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Why Entrepreneurs need a channel strategy


Today we all know that organisations like IBM, Coca Cola, Royal Dutch Shell and McDonalds are heavily reliant on their downstream sales and distribution networks to help them conquer new markets and boost top line revenue growth. Often seen as the preserve of the multinational a well rounded channel strategy can also help smaller, newer Enterprises outcompete and out manoeuvre their larger, more established rivals.

Most companies begin life with a small core of dedicated T Shaped Entrepreneurs. An industry term “T Shape” is the nomenclature given to people who are particularly skilled in one competency – for example Design, Engineering or Sales and while the list of competencies that people can be skilled in is long it’s unlikely that the small group of founders will have deep expertise in every single aspect of all of the competencies that make up their company’s operations.

Entrepreneurs, like our own founders back in our early days, often find themselves forced to become jack of all trades and are famously renowned for having to be the CEO, CFO, COO, CIO, CMO and sales team all rolled into one while all the time keeping two eyes on their burn rate.

At the 311 Institute we work with twenty seven Innovation Accelerator and Start Up Communities from around the world and we understand how challenging and tortuous those early days can be. As an Entrepreneur it’s simply not enough to have a great idea, you have to be able to execute it and if you’re trying to build a business, for example, in the Consumer Electronics and Technology sector then that also means having to create the first prototypes, testing them as best you can, refining them and then launching them into the market. For many Entrepreneurs it’s a struggle just to produce a Minimal Viable Product and then they have to be able to rely on their ability to sell those products in a timely manner for a large enough profit so they can recapitalise their business, hire additional staff and build the more refined second generation product and then the cycle begins all over again.

Capital is to Entrepreneurs what Aqua Pura is to all life on Earth and without it your business is going to wither and die. If you have bootstrapped your business using your own funds then your family’s whole life style can be on the line so once you have a product you need to sell it and scale up as quickly as possible. Troublingly for us though we continue to see multitudes of young businesses hiring new sales teams who struggle to break into new customers as they face barrages of buyers who have existing relationships with established incumbents who are better known and more trusted by their businesses – this process of course is made even harder if you have an undifferentiated “Me Too” product.

Capital is the lifeblood of any enterprise so how can you scale your business quickly, slow your burn rate and maximise the amount you can reinvest in developing it and your next generation product?

The answer is to build a Channel. Bring on Distributors and Business Partners who already have existing sales and marketing teams and deep relationships with your target customers. While you have to concede margin you no longer have to burden the fixed costs of hiring staff or supplying them with the right tools for the job but more importantly the right channel will help you get recognised, sell more product, scale faster and acquire new logo customers in a fraction of the time it would have taken you before. More importantly though the right channel strategy will far exceed any ROI that you or your investors could have realised by using your own in house resources.

Of course, articulating the benefits of the right channel strategy for your business and your industry is simple but sometimes there’s nothing quite like an example.

Early in 2013 a Series B venture capital funded SME appointed 311 Channel Solutions, our Channel Development arm to create, cultivate and manage their UKI and European channel. They had been actively trading for about eleven months and in that time had invested over £180,000 building out their sales team – not only did this expenditure increase their burn rate but as they found out many of their target customers either blanked them as an unknown or explained that they had pre-existing contractual arrangements with other suppliers that they simply couldn’t match. Consequently nearly a year later they had secured just one run rate customer and the business started feeling the strain. Our teams worked with their senior stakeholders to understand their vision for their company and designed an optimal distributor and downstream business partner channel strategy for them, then we launched. Just six weeks later their new channel network, complete with over 100 experienced sales people had secured wins in seventeen Tier 1, multibillion dollar logo customers that included Tesco, Oracle and Red Bull.

Could they have managed this by themselves? Probably, if they’d had the time, the relationships and of course if their money hadn’t run out in the meantime but the fact remains that in six weeks their new channel partners delivered results that have now put them in the pilot’s seat and the only way is up.

Many Entrepreneurs we talk to believe that channel strategies are the exclusive domain of larger, established companies but this is a false perception and with the right strategy, the right differentiation and the right channel team it’s easier than ever for you to grow your brand.



The UKI and European channel landscape is diverse, complex and evolving but with the right guides by your side it’s also one that has a wealth of opportunity. As an Entrepreneur you’ve already faced innumerable challenges just getting to the starting line and not only will building the right channel strategy help you capitalise and scale up your business faster but it will also let you focus on developing your company’s core DNA and your next big product.

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