ranidu

the ultimate signal of wealth is having a relaxed nervous system

There's a vast marketing industrial complex of agencies/consultants/advisors/whatever that promotes tech startups spending billions of dollars of unaccountable marketing budget. They're triggered by my anti-paid stance but here's the reality: - paid marketing is much, much worse than organic on every metric (conversion, ROI, etc) - startups work on a fast time scale and can't manage LTV/CAC correctly beyond a months timeframe - risk is asymmetric. a few bad cohorts can kill you (and btw, this has definitely happened) - the age of easy/cheap ad inventory is over. Pricing is controlled by an oligopoly, it's all being algorithmically bid up, and ROI sucks at scale - paid UA has S-curves. Early spend looks good, but plateaus and it's easy to get addicted - if your product is growing organically already, you might just be cannibalizing and pulling forward demand you'd already get anyway - high reliance on paid indicates weakness in the core product and value prop - you can't build a 100m+ DAU product with the majority coming from paid UA (it's just obv math) - going majority paid UA makes it 10x harder to raise VC capital down the line. For all the reasons on this list the main benefit of paid is simple: your agency/consultant/whatever spends money, some numbers go up, and you feel like you're doing something. It's simple to understand, you can apply it to every type of product, and every big co does it right? Billions of dollars swap hands just based on this dynamic. But for startups I argue it's the growth lever of last resort, since it's the most commoditized form of distribution -- you should try to exhaust your other ideas, invest deeper in your product, and grow based on whats unique in the ways that only your startup can grow. That way your channels are as defensible as possible, built around your killer value prop After all one day, you hit your CAC ceiling, your channel saturates, or worse, your competitors just do the same, copying your distribution strategy, dragging the whole industry into a prisoner's dilemma. When that happens, it's hard to incubate a bunch of new 0-1 channels to save your forecasts. The temptation is just to stretch payback periods, buy more, and ride it out. That's a dark path...

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