App Stores
A relatively new invention. This is the primary distribution mechanism for mobile apps, in fact on iOS it’s the only.
There’s not a lot to say about this one. If your app gets featured by the app store (either by earning its way to the top due to being awesome, or being picked by an editor) you can get a ton of free traffic. Good luck though since you’re up against a million other apps.
Sales Team
Another old-school channel. You pay people to sell your products, usually largely on commission.
This channel is very costly, and you might spend tens of thousands of dollars just to acquire one customer this way. However you might make millions of dollars off of one. This is a typical model for B2B startups.
Affiliate Marketing
This is not very different than the search/internet advertising channel, which is why a lot of companies do both. The difference is that in this case you’re crowdsourcing it. Rather than buying a bunch of ads on Google or wherever, you simply agree to pay others for sending traffic your way. Sometimes it’s a flat fee, sometimes it’s a percentage of revenue.
This channel is used by a wide range of businesses. Netflix and Amazon have been two of the most successful affiliate marketers. It’s also used for seedy stuff like porn or online gambling that ad networks like Google block, or Acai-berry type scams that populate spam blogs (splogs) and the like. Unfortunately the scams are what you usually read about when you hear about affiliate marketing, even though there are plenty of legitimate businesses involved.
If you’re going the affiliate route, you make money when your affiliates do. What this means is that you need to enable your affiliates to make a lot of money, largely by doing the same things you do when you’re internet advertising (a/b testing parts of your funnel, etc.) plus you need to provide them good marketing tools.
You also have to manage your marketing. Are you going to allow affiliates to buy Google keywords? (Probably not if you’re already showing up organically for most.) Do you have moral concerns about how and where your brand is appearing? There’s a bit more of a human element to affiliate marketing than there is to online advertising, but the benefit is you get a lot of manpower without adding to your payroll.
Existing Audience
This works great for people who already have a large source of non-monetizing traffic. I grew my first couple successful products this way. I had a popular poker blog and used that to market a couple online poker products (one of which was basically an affiliate business that in turn marketed an online poker site).
The disadvantage to this one is you have to have an existing audience (duh). The advantage of course is that you get free, highly-targeted user acquisition if your product matches the site that got the audience in the first place.
Business Development
If you don’t have an existing audience, maybe you can piggy back on someone who does. Google used this famously when they made a deal with Yahoo to provide search results.
This sort of thing usually requires some legwork to get a license. You may need to know somebody in the right place to get the deal you want, but sometimes if you can provide a compelling enough argument (and assurances that you won’t harm the brand) you can pull off a Hail Mary. There’s very little more exciting for a new startup than to get to work with some hot IP.
This doesn’t work for everything. Go a little overboard and you end up with Sylvester Stallone’s High Protein Pudding. But if you’re making a game, basing it on a popular game of a different genre or TV show might be the difference between getting eyeballs and being ignored.
Marketing/PR/Traditional Advertising
There’s a good chance that these won’t do much for a software company. Rare is the website that can truly benefit from a magazine or Super Bowl ad. There are some, surely, I just don’t know enough about them to write intelligently on the topic.
