Comment by AndrewKemendo | Hacker News Reader

Comment by AndrewKemendo | Hacker News Reader

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You’ll have to rely on inorganic means like ads, marketing, or PR to maintain your growth, and this gets very hard to sustain

This is a point that I am always curious/skeptical about because growth will always become marginally harder. So ads, marketing and PR are always going to be necessary at some point.

Using his examples, facebook is creating airplanes to deliver facebook to people they can't reach otherwise - talk about high acquisition cost. AirBnB has a ton of TV [2] and Print ads.

Further, companies like abcmouse [3], dealdash [4] all blanket the airwaves with their ads and seem to be doing well.

So maybe some companies/products lend more to traditional ad spend than others, or maybe the idea that viral is the only way to grow and sustain is wrong.

[1] https://www.facebook.com/notes/mark-zuckerberg/the-technolog...

[2] https://www.ispot.tv/brands/oLp/airbnb

[3] https://www.ispot.tv/brands/d9N/abcmouse-com

[4] https://www.ispot.tv/ad/7Tc0/dealdash

The point is not to never do paid marketing, but to make sure that you have something in motion that doesn't rely 100% on paid marketing before you do. If people are talking about your product, paid marketing can help amplify the signal and the reach (facebook, AirBnB), but if you can get no one excited about it, if no one talks about it, then going all in with paid marketing is akin to shoving down people's throats something they don't want; it's unlikely to be sustainable even if you have large pockets.

CAC ~= CPC / conversion rate. If your conversion rate is 1%, then your CAC is 100 * whatever you're paying for a lead. If it's 50%, it's 2 * what you're paying. Many businesses that are uneconomical at 100 * their ad costs are economical at 2 * their ad costs, and even the ones that are economical are much more profitable.

The article is suggesting that you get your conversion & retention rates up into something reasonable before you blast out ad spending. You've got a lot more leverage here than on almost any other driver of your business's economics. It makes no sense to lose money on CAC - LTV and make it up in volume.

In my experience this goes hand and hand with getting your messaging right. If you have a product people love then you can work to articulate what they love about it and your marketing efforts become more focused and profitable. I agree that those channels can help develop your message, find early customers, etc. but that's different than investing in growth and trying to make your sales process repeatable; you're still learning at that stage. Investing serious money in marketing before you have the right product and the right messaging is the big mistake that I see a lot of startups run into.

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