I have an inclination to spend as little money as I can. At first this seemed like the right thing to do- validate your business before you spend money.
I have only spent money on the bare minimum- hosting, api services, etc.
But now I'm in this limbo stage where I'm not sure how validated we are, and I might need to put money into the business to grow.
My business is growing exponentially, but our profits aren't yet big enough to cover much. MRR is at $2.5k in Oct 1-21, up from $555 in all of Sep. But I make about 5-7% of that because most of that money goes to the user.
So I'm still not sure if my business is validated. Yes, there's growth. But is our market big enough to be significantly profitable?
Also I now have a competitor. We are a little different. But seeing them grow faster than us by clearly having more money and employees makes me feel the need to grow faster.
Over and over again I hear the same criticism from my friends-
--->"You need to spend money to make money".<---
But but but but but!-
The most useful things to spend money on would be extra help or marketing.
I am the developer, marketer, content creator, customer service.... My spouse helps with small tasks. But he doesn't have the hard skills I have. So having someone help with marketing or dev would speed things up.
But how can I justify hiring someone when my company is making $150 in profits? Hiring someone with these skills costs min 60K+. Do I dip into my savings for this? It doesn't seem wise. Do I give away equity instead?
Spending a bit on marketing is more feasible. But there are so many avenues to go. Do I spend it first on customer research to understand how to market? I still feel like I could learn more from my customers. I've had trouble getting them to do customer research calls with me without offering incentives. The insight might clarify a lot for me. But this doesn't directly grow the company. Might slow things down.
Do I just take a leap and put the money into influencer marketing, give aways, targeted ads? I also have to consider if these marketing tactics would only move vanity metrics-ex follows on twitter- without getting high value users.
Or do I just keep growing slowly until the profits are more substantial to spend. Does this risk moving too slowly and letting competition push us out?
How do you know when and how/where to spend money?