One of the first things we look for in an investment opportunity is a unique insight about how to secure low-cost distribution for the idea. Absent that insight, even the most compelling software execution can languish in obscurity; if it’s present, the resulting momentum can turn a good idea into a category killer by giving it the time, information and cash needed to improve.
Securing distribution deals can be a chicken-and-egg problem for early-stage companies: until you have something to offer, it’s tough to get the attention of prospective partners; the more momentum you have as a business, the less distribution help you need. Seeking, negotiating and implementing distribution deals can also be hugely time-consuming, so early-stage teams need to choose their prospective partners with care to avoid burning scarce resources on deals that don’t create more value than they consume.
One of our portfolio companies, Cooler Planet, just served up a fresh case study on the subject. They’ve been in business for a little over a year, and have steadily built their reputation as the highest-quality matchmaker between consumers and alternative energy contractors. This week they announced a partnership with the American Solar Energy Society (ASES), owner and operator of FindSolar, the definitive online consumer resource for residential solar energy.
By bringing their proven technology and process expertise to bear for the benefit of FindSolar customers, Cooler Planet gains access to a significant new source of consumers actively seeking an alternative energy solution for their home or business (to date, over 700,000 home- and business-owners have used FindSolar to find a solar installer). For their part, ASES will now be able to maintain and advance their position as the leading online resource for solar, while completely eliminating the cost of operating and maintaining this complex and high-traffic web application from their annual budget. Like any good relationship it will take time and effort to put this deal into effect, but the anticipated benefits are real, tangible and will create lasting value for both parties.