Product strategy is about focus. It decides where to invest, what to say no to, and how teams align around a clear vision. At its core, it answers two questions:
Without clarity on these pillars, even great products struggle to gain traction. Most teams dive straight into backlogs or features, but strategy should come first.
This article shows how differentiation and distribution work together to guide product decisions and help you determine whether to double down, pivot, or sunset your initiatives.
Differentiation tells you why customers should choose you over alternatives. It’s the heart of strategy, because without it, no distribution channel will save you. You need always to measure how well you are differentiating against your competitors on key industry factors: product features (unique design, quality, functionality, or technology), customer experience (service model, personalisation, ease of use, support), brand (identity, storytelling, reputation, trust, community), ecosystem (integrations, complementary products, or platforms).
To come up with differentiation you need to know not only users’ problem space well, but also to have good understanding of competitive landscape. Defining differentiation is tricky because it’s about finding the sharpest, most defensible way your offer stands out. Instead of starting with features, the right approach is to ask structured questions that uncover your product’s uniqueness. These questions can be:
As a result of defining your differentiation, you should be able to answer: What unique problem do we solve? What do we deliver better than competitors? What is hard for others to imitate? And how do we reinforce this advantage over time?
But differentiation alone isn’t enough. Even the most unique product fails if customers never discover it. That’s where distribution comes in. Distribution defines how your product reaches users — the channels, motions, and ecosystems that turn differentiation into real adoption and growth.
Distribution is how you deliver value to customers, physically or digitally. Distribution strategy is as critical as the product itself. Many startups fail not because the product is bad, but because customers never find or adopt it.
There are three primary growth motions that define how your product reaches the market: Product-Led, Partnership-Led, and Sales-Led Growth. Each works best under different conditions and determines which distribution channels make sense.
Product-Led Growth (PLG) suits SaaS and digital tools that can deliver value within the first session and require little to no onboarding. It works for simple, self-serve products rather than complex solutions where ROI emerges over time, such as BI tools. A good example is Miro, which leverages ready-made templates and built-in virality to drive adoption without a sales team.
Partnership-Led Growth (PLx) is common in enterprise SaaS, where direct distribution is expensive and customer acquisition costs (CAC) are high. Here, you scale by working through others—channel partners, integrations, and resellers—especially when your average contract value (ACV) is high enough to make collaboration worthwhile.
Sales-Led Growth (SLG) relies on human engagement: sales representatives, account managers, and customer success teams build relationships and guide buyers through complex or high-value solutions. It’s most effective for products that require education, onboarding, or integration support.
Each motion has its own natural distribution channels.
Ultimately, channel selection is a product hypothesis that must be validated. The key metric to guide these decisions is the CAC-to-LTV ratio—how efficiently you acquire and retain value from each customer segment.
Differentiation and distribution are often treated as separate decisions — what makes the product unique versus how it reaches the market. In reality, they work best when designed together. Your distribution should amplify what makes you different, not just deliver the product to customers.
A practical way to think about this blend starts with the customer experience. Map the entire journey — from how people first hear about your product, to how they purchase, use it, and eventually advocate for it. Every stage of that journey is both a differentiation opportunity and a distribution moment.
Next, design your distribution to reinforce your differentiation. The way you sell should communicate the same value your product promises. A premium product might require a high-touch, invitation-only approach. A mass-market product should feel easy to find and effortless to adopt. Ideally, product and distribution evolve together — the ecosystem around your product becomes part of its defensible advantage.
Then, test and learn. Run small experiments to see whether customers actually perceive your differentiation through the channels you use. Does your premium positioning hold up in paid search ads? Does your simplicity come through in your onboarding flow? The answers will tell you whether your distribution truly supports your strategy.
Finally, keep the alignment between differentiation and distribution explicit:
When differentiation and distribution reinforce each other, growth becomes more efficient — each marketing investment and every product improvement pull in the same direction.
Every product strategy ultimately comes down to making choices — which product differentiators to invest in, which distribution channels to optimise, and which initiatives to pause or stop. Each decision should be guided by data, market feedback, and alignment with your long-term vision.
Earlier, we explored how differentiation defines why customers choose you and distribution defines how they find you. Strategic decisions are about evaluating both: do your unique advantages reach the right audience efficiently, or is something misaligned? There are three strategic opportunities here: double down, pivot, or sunset.
Recommending a shutdown—especially one tied to lower costs—requires clarity and courage. The conversation should be led by evidence, not emotion. Look at usage trends, retention curves, and trajectory versus benchmarks. More importantly, reframe the question:
“What is the opportunity cost of keeping this alive? What else could we build with the same resources?”
A sunset isn’t failure - it’s focus. It’s the right call when revenue potential is too low, repeated tests show no sustainable demand, market dynamics have shifted unfavourably, or the product no longer fits the company’s vision. In differentiation and distribution terms, this often happens when both the product lacks uniqueness and customers cannot be reached effectively.
Recommending to double down means investing further in what’s already working. This path is clear when engagement is strong, repeat customers are growing, and early traction signals product–market fit. Favourable unit economics and a clear ROI make a strong case to deepen investment — expanding features, strengthening distribution channels, and building growth loops.
From a differentiation and distribution perspective, doubling down occurs when your product’s uniqueness is clear and your channels effectively reach your audience — the sweet spot for scaling.
A pivot doesn’t mean starting over; it means redirecting existing strengths. Pivots are appropriate when customers care about the problem but not your current solution, growth has stalled, or feedback consistently points elsewhere. Common examples include changing the target audience, reframing your value proposition, or shifting distribution and pricing.
Strategically, a pivot is often triggered when differentiation is weak despite strong distribution, or when distribution is weak despite strong differentiation. In other words, one lever is working, but the other is misaligned.
Product strategy is discipline in action. You can’t scale everything. Focus on what works, refine what shows promise, and let go of what no longer fits. Differentiation and distribution are levers — the strongest strategies amplify why customers choose you through how they find you, creating a virtuous cycle of growth.
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