[nathan_f77]

> Purposefully under-optimize

> For example, I really do not understand paid search advertising (Google Adwords, Facebook, etc) so I purposefully put almost no effort into it as a customer acquisition channel for Storemapper.

This article is awesome and super helpful, but that particular point seems like terrible advice. Surely it would be much better to hire a marketing/adwords contractor, and increase the value of your company by getting more customers.

I don't think I would want to purposefully leave any "room for improvement", just to make a startup more attractive to buyers who have some experience with ads and SEO. I'd prefer to do the best job I possibly can, and I'm sure people would be still interested in buying, as long as you have the customers and revenue.

[cultvoid]

In my experience, hiring a marketing/adwords contractor is the very easiest way to transfer cash out of your business and into somebody else's business, with no discernible value gained.

I'm sure there are some hotshot marketing/adwords contractors out there...and unicorns probably exist also.

[ProblemFactory]

The "problem" with SEO and adwords consultants is that the good ones would be working for the most lucrative verticals: insurance, consumer finance, medical lawsuits, etc.

If your small SaaS business can afford to hire them, then they aren't worth hiring.

[HeyLaughingBoy]

You can say that about literally anything and have it be false. Simply because someone/some company is amazing at what they do, does not mean they are priced out of reach or otherwise unavailable.

[cultvoid]

Indeed. Paid advertising has been a busted flush for many years now.

I'm still not sure the theoretical consultants you've listed would be "good" as such. They'll just have a massive budget they can use to blow the competition away.

I'll rephrase it as: The "good ones" would be working in a completely different field where their talent actually provides some value to the world.

[shostack]

As someone who manages digital media for a living and has done so with very large sums of money with measurable revenue attached to that spend, I'd invite you to share what makes your experience so concrete as to enable you to attempt to discredit an entire industry with a wave of your hand.

I'll be the first to say that measuring the incremental impact of advertising is often very challenging for a variety of technical and business reasons. That does not mean it doesn't work.

[Papirola]

there's a difference between correlation and causation, and if you can't measure/explain a direct cause-effect relationship then for technically oriented people your proposition loses credibility.

[shostack]

But that's my point. Often times you CAN very easily measure direct cause-effect relationships between ads and revenue. When you get into brand advertising territory it gets a bit murkier because of the data and modeling involved, but you can definitely determine this in many cases.

Where it doesn't work is when you have inexperienced people spending an amount insufficient to properly measure results, not implementing conversion tracking properly, using poor targeting, etc. Of course that's going to fail.

And I'll note that there are VERY technically-oriented people in the industry who seem to have no problem feeling confident that advertising works for them.

My problem is simply with people who have had a few bad experiences writing off an entire industry. All I'm asking is for a bit more evidence for such a sweeping accusation, which I think is more than a fair ask.

[dboreham]

"The lady doth protest too much, methinks"

[tylertringas]

Don't underestimate the "Irrational" elements of a big transaction. The buyer needs to be able to tell themselves (or board or LPs) a narrative about how they are going to buy this business and then massively accelerate growth. Leaving some low hanging fruit can really help close the deal.

[quickConclusion]

Can't speak for the OP, but when you own and run a profitable business that sustain financially your lifestyle and more, your focus is not automatically about growth anymore. As the OP says, it is often about reducing time spent. Hiring someone for SEO, managing her/him, making decisions, is a lot of extra work. I see the rationale for leaving that work to be done by the buyer, especially if you don't like doing it, and making the buyer feel good about their added value in the process.

[danvoell]

Totally agree on the "room for improvement" comment. Potential buyers, any time you see things like "marketer/seo/salesman could totally increase business" take it with a grain of salt. Don't assume the seller is lazy, naive, wants to leave money on the table. Assume they are smart and they have done everything they can to make the business succeed and there is no reason why you will do better. If you know the market inside and out and you understand monetarily where they are missing the mark, then, by all means, go for it.

[fpig]

I agree his explanation of purposefully under-optimizing doesn't make sense, however let me try to rephrase it in a way I agree with:

Paying someone to do something for you is as an investment. If you have no understanding of what you're investing in, it's not strange to be reluctant to make the investment. Additionally, if you're doing this type of marketing, but doing it suboptimally, you're not only wasting money, but an investor might not see the room for improvement because they may not see that you're doing it badly. They see "this is how many users they're able to get while doing all this marketing". If you haven't tried this type of marketing at all and the investor knows how it works better than you, they may see more room for improvement.

I think he is just being too liberal with the term "optimize" and what he means is, do the things you understand, and avoid doing the things you don't understand badly if you don't have to urgently deal with them.

[tylertringas]

^ this is a fair re-phrasing that I'd agree with.

[charlesdm]

Maybe he just preferred having a healthy amount of money in the bank, and the multiple was worth it?

Having $500k - 1m brings decent peace of mind, even if it was a nice business.

[imhoguy]

Exactly as author mentions the risks and the focus in the article. Future, especially in IT and ecommerce, is unknown and next month some mamoth competitor or smart copycat can step into his market.

[webbie917]

I believe Tyler refers to not wasting resources on acquisition channels that you don't have expertise on. That hurts the bottom line and profit margin at the end of the day if you try and fail at a lot of things but also may imply that the business "can't be grown" because the current owner "tried it all". If you are confident in outcome you should always try to maximize total revenue and MRR/ARR metrics.

[shubhamjain]

Everyone has their own experiences and opinions about paid advertising. For some businesses, it has worked wonderfully; for others, marginally more than a money sink. From what I gathered, Tyler did try paid advertising but it didn't work out and organic growth proved to be enough for him.

Personally, I would rather leave money on the table than trouble myself with another marketing channel to make more money than I already super-happy with.