected a 200+ person, $5B GPV org); grew OrderAhead 1,300%+; co-founded Ramped (acquired by Teal); 7-year Sales EIR at 500 Startups; now Sales Operating Partner at Maschmeyer Group Ventures.
Ruslan Nazarenko — Marketplace & PLG Growth
Head of Growth at Scale AI; founding growth member at Vimeo (4x users, 3x revenue); growth at Bird ($2.5B, Sequoia-backed); took Braid 0→$1M monthly while cutting CAC from $200 to $40; top-5 Reforge contributor; now founder of Lumos AI and Labela.
Greg Volm — Enterprise Outbound Sales
20+ years across 8 venture/PE-backed companies; top AE at Salesforce, built Zendesk's first SMB→Enterprise teams through IPO; VP Sales NA at Xero, SVP Global Sales at Prezi (100M+ users), EVP Sales at Envoy; built the GTM team at Aircover.ai that sold the first enterprise AI deals to Fortune 500s; now VP Business Development at Harbor Compliance.
Mario Araujo — Product-Led Growth
Led company-wide PLG transformation at OutSystems ($10B+ platform), 0→multi-million self-service revenue in under 2 years, growth team 1→100+; 3x'd ARR at Softr in a year; built Penpot's monetization from zero; now Head of PLG at Flosum; advises Google, Mozilla, Boomi through ProductLed.
Frequently asked questions
What does "distribution is the new moat" mean?
It means that now that building a product is cheap and fast, the product itself is no longer scarce or defensible - anyone can rebuild it. What's scarce is reaching the right customers first and building momentum competitors can't match. That reach and speed - distribution - is the new moat.
If building is nearly free, does the idea still matter?
Yes, more than ever - but only a non-consensus one. Free tools hand everyone the same average output. The edge is a conviction others dismiss, which tells you what to build and who for. Distribution then decides whether the world hears it in time.
What does BADideas mean by "bad ideas"?
Non-consensus ideas, not reckless ones - the bets that sound wrong right up until they're obviously right. We back founders with one real conviction and the stubbornness to run at it harder than anyone alive.
Who does BADideas back?
Founders building with small teams and betting they'll win on distribution, not on being the only ones who could build the thing. That belief - not stage or sector - is the filter.
How does BADideas actually help with distribution?
We pair founders with a bench of GTM operators winning right now - enterprise and SMB sales, PLG, marketplace growth - matched to your motion, so world-class distribution help lands in days, not quarters.
Work with BADideas.fund
We're an early-stage B2B fund across CEE and the Nordics, and everyone here has built companies before - the fund we wished we'd had. We back founders whose drive borders on unreasonable and go all-in on the distribution half of the game: the go-to-market drift that quietly kills startups between rounds, caught while there's still room to correct.
If you're building with a small team and betting on distribution, and you'd rather have operators who've walked your exact walk in the room with you:
