Distribution Beats a Commodity Product
When products in a category are basically interchangeable, an adequate product with superior distribution wins
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 86%
A competitive-strategy rule for commoditized categories. Once the underlying product is good-enough and undifferentiated to the ordinary user, the deciding factor stops being product quality and becomes distribution and brand — the ability to spray an adequate product across surfaces people already use, exploit defaults and inertia, and reach users before rivals do. It reframes incumbent advantage as a distribution asset rather than a product one.
Origin
Benedict Evans's framing from his late-2024 and early-2025 writing, illustrated with the browser wars (Microsoft/IE), Google pushing Gemini, and Meta's Llama assistant reaching users through existing surfaces.
Core principles
- 01If the product is a commodity, distribution is what matters
- 02An adequate product that is 'fine' plus broad distribution beats a marginally better product with none
- 03Defaults and inertia are the mechanism: people don't switch from what's already in front of them
- 04Incumbents win commodity shifts because they already own the surfaces and the brand
- 05Winning distribution can still be strategically empty if the value lives up the stack (see the browser case)
How to run it
- 1
Confirm the category is a commodity
Verify that to a normal (non-expert) user the competing products are effectively indistinguishable — the test is whether a regular person can tell Gemini from a rival.
Watch out 'Basically commodity' is a user-perception judgment, not an engineering one; experts overestimate how much the differences matter.
- 2
Get the product to 'adequate,' not perfect
Ensure the product is good enough — 'it was fine, it wasn't that bad' — rather than chasing a quality edge that users won't perceive.
- 3
Spray it across existing surfaces
Push the product through channels and defaults people already use, the way Meta put its assistant on every surface and Google drives Gemini through its properties.
Pro tip Reach users before rivals can spray their equivalent everywhere — first default tends to stick.
- 4
Exploit inertia and the power of the default
Rely on the fact that once people are using the default, switching costs of attention keep them there — 'why would you switch?'
Watch out Winning the commodity layer may buy you little if the real value is upstack — Microsoft won browsers for years and it got them nothing.
In the wild
Web browsers are a thin wrapper around a rendering engine — an input box and an output box, with the last real design innovation (tabs) a couple of decades old. Microsoft used distribution to break into the market against a commodity product.
→ Distribution won the category, though the value ultimately sat further up the stack.
Survey data showed Meta's assistant ranking up alongside ChatGPT and Gemini in usage even though the tech crowd had written it off — because Meta sprayed it across every service surface and it was good enough.
→ An adequate product achieved broad usage purely through distribution and default placement.
Common mistakes
Believing a marginally better product will win a commodity category
In a commodified field users can't perceive the quality edge, so a better-but-undistributed product loses to an adequate-but-everywhere one.
Assuming winning distribution automatically captures value
Microsoft won browsers for five or six years and gained nothing because the value had moved up the stack — distribution victory and profit are not the same thing.
Is it for you?
Best for
Founders and product leaders competing in categories where the core product has become good-enough and undifferentiated
Not ideal for
Genuinely differentiated products or categories with strong network effects, where product advantage still compounds
From the transcript
“if the product is a commodity, then the distribution is what matters.”
“So distribution of an adequate product when the field is basically commodity distribution on brand become a big deal.”
“they'd sprayed it on every service surface and it wasn't that bad. It was fine.”
“Microsoft wins browsers for like five six years and it doesn't matter it doesn't get them anything.”
From the episode
A rational conversation on where AI is actually going
Benedict Evans