When is the right time for a startup to invest in advertising?
I'm asking this question because I have witnessed people passionately argue for both sides of this argument.
Some say that you should never pay for advertising until you have established at least some users, as this is the only way to validate that your team has even created something that people want. If you have created a product that your target user base isn't interested in, running ads early on is a good way to essentially burn valuable resources that could be going towards making a pivot.
However, others argue that if you have cash on hand, spending it on advertising can be a good way to build traction and get some initial momentum going, particularly in competitive spaces. This question has become especially relevant to me as I recently launched my third startup, Collab Spot (https://www.collabspot.io/), a platform to make it easier to gather feedback and iterate digital content. We have some resources on hand that could be directed towards advertising, but I want to get a broader sense of people's opinions on this topic before making an investment like that.
So, what do you think? What approach has your startup taken on this point? When is the right time for a startup to start advertising? And as a bonus question: if you do invest in advertising, what method have you found to be the most effective?
My advice:
Use free channels until you hit product-market fit (ProductHunt, Hacker News, Reddit, SEO, Twitter, cold outreach...)
Then slowly add in paid acquisition, IF you can ensure that you're getting more value out than you're putting in.
I.e, you spend $100 on ads to get a customer with an LTV of $120. Otherwise you're just throwing money away.
I like these tips for sure! This is essentially what I did for my first business, and it ended up working pretty well, but it can be a challenge to turn these free channels into actual users at times — particularly the ones where self promotion is discouraged. Have you had an experience of building up a business using free channels? How have you been able to establish that you have hit product-market fit?
Yeah it can definitely be a challenge, but you learn so much during that period. It forces you to clarify your message and dial in on your target customer.
Trying to skip all that and go right to paid usually doesn't work imo.
I built a business using mainly SEO and social because most of the typical indie hacker growth hacks & strategies don't work on my niche (Japan tech jobs). After >1 year of grinding, both traffic and revenue started to pick up and things started working. So I guess I'd call that product-market fit.
Great advice! Do you have any thoughts on how to get initial traction on social media? For instance, what strategies do you find effective (using hashtags, commenting on other's posts, etc)?
I think building in public is really powerful. But if you have a really tiny following, it can help to focus on replying to others for a while first (especially on Twitter).
Hello I'm looking to post a product soon as well and I've looked at yr profile and products and it looks really interesting. Just quick question, how many points do I need to post a post and product?
Hey Christian! I'm not sure about the exact number of points, but it only took like 2 days for my account to get verified — just engage with the community on here and I'm sure you will be approved in no time. Good luck on your product!
I thinks time to spend advertising is just after you archived proof of concept. I mean you already collected e.g. 5 or more payed customer.
Good tip! Although it does strike me as entirely possible to get 5 paying customers even with a product that doesn't really make sense (I'm thinking of a lot of content on the app store). This is great advice in general though and I will consider it as I move forward with Collab Spot :)