Distribution Is the Third Dimension of Product-Market Fit

The Framework

Every founder obsesses over product-market fit. Build something people want. Find the market that needs it. But Vineet Jain built Egnyte into a $300M+ ARR company by treating PMF as incomplete without a third dimension: distribution.

Product. Market. Distribution. If you only have the first two, you have a great product nobody discovers. Most founders who stall between $10K and $100K MRR aren't failing at product or market. They're failing at building a systematic, repeatable distribution engine. They rely on word of mouth, a bit of content, maybe some cold outreach. That's not distribution. That's hoping.

Vineet's approach was to build distribution as deliberately as he built the product, starting small and scaling each channel before adding the next.

The 3 Steps

1. Start with one paid channel and measure everything. Egnyte began with search engine marketing. Their first month, they spent $6,000 on SEM. Not a random budget, but a deliberate experiment to see if paid digital could generate enterprise leads. The mistake founders make here is spreading budget across 5 channels at once. Pick one, prove the unit economics, then scale it.

1. Build inside sales before field sales. As leads came in, Vineet built inside sales offices in lower-cost cities: Spokane first, then Raleigh, then Salt Lake City. No expensive field reps in major metros. The mistake is hiring a VP of Sales and 3 field reps before you've proven you can close deals from a phone. Inside sales keeps your cost of customer acquisition low while you figure out the playbook.

1. Add channels only when the previous one is working. Egnyte layered field marketing, account-based marketing, and eventually field salespeople in key cities. But even at 1,400 employees, 60% of funnel management still runs through inside sales. The mistake is abandoning what works to chase what's shiny. Each new channel should complement the existing machine, not replace it.

Real Numbers

Egnyte's distribution evolution tells the story clearly.

Initial SEM spend: $6,000/month. That was enough to generate the first 25 customers, including a Fortune 86 company that found them through digital marketing.

Current digital spend: several million dollars per quarter. The throughput is still there, meaning the channel scaled without degrading returns.

Sales team: ~400 people across quota-carrying reps, pre-sales, and post-sales. But the inside sales model that started in Spokane remains the backbone.

Revenue trajectory: 12 years to $100M, 3 years to $200M, 18 months to $300M. That acceleration happened because distribution compounded. Each channel they added multiplied the output of the channels before it.

Total raised: $137.5 million. They didn't outspend competitors. They out-distributed them.

When It Fails

This framework breaks if you don't have product-market fit first. No amount of distribution fixes a product nobody wants. It also fails if your market is too small for systematic channels. If your total addressable market is 500 companies, ABM and direct outbound will outperform SEM every time. Don't build a distribution machine for a market that doesn't need one.

Your First Move

Pick your single best-performing acquisition channel right now. Spend the next 2 weeks measuring its actual CAC and LTV ratio. If the unit economics work, double your spend. If they don't, kill it and test the next channel. Don't run 4 channels at 25% effort. Run one at 100%.