(this is a cross post from Ariel Diaz’s blog The Ambitious Life)

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The Product-Distribution Framework

Given that the product vs distribution debate is not just an either or, I wanted to create a framework to help me think and evaluate the tradeoffs of each, and take into account the strength of each. So I created a simple 2×2 matrix comparing weak and strong product vs weak and strong distribution, using a fun theme of plants to characterize the various types of companies (trust me, it’s much safer for work than the initial images).

The Oak Trees – Great distribution and product feed on each other to build great companies

At the top right are the truly great companies, that have created solid products and achieve successful distribution to reach enough people. These great companies are household names, including Facebook, Apple, and Google. There are various paths to get there, but most of these companies have a fanatical devotion to creating a solid product, coupled with a very smart, disciplined, and powerful distribution. Throughout the growth, these two strengths continually feed on each other creating a positive feedback loop.

Example: Apple in 2010 – Apple is firing on all cylinders, led by Steve Jobs’ literally maniacal focus on creating a perfect product. But it’s easy to forget how strong the Apple marketing engine is, creating hundreds of millions of dollars of free publicity with every product launch. They have also created one of the world’s strongest brands, and use their huge profit margins to build a wildly successful retail distribution channel.

Example: Google – Google is the undisputed search leader with about 70% of the market (and holding strong). Early on they built a fundamentally superior search product, perfected it through continual execution and improvement, and leveraged the strength of the product to grow distribution. Now the two build on each other, with their market share in search enabling them to continue to improve their product through more data and more servers, and that continually improving product keeps people coming back to use their search engine.

The Weeds – Potentially profitable by eventually doomed

At the top left are companies that have created great distribution despite a weak product. Contrary to conventional wisdom, these companies can be very profitable despite the weak product because of various channels to reach customers and user habits.

Example: MySpace – MySpace leveraged huge email lists to spam users and build a large social network. They grew quickly and sold for $580 million, but continual lack of execution on the product led to their downfall and imminent irrelevance.

Example: Microsoft – A monopoly is about as strong a distribution strategy you can have, but even that is not enough to sustain a company that continues to make inferior products. Despite being wildly profitable, their stock has gone nowhere in 10 years, and their lack of product execution has put them in weak positions in the next computing wave (mobile and tablet).

Example: American auto makers – The analogy even applies outside consumer technology, as evident by the downfall of the American automotive industry, which for too long relied on patriotism, customer loyalty, and a saturated dealer network to distribute an inferior product. Eventually it caught up with them, and now even though they are building better products, decades of perception still linger with consumers and they face an uphill battle.

The Desert Flowers – Potentially great but need some breaks

At the bottom right are companies that have created a truly interesting and innovative product, but have struggled to get it out to the people that care about it. Many companies founded by techies have a strong risk to go down this path, continuing to focus on building the perfect product and not spending enough time getting it out there. And make no mistake, Facebook was not one of these companies in the early days, aggressively crawling online groups to get initial profile pictures and emailing whomever they could.

Example: original Mac-only iPod – Given the rapid success of the iPod franchise, it’s easy to forget that it originally launched exclusively for the Mac as a way to drive Mac sales, and took almost 2 years to sell 1 millions units (vs. 74 days for the original iPad, 28 days for the iPad, and about 1 day for the iPhone 4). It was only when they began offering a PC version and leveraging their iTunes distribution platform that sales began really accelerating.

The Tumbleweeds – Also Rans – Lots of challenges, but could work in certain offline niches

In the lower left quadrant are the companies that don’t have a particular strength in either product or distribution, and are thus left facing many challenges. In certain commodity local businesses with limited competition, this may not be an issue (for example the only dry-cleaner in a neighborhood), but for online businesses this can be a killer.

Examples: Most clones that lack distribution – Clones often try and replicate a successful product but lack many of the soft traits and methodologies that made those products successful in the first place, and thus often create weak imitations. If those are coupled with distribution advantages, they can be profitable, but often they are mired in the bottom left quadrant to hang on and pray.

What this means on a practical level

Coming back to Antonio’s question from that dinner, if I had a choice of having either great distribution or great product, I would choose great distribution, turn that into profitability, and leverage that to build a great product. Practically speaking, however, those choices are rarely presented. Therefore, when starting a new company, the important point is to clearly understand the tradeoffs as well as the strengths of the early team and company. Then use that to built a great company, whether it means leveraging distribution to get to a great product, or building a great product and figuring out the distribution.

And the truly great companies are constantly focused on both, like an oak seed going deep into the ground for a solid foundation (the product), and reaching for the skies to get sun and spread the branches (the distribution).

I’d love to hear other thoughts about this framework as well as other good examples. I’m also planning a follow up post about how to move between areas in the quadrant, and specific industry dynamics.

Entrepreneurs,

Looking to fund your idea, or to find out more about venture capital in the MENA region?

Our friends at MENA Private Equity Association put together a guide for new Arab entrepreneurs titled The VEECEEPRENEUR. It details the basic concepts of venture capital as well as the perspectives of major VC firms in the region.

The link to the full PDF:

Why do we still have to carry all our loyalty cards in our wallet when they simply can be replaced with a application on our smart device. And since we take our phone with us everywhere we go, we have all our card in the palm of our hand, and turn our fat wallet into a skinny e-wallet.

Jump start your ideas and apply to ArabNet’s Ideathon and Startup Demo. The Ideathon gives selected entrepreneurs 2 minutes in the spotlight to pitch their ideas to investors, incubators and others. The top 3 pitches will win cash prizes as a seed grant to help them build a prototype of their product. The Startup Demo allows selected startups that already have customers/users and a revenue stream to showcase their products in 5-minute pitches to a panel of judges. Additionally, startups will be provided with exhibition space for the duration of the conference.

The deadline to apply is on FEBRUARY 27th [Extended to March 6th]. You can find more information on the event and application process here.

StartupWeekend just announced:

YallaStartup Weekend’s very own Capsu.ly wins Global Startup Battle: Wild Card! In an impressive show of solidarity, Capsu.ly received three times as many votes as the second-ranked team. Lebanon now boasts the winners of both GSB: Week 1 with Mimix an dGSB: Wildcard with Capsu.ly –an impressive show of entrepreneurial innovation and grass-roots networking from one of Startup Weekend’s newer countries.

Capsu.ly is the “world’s first infinite and free community-based storage system” that takes personal files, dices them into pieces, duplicates and encrypts those pieces, and distributes them across a worldwide network of users. Files are safe and inaccessible by those hosting them yet account holders can retrieve their personal files at any time. Sound cool? Want to learn more? Check them out at capsu.ly!

Capsu.ly‘s win comes only a couple of weeks after Mimix’s! So Silicon Valley, can you hear us now? Now before you do anything else, it’s time to do the final voting between Week 1 and Week 2 winners, let’s show again our amazing support for Mimix. Yalla Vote NOW!

MBC Ventures is coming to Lebanon and Syria in the next few weeks to meet with young emerging entrepreneurs. They are hoping to identify a few to support with cash and expertise.

Read the MBC invitation below:

“MBC Ventures is a fund set up and run by MBC Group looking for young entrepreneurs who have ideas, products, and businesses in the media space that addresses the local MENA market. The sort of projects that MBC is interested to invest in will include among other things, initiatives on the web, new and innovative content for digital platforms, gaming, mobile apps, animation, etc… MBC will provide both cash and other support functions to help the selected projects become operational and profitable media businesses.

MBC is interested to explore Start ups that have a product and track record of performance with a business plan and investment proposal. If you only have a brief project with no clear business plan, we will also be happy to speak to you and see how MBC can support your ideas.

MBC needs a clear 3 year vision and an investment proposal where available.

Beirut
Monday the 13th of December – Between 11:00am to 1:00pm and 3:00pm to 5:00pm at MBC offices in:
Gefinor Center, Bloc B, 4th Floor, Clemenceau Street, Hamra

Damascus:
Wednesday the 15th of December – Between 11:00am to 1:00pm and 3:00pm to 5:00pm at MBC offices in:
Al Jamarek Square, Tabaa Building, 7th floor

For more information please email dania.ismail@mbc.net”

The Weekend of 12/11/10 was one to remember! More than 250 participants came from all around the Arab world came to Lebanon for a highly intense 3 days of coding, networking, fun and most importantly of action!

Friday afternoon the first “Geeks on Bus” arrived at Berytech from Syria. Crowds were pouring in from all over. We had people from Lebanon, Egypt, Saudi Arabia, Dubai, Jordan, Palestine, USA, Canada, just to name a few of the countries represented. Energy was mounting to get started, but we were waiting for our Jordanian “Geeks on a Bus” to arrive. The driver got lost, but they eventually got there. Gotta love Beirut traffic. When our Jordanian friends arrived, we were ready to get started.

The goal of the first day was to get people organized into teams. The stage was open for anyone to pitch their idea in 60 seconds. After an intense compressed session, over 60 ideas were presented. Now the task was to identify the best ideas that will get traction for teams to form around. So we did it Bazaar style where each participant had two votes to cast for an idea using plain old post-it notes. It was fun to see everyone selling their ideas to others, which is really something that also happens in real life during the early stages of a startup. People gravitated towards 35 ideas and now the wheels were set in motion to take that idea and build a prototype to pitch in 2 days.

Teams formed! It was amazing to see how multinational the teams were. Many of the teams had a healthy mix of gender, skill set, backgrounds, and passion! Immediately, all teams became a force and started to take that basic idea turning into something real. The energy was contagious. You saw people immediately busting out their laptops and started to design logos, UIs, user models, UI flows and some even started coding. Not only were new ideas being generated, but internet bandwidth, caffeine and snacks were being heavily consumed. The work continued till the wee hours of the morning. Some folks did not sleep, while others just crashed on a bean bag or sleeping bag. You could smell the adrenaline in the air! Really it was adrenaline!

The next day started off early with lots of caffeine and two wonderful talks by Walid Wannous and Ayman Chalhoub. Walid talked about the importance of UI and Ayman discussed the mobile revolution we are in the midst of. Work continued, but the pace got faster. So fast, that one of the internet routers got fried. It literally overheated. That was how hot the ideas were. We pulled some ninja moves and were able to get a new router installed within a few hours. One of the teams, KomicHub, during the down time wrote an application that would send a tweet and SMS notifications when we lost internet connectivity at the venue. How cool was that!?

Later in the day we had a great talk about agile development by Joi Ito. It was over skype and with our internet woes, Habib was transcribing live what Joi was talking about. You gotta role with the punches. After Joi, Ziad gave an inspirational talk about his journey building a mobile internet business in Egypt. As soon as the talks were done, people grabbed some chow and rushed back to keep hacking. Press, investors, and experts walked around to see what people were working on and gave them feedback. Everyone after their rounds came by and expressed their awe with what they saw.

In the evening, some teams took a break and listened to more talks by Chris Messina, who described the importance of simplicity and how to mobilize a community around your idea. Ayah Bdeir gave a very exciting talk about the intersection of engineering and art. This was followed by a showing of “Pirates of Silicon Valley”, one of the best geek movies out there.

Day 3, was when all the teams went into hyperdrive. The clock was ticking and everyone was scrambling to get their demos and pitches ready. For most, it was the first time they would pitch to an audience this large. Habib, Elie, Sami and Adam setup office hours to help everyone prepare. You could see in their eyes the shock of how much the teams achieved.

It was getting close to pitch time. Crowds were pouring in. TV stations, investors, students, professions, and more arrived. People from all walks of life came waiting to see what the teams have been cranking on for the past 3 days . There were over thirty 4 minute pitches to go through. So the best way to start is to just dive in. Habib described the ground rules, and got everyone pumped. Then the marathon started. One after another the teams presented their companies. It was a wow moment for all. Yes a wow moment. A panel of judges were evaluating each idea and keeping score. What was amazing was in the middle of the pitch sessions, an angel investor from Dubai, Samer Alameddine, came up and handed the organizers a wad of cash to give to the winning teams. How amazing is that? The pitching was over and now tensions were mounting because the results were getting tallied. The results were so close that we had to call the judges back to help identify the winners. It was an exciting time for all.

And the winners of YallaStartup Weekend 2010 according to the jury were:

First place… Mimix, a service that translates voice into sign language
Second place… Capsu.ly, infinite free community based storage solution
Third place… Hintout.com, a social platform that revolves around activities & going out.

The rest of the awesome startups created during the weekend are located here.

Congrats again to everyone. Everyone who participated is a winner! As the organizers, we wanted to remind everyone involved that this event is not a competition but about living the life cycle of a startup in just one weekend! It’s about getting interest for your idea, matching you with co-founders and team members, and showing each and every one of you what you are capable of. You all got a full dose of what it means to build something from scratch. What the teams were able to build in one weekend was really inspiring! A big part of entrepreneurship is about taking that first step, and remember, it all starts with the “Power of Yalla”; The power of doing things vs strategizing and thinking things forever before taking action.

To add more icing to the cake, Startup Weekend winners compete against their peers across the globe. Each city has their winning team send in a pitch to participate in a Global Startup Battle. Guess who won? Our very own Mimix. Go Mimix!

Right after we distributed the prizes and certificates we all went out and celebrated the weekend over some good food, bowling, pool and other fun games.

This event was a purely volunteer run event and we want to thank everyone who made this a reality. Some of the participants even gave us a hand on the first day to handle registration. We want to thank Ramy El Khoury from Umbrella for the great design work, we also want to thank Adam Stelle from StartupWeekend, who flew all the way in from Seattle and was of tremendous help; and Amir Kabbara and Rock Sfeir for all their hard work helping pull together the materials for the weekend! We also want to thank Berytech, Nicolas Rouhana, Tania Mazraani, Krystel Khalil and all the team for being amazing partners and hosts. Finally, we wanted to thank our sponsors for making this event a reality. As a not-for-profit, we depend on your generous support to make a difference. Thank you!

You can also view more pics here, some videos here and here.

The YallaStartup Team
Amir, Elie, Habib, Sami

Remember how Hitler first reacted when he heard about YallaStartup Weekend ? Well wait until you see what he said when he heard about the 30+ mind blowing startups that were formed at the weekend!

Hitler Sucks, MENA Startups Rock! YallaStartup Weekend from YallaStartup on Vimeo.

YallaStartup Weekend is one Weekend to remember, it was our first but certainly not our last! The amount of energy passion and talent was unbelievable, more than 200 people showed on up on Friday to pitch ideas and form teams. Teams got formed with people from various skills backgrounds but most importantly various nationalities. The weekend ended on Sunday evening with more than 30 startups created in just 2 days! Yes, it was an intense high energy but fun and productive Weekend!

We will write other posts summarizing the event and list all the amazing startups but first we want to share that WE WON GLOBAL STARTUP BATTLE!

Yes, that’s right, Mimix.me, a MENA startup made of people from Lebanon and Jordan that never met each others before the weekend, won part 1 of Global Startup Battle against 12 winners from other cities like Boston, Chicago, Dallas, Lisbon, New York and Sofia. Mimix is a startup that translates written and spoken words into sign language. Imagine the potential of such a technology on TV, airports, and even online videos like YouTube.

Congrats once again to Mimix but also to everyone who made it to YallaStartup Weekend, the startups created in that weekend were really amazing and we can’t wait to help and see them go to the next level! Watch that space! In the meantime take a look at some pics from the Weekend!

Creative Commons is finally coming to Lebanon and we are super excited about it.  Joi Ito and Larry Lessig one of the two most prominent names in the history of the internet will be speaking live at AUB on the 25th! Make sure you don’t miss this one in a life time oppotunity to mingle with the Internet Wizards! On the same night there will be a very fun Creative Commons Salon party in Karaj Beirut.

AUB Talk

Location: Maamari Auditorium, Olayan School of Business

Monday, October 25,  5:00 – 7:00 pm

Register here http://www.facebook.com/event.php?eid=163363530359136

Creative Commons Salon

Location: Karaj Beirut

Monday, October 25, 9:00pm

Register here http://www.eventbrite.com/event/970666289

About Creative Commons is a nonprofit corporation dedicated to making it easier for people to share and build upon the work of others, consistent with the rules of ©. They provide free licenses and other legal tools to mark creative work with the freedom the creator wants it to carry, so others can share, remix, use commercially, or any combination thereof.

Many great companies started as a weekend project and we want you to be next! If you are passionate about building great things and are up for a fun intense weekend then YallaStartup Weekend is for you.

StartupWeekend is a famous event that has taken place in 54 cities in the US and around the world and we are bringing it to Beirut on November 12, 13 and 14 at Berytech. The weekend is a hands-on event that encourages out of the box creative thinking and startup creation. The idea is very simple, you join us on the first day of the weekend with a group of highly motivated developers, product, marketing, graphic and business guys and girls together, you team up, decide on an idea, code and deliver a prototype on Sunday. During the weekend, VCs and experts will be spending walking around the venue and giving some short talks in the hope of scouting the next big thing! Winning teams will receive prizes and recognition on YallaStartup and our press partners.

A number of teams from StartupWeekend in the US actually went on to become successful startups and raise funding. The event is open to everyone and if you are in Jordan or Syria we are organizing sponsored bus rides in an exciting and fun “Geeks on a Bus” setup. We are also exploring with the help of our generous sponsors to help assist with your stay, but do feel free to bring your sleeping bags, Berytech is generously allowing participants to crash at the venue.

So what are you waiting for? Learn more and register at http://www.yallastartup.org/startupweekend/. If you register before 9/30, tickets are $25 off so go get them today!

Between now and the event we have a whole series of exiting activities planned. So stay turned!

Oh, and check how the worlds reaction to YallaStartup Weekend:

Update: More on this ground breaking technology here !

Howdy y’all, YallaStartup is heading to Austin Texas to represent the Middle Eastern startup community at SXSW!

SXSW is one of the hottest, and biggest conferences in the US around Film, Music and Interactive Media. For the first time this year there will be panel on Entrepreneurship in the Middle East and YallaStartup will be taking part of it. The panel will take place on March 14 at 9:30am and will discuss the state of digital entrepreneurship, obstacles, opportunities and success stories.

If you happen to be at SXSW, pass by say “howdy y’all” and make sure to cheer us. If you are not around, feel free to give us ideas and thoughts to talk about by commenting below, tweeting, emailing, texting, buzzing, yamlifying, foursquaring or even pigeon posting (unless the pigeon gets shot down by our Texan hosts).

UPDATE: We are also be cross posting this panel with our friends at HyperLinkPodcast.

PRESENTERS

Habib Haddad – Yamli.com/YallaStartup
Katherine Maher – sharek961.org
Sacha Tueni – Facebook
Moeed Ahmad – Al-Jazeera
Joi Ito – Creative Commons

SXSW 2010 Panel – Right-to-Left: Entrepreneurship & the Middle East from YallaStartup on Vimeo.

“Ask the Expert” is part of an ongoing series of Q&A sessions with industry experts where you, our readers, are given the opportunity to have your questions answered.

Our next “Ask the expert” series will be with Google Product Manager, Siobhan Quinn. Siobhan is responsible for one of largest web properties in the world, Blogger.com. She is excited about the region and has offered to share her expertise with you. Now it is up to you to ask her the hard questions.

The way this will work is you ask questions and we’ll  pick the top 3-5 topics for Siobhan to answer in a future blog post. Question collection will start today and will be open for one week.

Here is how you can ask your questions:

• Register on our Q&A platform if you haven’t do so already. It is important that you register so you can vote questions up or down
• Add your question to the “answer” section here. (Do not create a new question in the Q&A platform, instead add as an “answer”)
• Rate up or down other questions
• Share the Question link on Twitter and/or Facebook

About Siobhan Quinn

Siobhan is a Product Manager of Blogger at Google, the web’s largest blogging platform. Siobhan defines Blogger’s product vision and strategy, and works closely with engineers to oversee the execution of that vision through the entire product life cycle.

Before joining Google’s Product team, Siobhan worked as an engineer on Google Page Creator and Google Accounts, and was involved in launching many Google products, including Gmail, Personalized Search, and Google Checkout. Siobhan graduated with Honors from the University of Washington where she received a BS in Computer Science.

Siobhan’s interests include creating technology that enables self expression and personal creativity, cooking, and spending time with her dog Seamus.

We are very excited to let everyone know that YallaStartup has been selected to be part of the Global Redesign Initiative by the Young Global Leaders of the World Economic Forum. This means that as a initiative and a community we will have access to some amazing people who will help us in our mission.

This great honour was only made possible by the support of the great MENA entrepreneurial community and  will help raise the awareness and importance of entrepreneurship in the MENA. We as individuals, entrepreneurs and leaders need to take this issue head on, not because it is just good, but because it is a critical component for our future prosperity and stability.

The journey is just starting but it looks pretty exciting so far so YallaStartup!

Please visit our GRI page and endorse our work!

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About The Forum of Young Global Leaders
Established in 2004 by Professor Klaus Schwab, The Forum of Young Global Leaders is a unique, multistakeholder community of the world’s most extraordinary young leaders who dedicate a part of their time to jointly address global challenges and who are committed to devote part of their knowledge and energy to collectively work towards a better future. Together the Young Global Leaders work to discover innovative solutions to today’s most pressing problems through various initiatives and workstreams as well as catalysing the next generation of leaders.

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About The World Economic Forum
The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. (www.weforum.org)