Distribution - The Only Moat Left?
Is SEO Dead? Distribution and trust are the only moats left
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Is AI Killing Your Distribution?
Your SaaS company is dead without strong distribution. And the distribution game is changing fast…
Cloudflare’s CEO recently shared some shocking stats about the effectiveness of content creation in 2025. Cloudflare handles ~20% of global web traffic so he has the data.
The question he began with was the following:
How many pages does Google/OpenAI/Anthropic scrape (i.e. take from you) in exchange for how many visitors do they send you?
Google
10 years ago: 2 pages scraped → 1 visitor
6 months ago: 6 pages scraped → 1 visitor
Today: 18 pages scraped → 1 visitor
AI summaries are now answering 90% of searches
OpenAI
6 months ago: 250 pages scraped → 1 visitor
Today: 1,500 pages scraped → 1 visitor
People trust AI more and so they aren’t reading original content. They aren’t clicking the links in ChatGPT
Anthropic
6 months ago: 6,000 pages scraped → 1 visitor
Today: 60,000 pages scraped → 1 visitor
If the business model of the web has been search, fundamentally, for the last 35 years. You get value by subscriptions, ads, or fame. All 3 of those things are going away, and they are going away fast — Matthew Prince, Cloudflare CEO
Seeking Distribution
As a finance leader at a software company and a small-scale “influencer” in the finance/accounting space, I have been seeing the problem first-hand. EVERYONE is fighting for eyeballs.
Competition is greater than ever (AI is commoditizing software)
Traditional content strategies are breaking
AI is radically changing the methods of getting attention
Customer acquisition costs are rising
There are A LOT of companies wasting absurd amounts of marketing money in 2025 running the old playbooks.
The joke used to be, “Half of the marketing budget is wasted but I don’t know which half". For many companies today it’s more like 80% of marketing is being wasted…
AI Stole Eyeballs
AI has stolen a lot of eyeballs from traditional web content and it’s rapidly surpassing a lot of social media attention. AI is repackaging your company blog/content or Google is summarizing it to get the exact answer the user is looking for. And users are increasingly not clicking on the source links to your content.
Example: HubSpot
A couple of years ago HubSpot got 26% of customers from Google and 13% from their blog.
So if organic traffic to HubSpot is down as much as 80% in 2025 then their acquisition costs are going to get a lot more expensive.
HubSpot gave a more nuanced explanation for the drop in web traffic, but regardless…if 30%+ of your customers come from SEO then you are going to feel some pain from AI’s distribution disruption.
Every eyeball is SO much harder to get today.
GTM Costs Are Rising
What happens when attention becomes harder to get?
Answer: GTM costs rise…
Building a software/AI product isn’t the hard part. Never really was for most companies. But the importance of distribution has never been more important than it is today.
The cost of sales opportunities is rising. And I believe that the significant changes from AI that the Cloudflare CEO spoke about isn’t even really reflected in the cost data yet…
The median CAC payback period for public cloud companies has risen a lot over the years. Even if it has somewhat stabilized recently, I am confident it is going to continue to get worse for MANY companies that don’t adapt.
Some of these CAC payback periods are already broken. You can’t have a sustainable software business in 2025 with a 7+ year CAC payback period. It won’t work!
Two things are happening at the same time, and they are wrecking unit economics:
Revenue growth is slowing
AI is screwing up distribution
Finding Efficient Distribution
In 2025 finding efficient and effective distribution is just as important as building a really awesome product. I am not a marketing person. I am a simple finance nerd, but here are a few quick thoughts on this topic based on what I have seen:
1. Trusted Voices with an Audience
People are tired of (or don’t trust) company blogs/newsletters. Customers trust AI more than a company blog in 2025. Doesn’t mean you shouldn’t have a company blog, but spend time on the higher ROI items - stories, data, and unique insights.
Trusted influencers/voices that own their audience are more valuable than ever today.
I am obviously plugging the OnlyCFO newsletter 🤣. It gets a quarter of a million views every 30 days (and growing). Not bad, right?
Newsletters like mine don’t heavily rely on SEO because 95%+ of views come from emails directly to inboxes, so the drop in Google sending traffic doesn’t materially impact me today.
BUT….there is certainly a longer-term impact to ALL web content (including mine) from AI. Starting something new is 10x harder than when I started. Those with an existing large audience have a major advantage.
2. Controversial Marketing & Stunts
Cluely is a prime example of a distribution moat in a crowded AI space. From what I can tell there isn’t anything super special about Cluely’s tech…anyone can build it. But they raised money from a16z and have been growing like crazy because they unlocked a distribution moat.
And now they have the audience and the money to build even faster and capture the opportunity.
Without their distribution moat, they wouldn’t have gone anywhere (or raised any money). But not everyone can (or should) take a Cluely marketing approach.
3. Find the Eyeballs
Finding the content/influencers that can be brand ambassadors. Sponsorships on podcasts, newsletters, etc have been happening for a long time, but a trend I am seeing is going bigger with a smaller group and asking the influencers/content to do the same (almost like being brand ambassadors).
Ramp and TBPN
Ramp hit it big by being the headline for the explosive new podcast that everyone and their mom is talking about — TBPN.
Brex and Sourcery Podcast
Brex has done something similar with Molly O'Shea and the Sourcery podcast.
Expensify and F1 Movie?
But not all big bets pay off…Expensify has reportedly spent around $15M to sponsor the F1 movie.
Are they going to get lots of eyeballs? Absolutely
Will they convert into high-ROI leads? I don’t think so.
Getting lots of eyeballs is different than getting the right eyeballs. I think the new customers won from this campaign will have a VERY high acquisition cost per new customer. And a company spending 10% of its market cap on an ad campaign feels….kinda weird.
Final Thoughts
The company with the best product often loses because they don’t have a good distribution and sales strategy.
AI is making this 10x truer in 2025.
SEO IS NOT DEAD (yet). Injured…yes, but SEO still matters.
But companies need to evolve and figure out distribution (and sales) in the age of AI.
Distribution shouldn’t be an afterthought when building in 2025. Established companies may have a distribution advantage but it can easily be lost (and costs will rise) if they don’t adapt.
Footnotes:
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Another great, timely post.
Are you sure you’re a CFO?! 🤨. You seem too well-rounded in your interests, instincts and thoughtfulness!
I know you know me for my SaaS metrics diatribes and geekiness… but one philosophy I’ve had all along is that to continue to attract attention and ultimately leads - you’re going to have to do more than SEO or even good blog posts. You need killer, unique content that you can sever off from the scrapers and AI. For me — I happen to think benchmarks can be some of that content. Especially if you are a large player in your space and have lots of industry-specific data that you can serve up in an anonymized, safe, valuable way — that Google and the LLMs can’t steal. Important players already have that content — they don’t need to run surveys. The question is how to unlock it.
Building an audience and collaborating with Content Creators is clearly becoming the winner. Any product I have become aware of has been through X, Substack or Youtube. If my favourite content creator is using it then I know to give it a try.