Distribution works. With Funding.

Invariably every business plan I see - or every pitch I make to a VC - includes an element of 'channel' in it as a means of getting to market. But equally, the response is increasingly the same: We love the channel, but the capital to do it can be immense and hence the risk equation is uncomfortable. And they're right on all accounts. Right to love the channel because ultimately that is the way the company will truly scale. And right that it will be costly - and will take time. Lots of it. Yet it can work, and two recent announcements in the emerging telephony space validate this:

ooma raises another $18M: ooma has been at it a long time. But when you're trying to disrupt the oldest business out there (home land line), it's going to take a while. Yes this round came with valuation reset, but this is just a reality for companies who raised money before the crisis. More importantly is the confidence the investors are showing in what ooma has accomplished to date and in what's on tap. And that includes - in no small way - distribution. Ooma will tell you that a combination of the scale of the Best Buy channel and a pricing reset is what finally put enough wind in their sails to see a bright future. Since then other critical mass distribution like Radio Shack have joined on. With surely more to come. Distribution - setting it up and supporting it - is capital intensive. But in ooma's case, it's the only way to execute on their dream to disrupt.

Jajah eclipses a billion calls: The once cheap-calls-for-anyone provider announced this milestone this week. But read carefully. Where they once spoke loudest about the 10 million customers in their consumer business, the message has shifted (rightfully so) to a platform and partner deployment theme. And it's working. Jajah lists Yahoo, Plaxo, eHarmony and others as those large communities using the Jajah platform and network to power their voice applications. This did not happen overnight. A large consumer play and $20 million or more VC dollars fueled this success. But now with partners in play - both for revenue and credibility purposes - Jajah is perhaps better positioned than anyone in its market to really scale to the next level.

One lesson that is becoming clear and represents a departure from telecom business plans of the past: Go consumer first (or in parallel to a channel offer), build a brand and a service that works, but keep your eye on the prize - large distribution. Actually this is a trickier balance to strike than most believe. But when executed well, with a little timing or luck thrown in, all's well that ends well.