What Do Veeva, Zapier, and Palantir Have in Common?
Distribution Innovation in b2b Software
In this highly competitive market for technology, distribution requires more creativity than ever. Thanks to the last decade’s bull market in SaaS funding, there are more funded SaaS startups than ever. All are thirsty for growth and have access to best practices in go-to-market strategy & tactics.
But when everyone shares the same playbook, it can’t provide a true “edge” over competitors. To build an iconic company, SaaS startups must innovate on distribution.
While there’s no easy formula to find creative genius in distribution, history can be a wonderful source of inspiration. Here are a few of the all-time most innovative distribution strategies in SaaS:
Veeva’s Partner-Led Model:
Distribution Innovation: being one of the first startups to go “all-in” on Salesforce.com’s AppExchange platform in 2007. This was a time when many experts were still skeptical of the SaaS model, when CRM was considered a saturated category, and when there were zero case studies of SaaS startups built on the AppExchange.
Outcome: over the course of just 6 years, Veeva raised only $7m on its way to IPO’ing at a $4b+ valuation - arguably the best SaaS outcome ever.
Takeaways: partner- or channel-led GTM can work, but it requires being “all-in” from the start; being very early to a new distribution channel can pay off massively.
Zapier’s SEO Model
Distribution Innovation: Zapier realized early on that users wanted specific integrations, not an integration product per se. This lent itself perfectly to a long-tail SEO strategy targeting the vast landscape of searches for various integration pairings such as "gmail google sheet integration." Zapier’s strategy was particularly remarkable because at its start in 2011, SEO was decidedly unpopular among b2b startup marketers.
Outcome: fueled by their SEO growth engine, in March of 2021 Zapier reached $140m ARR and $5b valuation after raising only $1.4m.
Takeaways: SEO often involves deferred gratification, but it can deliver enormous rewards; SEO can also drive improvement in product execution by its focus on user needs or “jobs-to-be-done” as manifested in search engine keyword behavior.
Palantir’s CEO-led model
Distribution Innovation: Over Palantir’s first 13 years, it had no sales people and paid zero sales commissions. However, it did have one of the most charismatic CEOs on the planet. Their primary GTM motion was CEO-led.
Outcome: Palantir achieved decacorn status in 2015; its “no sales people” approach fueled its technology-centric culture, which helped it to build one of the most formidable engineering teams in Silicon Valley.
Takeaways: leveraging a founding team’s strengths can manifest in many different ways; contrarian strategies can fuel a highly cohesive culture.
Overall, all of these innovators developed distribution strategies that veered dramatically from the norm. While it’s very useful to know consensus best practices, for the most ambitious companies they should serve as a jumping-off point - not a constraint on creativity.