JC's Newsletter - Why we distribute directly
Dear friends,Every week, I’m sharing an essay that relates to what we are building and learning at Alan. Those essays are fed by the article I’m lucky enough to read and capitalise on. I’m going to try to be provocative in those essays to trigger a discussion with the community. Please answer, comment, and ping me! If you are not subscribed yet, it's right here! If you like it, please share it on social networks! Why we distribute directlyAt Alan, we want to control our distribution and relationship with customers. To quote Bernard Arnault: “the key is to control the factories and hence the quality, and the distribution and hence the perception.” Member-first: Always start with customers’ viewThere are many hidden costs associated with working with intermediaries. It is essential to identify these so that we can make the best decisions for ourselves and never find ourselves in a situation where we don’t control the relationship with our customers. 1️⃣ Category creation
2️⃣ Trust & incentives
We think and build for the long term.Thinking short-term, working with intermediaries can appear attractive, because it could accelerate short term growth with more “ volume” because they have an existing customer base. At Alan, we believe that we should avoid letting another company insert themselves between us and our customers. It not only weakens us to have an intermediary, but also deprives us of valuable signals about what our customers want. 💡 Sam Walton, founder of Walmart: “When you own and manage your distribution and logistics channel, you have a great competitive advantage over companies that rely on third-party suppliers. It automatically shortens your lead times, but also you can constantly look for ways to improve your operation and try to make it more efficient. You never have to rely on what’s going on in somebody else’s shop.” We understand the second-order consequences of our decisions.There are many hidden costs associated with working with intermediaries. It is essential to identify these so that we can make the best decisions for ourselves and never find ourselves in a situation where we don’t control. Customer Signals are Key to Cracking the Market💡 ”Avoid letting another company insert themselves between you and your users. It not only weakens you, but also deprives you of valuable signals about what your users want.” ”Avoid Faustian bargains (deal with the Devil) with companies that promise you users, but on their terms.” These quotes from Paul Graham perfectly analyze the risk of placing an intermediary between your company and your client. Understanding members’ and customers’ behavior is key to continuously improve our product and develop personalization. We must deeply understand:
Alan’s first product was developed after deep discussions with people and admins, understanding their pain with their health insurance at the time. This closeness to our members, and to the admins, is at the heart of Alan's success and must never be sacrificed. We should always remain focused on creating value for our members and customers. Controlling our Distribution, we Master our Destiny📆 It might take a bit longer without intermediaries to reach the customers & members, but when we do, we are in a lot strong position. Not working with intermediaries forces us to develop our own distribution capabilities. There's huge value in mastering and controlling our own distribution. We own our destiny. If you try to farm out your distribution, you're beholden to another entity, which is an unwise bet. That's how a dynamic power changes, our leverage comes from having a strong product, a strong brand, and a formidable ability to sell it. That’s what we have been doing since the beginning of Alan, and it makes a huge difference in our LTV to CAC and our capacity to keep growing at a very fast pace. Some articles I have read this week👉 Justin Mares (founder of TrueMed) - The US Health Crisis (Join Colossus)
👉 Airbnb’s Brian Chesky. Leading through uncertainty: A design-led company (Config)
👉 Tweet from Aleksa Gordić on how GPT4 was trained (Twitter)
👉 Restaurateur and Unreasonable Hospitality author Will Guidara on elevating mundane moments to magical experiences
👉 🇫🇷 Le plafond de la sécurité sociale devrait augmenter de 5,4% en 2024, selon le rapport de la commission des comptes de la Sécurité sociale. (News Assurance Pro) 👉A guide for finding product-market fit (Lenny's Newsletter)
👉Geoffrey West (British theoretical physicist) (Farnam Street)
It’s already over! Please share JC’s Newsletter with your friends, and subscribe 👇 Let’s talk about this together on LinkedIn or on Twitter. Have a good week! |
Older messages
Why having a bias for building
Tuesday, October 3, 2023
JC's Newsletter #191
How we want to build 0 to 1 products at Alan
Tuesday, September 26, 2023
JC's Newsletter #190
Essay: AI is the future of health
Tuesday, September 19, 2023
JC's Newsletter #189
LLMs, objectives and the future
Tuesday, September 12, 2023
JC's Newsletter #188
Essay: Investors, Focus & horizons
Tuesday, September 5, 2023
JC's Newsletter #187
You Might Also Like
Update: AI Explored podcast With Michael Stelzner
Saturday, May 18, 2024
Hey, Reader! We've got some exciting news. Not only did we launch the AI Explored podcast on Apple Podcasts, Spotify, YouTube Music, and Amazon Music—we did even one better. I realize so many of
'Can You Stay Curious a Little Bit Longer?'
Saturday, May 18, 2024
We spoke to best-selling author Michael Bungay Stanier about why it's so critical to take risks, the "fierce love" element of coaching, and resisting the temptation to give advice.
The Catch-22 in Hiring Today
Saturday, May 18, 2024
There shouldn't be, but there is To view this email as a web page, click here saastr daily newsletter The Catch-22 in Hiring Today By Jason Lemkin Friday, May 17, 2024 | Growth So there's a
Don't Overlook Creatives: Success with TikTok ads
Saturday, May 18, 2024
Discover the Psychology Behind Effective Ads
Valuations can be deceiving
Saturday, May 18, 2024
Also: Ranking the top VC investors of Q1; Our analysts' key takeaways from a number of recent conferences; Don't miss our tech talk on gaming! Read online | Don't want to receive these
How will foreign policy fare after the world's biggest election?
Saturday, May 18, 2024
Multiple diplomatic challenges await the new government that takes charge in New Delhi in June ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
7 secrets of Reddit
Saturday, May 18, 2024
Today's hack Very Positive or Very Negative posts perform significantly better than Neutral ones on Reddit Datastories analyzed 4 million data points to see what makes it to the front page of
Profit Potential - Not to Be Taken Lightly
Saturday, May 18, 2024
Say goodbye to endless testing and hello to profitable campaigns View in browser ClickBank Are You Ready to Revolutionize Your Affiliate Marketing Game? A groundbreaking opportunity is waiting for you.
The Future of Coding with AI: An Interview with Eli Hooten
Saturday, May 18, 2024
We discuss essential skills for software engineers, the role of open source, and embracing AI as a force multiplier
🎙️ Find That Pod #262
Friday, May 17, 2024
Let's discover some awesome podcasts together.