Happy LDW –
Wherever you are, I hope you’re taking a minute to chill with friends and family. It’s extra beautiful in NYC and I’ve been looking forward to writing this newsletter all week because I can’t get today’s topic off my mind.
How do you navigate building the perfect timeline of product led growth followed by the right amount of marketing spend?
The hardest part is both what and when you do it.
Spend too early, and you risk pouring money into leaky buckets before retention is proven. Wait too long, and you miss the window where momentum compounds, competitors catch up and virality could hit. That’s why you need to nail this strategy: making your top user behavior contagious so your product grows itself.
It’s critical to consider: how do you spend burn correctly to bring users into a retentive experience, one sticky enough that they not only stay but actively kick off a flywheel that grows your product?
In startups, this all boils down to one equation: LTV/CAC (Lifetime Value / Customer Acquisition Cost).
But, I want you to think about this on a deeper level.
Marketing needs to be fuel on a fire that’s already burning. If it’s the only fire you’ve got to sustain growth, you can’t win in today’s world.
It’s an incredible challenge to time this all correctly; scaling marketing perfectly with the product you’ve built.
The right marketer will do what’s best for the health of the company.
The wrong marketer will only care about bringing in customers to the top-of-funnel without their overall long term impact on the business.
Let’s make sure you’re evaluating this correctly.
When You Scale Is Critical
People struggle with nailing the timing of scaling for so many reasons.
An overlooked but critical reason for this challenge is that we all want to believe in our product, that what we’ve built is good enough to scale.
If we deny scaling, are we essentially denying the validation of saying we’ve built something worthy of putting spend behind? Are you then admitting to yourself (and potentially to investors, competitors, peers) that you’ve failed or not yet made it?
Don’t get caught up scaling for optics. Your timing is a signal on this.
Most founders and marketers can’t handle balancing this pressure with balancing the perception of growth and winning.
Make no mistake: ramping spend too early looks like traction until churn shows up on the other side.
Here’s how I think about it:
Testing spend: It’s completely valid to spend enough to get product stat sig (~$50K/month for most startups).
Scaling spend: This is when you start steadily ramping that number up month after month.
Before you hit that ramp, these are the two things that really matter:
User retention: Do people continue using your product after 1 day, 1 week, 1 month, etc?
Product-led growth flywheel: Are your users sharing the product and helping grow it once they arrive? Is your product pushing your users to bring in other users in a good way?
These two things are what I really consider when something has an outstanding product-market-fit.
If you focus in on these two things as your product grows (and you ship new products, too), you can dodge the traps:
Paid channels can mask bad retention (you’re buying users who churn).
Virality from the wrong user segment (cheap users invite cheap users).
Mistaking press, hype or paid users for product-market fit.
Product-market fit is people using your product and pulling in their friends in because they can’t imagine experiencing the magic of it alone.
Here’s How You Can Time Scaling Spend Right
You should make a running list of all the below signals.
Early Signals That You Can Scale:
Organic word of mouth: People are using your product and talking about it with other people. Bonus points if this is happening in online spaces where your product is relevant.
Example: I’ve recently seen this with a new dating app, Cerca. You upload your phone contact list and you can only match with people who you share mutuals with. I’ve seen so many people online making videos about the product and how it’s hot and up + coming. Believe the product launched about ~3 months ago.
Retention curve: Aim for a flat or smile curve.
Flat: Means that a stable % of users are active vs. dropping off completely
Smile: Exceptional products show a "smile" curve where it rises after the initial drop-off. This shows that that users who churn early return later, often due to increased product value from user growth (example: network effects) or well done re-engagement strategies (example: user resurrection via email).
Here’s what you should focus on locking in before scaling.
Trigger Points for Scaling Spend:
What’s your CAC payback period?
What product are people coming to you to use? Is it your core product experience? Is it a side product? Does your product roadmap align with what people are currently coming to use?
Do you have a strong feedback loop with your customers?
Do your customers actually like your product?
Bonus: Is your organic customer acquisition stronger than your paid customer acquisition?
Bonus: Do you have a strong referral engine that makes up 10% of all new customers? Example: Shares that can be linked to new customers
Dodging red flags is a useful (and hard-to-master) skill in all aspects of life. Product building and marketing included.
Watch for These Red Flags:
What’s your churn? Is it high?
I like this rule of thumb: For B2C, if your annual retention is <30%, you don’t have PMF yet. If it’s >50%, you’re in the top tier.
For B2B: Net Revenue Retention (NRR) > 100% is best-in-class because it means your existing customers are expanding faster than they churn. But don’t let NRR hide the truth. If Gross Revenue Retention (GRR) is < 85–90%, that’s a red flag. It means you’re losing too many customers, even if upsells are covering it.
Understand these key differences:
B2C churn is more about building products sticky enough that people want to come back daily/weekly, because low ARPU (avg revenue per user) can’t tolerate high churn.
B2B churn is about making your product so embedded that ripping it out is painful and messy; integrations, workflows, data, team habits, etc.
What will happen to your product if you shut off paid marketing? Will it survive? If the answer is that it will die, that’s obviously not good.
Are you acquiring the right customers?
You need to make sure your product philosophy <> roadmap <> target customers <> actual customers.
Can you resolve product feedback?
Did you build a strong feedback loop and can you actually implement changes that are satisfactory resolutions for your customers? Literally, can you make them stop complaining and keep them obsessed with you.
Well, How’d I Do?
I want you to all get the timing of scaling your paid marketing against your product right. It’s that important.
This single decision, when to step on the gas, has killed more good startups that actually had a chance than bad product bets ever did.
You could be stuck building in the wrong direction, attracting the wrong users, attracting people into a leaky funnel, and on and on.
Let’s avoid that by keeping everything I mentioned today top of mind.
Know someone who needs advice or do you have a question on this? Reply here.
I’m happy to chat through if the right moves are being made alongside what’s being considered.
I hope you have an excellent week. In a few hours, it’ll finally be September.
Welcome to the best season!
Julia
