Distribution as the (Final) Moat

Growth should create leverage, not more administrative work.

If revenue doubles and your finance team is just reviewing twice as many receipts, that’s not scale. That’s linear workload growth.

That’s why I use Brex. Brex built an Intelligent Finance platform with AI agents that automate repetitive work — receipts, categorization, policy enforcement, reconciliation — so that finance output improves as the business grows, and I can focus on scaling the MM empire.

If you care about operating leverage, your finance stack should reflect that.

See why 35,000 companies like Anthropic, DoorDash (and me!) use Brex to spend smarter and move faster.

Yo, it's CJ! My recruiting arm, Mostly Talent, has been retained to fill the following roles directly from our readership:

These are the types of jobs I wish I could have worked on my path to CFO.

NGL, I’m kinda jealous!

If you need to hire and want to work with Mostly Talent, go here.

OK, before we get into the meat and potatoes of today’s post, a fun one - what’s the craziest distribution hack you’ve ever seen a company run?

When I was at PartsTech another player in our ecosystem spent tens of thousands of dollars each month sending surprise pizzas to auto garages.

After the pie landed, they’d call the garage and say:

Shockingly, people don’t hang up on you when you send them free, hot pizza. And it usually led to a warm convo, and many times a converted sale. Their CAC was $80 to Dominoes. And their product was $10,000 a year.

I do have to admit, this looks funny on the P&L. I’d love to be a fly on the wall when a VC gets their QuickBooks export, scratches their head and says:

Another example - my wife used to run the ABM (Account Based Marketing) team at ProfitWell. She’d spend hours researching what that founder was into and then coming up with a cool gift basket or bespoke SWAG that would be too good to ignore. For one founder who was a sneaker head they bought a rare pair of Jordans. But they only sent one shoe in the mail, and said if you take a demo, we’ll send you the other one. Worked.

These things don’t scale, but also they can scale if you want them to.

Me and my Mostly Growth co host Kyle Poyar were discussing distribution as the last moat on the pod. We were inspired by two creator businesses getting swooped up by big tech companies on the premise of distribution. Starter Story was bought by Hubspot and This Week in Fintech was bought by Plaid. They both have very valuable lists of potential customers. No idea what these acquisitions went for, at least in the mid single digit millions, perhaps more. Which shows brands are paying much more attention to distribution, and willing to acquire it similar to how they’d buy another tech company in the past.

And then right after we stopped recording:

OpenAI bought TBPN, the popular daily tech podcast / show. Rumor has it that it went for something in the “low hundreds of millions.” In other words, OpenAI was willing to fork over .1% of its value for the trust and distribution the co hosts have built with their pro tech audience.

While distribution is often thought of as a marketing “thing” it’s important for finance leaders to rethink what it looks like on the P&L, because it’s coming in different shapes and colors these days. And we are ultimately in the business of making resourcing decisions, allocating money to it’s best use cases. Here’s a glimpse into what you may see on your own P&L in the coming months.

The greatest product doesn’t always win. I don’t think many people believe Athletic Greens is truly the number one best awesomeness health supplement out there. It’s (somewhat) good for you green sludge.

AG1 is the number three podcast advertiser by show count in the world (according to my light armchair research). They go hard in the paint on pods. And they wouldn’t keep doing so if it wasn’t working (they are a For Profit Green Sludge Enterprise).

Three ways Athletic Greens partners with creators

BTW - Distribution is also a moat if you are able to block out competitors. If you do an annual deal it blocks out other companies from using the same distribution channel (see: TBPN with Ramp or this newsletter with Brex.

My friends Lenny and Kyle launched product passes where they got a bunch of great companies to offer year long free trials to people who are paid subscribers. A lot of brands really love these partnerships because:

The company’s CAC is essentially just giving the product away rather than spending on marketing.

In the Athletic Greens example, that’s a LOT of marketing spend going out the door. They are really spending money on marketing through a creator channel to get a better ROI than they would through classic Meta or Google Ads.

With the perks offering companies are using free products as an acquisition vehicle.

If you think bout what a Cursor or Replit or Lovable is doing, they’re giving away credits for free. They aren’t paying for a lot of paid acquisition as much as they are giving away inference. It’s similar in many ways to a free product or freemium product being an acquisition strategy.

Something we talk about often on the podcast is free to paid conversion and how there’s a penny gap phenomenon. People are wayyyy more likely to try something that’s free compared to if it even costs 1 penny to use.

Lovable even let’s you use the product without creating an account (which is kinda mind blowing). Just type in a prompt and start building something. Talk about betting on your product.

This will show up HARD in your Cost of Goods Sold. Maybe a creative accountant will try to park some of this in R&D or even S&M, but it’s effectively cost to serve. And it’s a lot more expensive than a typical free trial.

But if they retain and expand throughout your org, those initial free tokens are a drop in the LLM bucket.

Speaking of Lovable, I was building a tool to use internally at our bustling media company. And it defaulted me to use Supabase as the backend database provider. Otherwise I’d have an empty shoe box with no stuff in it.

I don’t know if Supabase is paying Lovable, but that is extremely valuable real estate. I recently wrote about this on Looking for Leverage - I think legacy SaaS companies can survive by becoming the default [procurement application, CRM, database] to AI native applications who are crushing it on the front end distribution.

This is a combination of a partnership motion and a technical integration. Vercel is doing a lot around this, making it very easy for LLMs to use them. They are pretraining Claude at being great at Vercel so it’s now the best product for Claude to use when AI is relevant.

This will show up in the P&L in two places:

Building a media company internally. Hiring in house creators.

Me and Kyle are both using beehiiv as our newsletter platform. They have their own newsletter called Creator Spotlight. It has over 400,000 subs and a 40% open rate. Which is phenomenal.

Freightweaves is another example. They have a media company focused on serving truckers and then a SaaS product they sell into that audience.

The risk here is the brand will need to resist the urge to make everything about their products. And the writing / videos cannot suck. The content has to stand on its own merits. It cannot be written by a junior marketing person with no practioner experience. It needs to be content so good people want to share it with other people, so good they would even be willing to pay for it if you started charging for it.

No clickbate garbage from someone making $70K per year. You may have to pay an industry expert $300K a year to do a great job (or acquire a creator).

If the creator approach with beehiiv and creator spotlight is to create a media brand around your target customer, the community play is to turn that audience into the core champion and mobilize them around the thing you’re trying to get them to do.

Hackathons are an age old community engagement tool.

There’s a legal AI company called GCAI. Legal is a hard space to get people’s attention. A general counsel prob doesn’t care about your software product. So what they do is teach AI for Legal courses on Maven. This will show up in production costs and the equivalent of sales enablement.

GCAI has taught thousands of lawyers how to use AI. And it’s working - nearly a quarter of the people who took the courses paid for their product.

Which is surprising because I didn’t know you could take a course via fax machine.

Cluey is great at this (no idea how good their product is). It’s taking a page out of the Real Housewives Playbook. Just start a fight publicly if ratings are down. Create an enemy. Say something contrarian.

Red Bull is the OG of doing crazy shit.

Sending a guy to space and having him jump from a rocketship is not cheap. That will make a dent in multiple areas of your P&L (not sure where you charge the insurance to).

I’ve been in contact with a lot of products that were NOT the best in their category. But they still have market dominance because the distribution engine behind them was first class.

I’ve also met founders working on something truly mind blowing, but no one buys it because they don’t know about it.

As finance leaders we are arming the marketing (and increasingly the R&D teams) in their fight for distribution. As AI flattens the playing field to building products, we need to be more creative in terms of where the sources of funding show up. So don’t be the No Police when your CMO asks if you can have a man jump from space. Just make sure to ask how many cans of sugary energy drink he thinks it will sell.

Wishing you strong and trusted distribution

CJ