In insurance, wealth management, real estate, and many other industries, the “producer” is an agent, broker or advisor who finds potential clients and then helps them choose a product or service that fit their needs.


The very existence of a producer signals several things about a market. First, it says that the market is complex: It might have a lot of manufacturers with countless products, or a messy analog process, or it might be a rarely purchased service. Second, clients in this market need a high level of assurance to pull the trigger. They seek out agents or advisors to get that peace of mind.


Together, those two dynamics mean that distribution — that is, finding leads and closing sales — is particularly challenging in such markets.

In producer-led industries, tech-enabling startups that deliver new distribution to manufacturers are hard to beat. They benefit from accumulating advantages of scale. Because they can be paid a percentage of the distribution revenue, their contract values can balloon in a short time. And the more distribution they control, the more they can charge per-unit sold, giving them cash to re-invest in their own growth. 

This capital-efficient dynamic is a recipe for great VC outcomes.