How much to spend on growth before product-market fit

Members of the Growth work group on capping acquisition tests and splitting a month between new users and activation.

Updated October 13, 2026

Before fit, spend founder time and product work freely, and cap cash at what it takes to recruit one cohort you can learn from.

Spend founder time freely and cash sparingly. Casey Winters wouldn't set a fixed share of budget: spend enough to test one segment, and scale when successive cohorts keep doing the key action and retained users can fund a repeatable acquisition loop. Gustaf Alströmer would recruit users by hand and hold off on a standing ad budget until retention is clear.
Test a channel while the product takes shape. Brian Balfour would run a channel experiment before fit, so the product isn't built for a channel that can't distribute it.
With weak repeat use, fix the first session. Luc Levesque would put roughly three weeks of the next month's product time into the first session and repeat use, and one week into recruiting a small new cohort.
Set the cap and stop date before launch. Hila Qu would plan a four-week test around one ICP and one channel, and fund another cohort if activation and repeat use improve and users describe the same specific value. Gustaf would first reserve runway for at least one more product change, then cap the test at the smaller of what's left and the cost of a useful cohort.

Group chat with Gustaf, Hila, Luc, Brian, Casey — the Growth work group

Question:

How much should a startup invest in growth before it has product-market fit?

Casey WintersCo-founder at SuperMe. Ran growth at Pinterest, Grubhub and Eventbrite

I would keep pre-PMF acquisition spend at the level needed to bring in qualified users and learn from their behavior. The larger investment is founder time, product work, and basic cohort measurement: identify the action that shows someone received value, then measure whether they repeat it at the product’s natural frequency. At Grubhub, that action was ordering food, typically once or twice a month. At Pinterest, it was saving content, with weekly use as the relevant interval.

Substack

I wouldn’t prescribe a fixed percentage of budget. Spend enough on targeted acquisition to test a specific customer segment and its onboarding, then look for a retention curve that flattens. Increase acquisition only when successive cohorts keep doing the key action and retained users can support a repeatable acquisition loop through referrals, content, revenue-funded sales, or paid channels with a healthy payback period. The required retention rate varies with the strength of that loop; 10% might work for one business while another needs 40%.

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Gustaf AlströmerGeneral Partner at Y Combinator. Previously led growth at Airbnb

Before PMF, I would spend founder time aggressively and cash sparingly. Recruit enough users by hand to learn who gets value, watch whether they come back, and spend product and engineering time on the step that makes that happen. I would keep paid acquisition to small, capped tests that bring in users you can actually follow up with. I would hold off on a standing ad budget or a large growth team until retention is clear.

At Voxer, we spent roughly the first year improving the first session: a new user needed to see friends already in the app, so we worked on matching phone numbers and showing those connections immediately. That investment addressed whether people would use the product at all.

Apple Podcasts I would scale acquisition when successive cohorts of users return for the core use, and when the cost of bringing in a retained user supports the business. The right dollar amount depends on how many users you need to test that behavior and how quickly you can learn from them.

Brian BalfourFounder/CEO at Reforge. Previously VP Growth at HubSpot

The pre-PMF budget should include a channel experiment while the product is still taking shape. Product Channel Fit means shaping the product around how a narrow audience discovers and shares it. Waiting until after PMF to test a channel can leave you with a product that the channel cannot distribute. Spend founder time finding where that audience already gathers, and cap each paid test at the amount needed to recruit a usable cohort.

brianbalfour

Scale spend when retained users from that audience begin referring others and the same channel repeatedly brings in users at a cost the business model can support. Organic word of mouth is a strong early signal; paid acquisition can mask weak demand. Hire a dedicated growth lead once you can describe the growth model they will run.

Hila Qu 曲卉PLG advisor. Former Director of Growth at GitLab and VP of Growth at Acorns

Start narrow with the ICP before deciding the growth budget. I would fund founder-led customer calls, basic event tracking, and just enough targeted outreach or paid tests to learn whether that segment reaches value. The spend ceiling depends on what it costs to recruit a useful cohort; I would set a short test period and stop adding acquisition if activation and repeat use stay weak.

I’ve seen early B2B teams spread across customer sizes and industries, which makes messaging and product priorities unclear. Pick one segment, track its path to the first meaningful action and repeat use, and run a focused onboarding or messaging experiment. In my first growth role at Acorns, I prioritized customer conversations, one early experiment, and gaps in tracking before building a broader growth process. That is a useful order of operations, even though Acorns was at a different stage.

Substack

I’d increase the budget only after a specific segment and channel consistently bring in customers who reach the core action and continue to use the product. Compare that behavior by acquisition source, then spend more on the source that brings retained users.

Substack

Question:

Luc, Brian would test a channel while shaping the product, and Gustaf spent a year improving Voxer’s first session. If a startup has weak repeat use and limited cash, how would you divide its next month of work and spend between acquisition tests and activation?

Luc LevesqueFormer Chief Growth Officer at Shopify. Previously Meta and TripAdvisor

With weak repeat use and limited cash, I’d devote roughly three weeks of the next month’s product and engineering time to the first session and repeat-use problems, and one week to recruiting and observing a narrowly defined new cohort. That’s a planning choice for this situation, not a universal budget ratio. Cap paid spend at what it takes to fill that cohort; keep the channel test Brian describes running so we learn whether the right people can find the product, while using their sessions to decide what to fix next.

At my current startup, we drew a line at day 100 and brought in individual testers every hour. Their feedback produced roughly 50 to 75 changes to work through before a planned soft launch on day 150. The important part was scheduling real-user contact early enough to change the product. For this team, I’d instrument first-session completion and the product’s natural repeat action, make one or two changes, then recruit the next small cohort through the same channel. If the next cohort still drops out at the same point, spend the following month fixing that point rather than increasing paid acquisition.

Question:

Hila, Luc proposes bringing in testers steadily and raising spend cohort by cohort. How would you cap a four-week acquisition test and decide whether its results justify funding the next cohort?

Hila Qu 曲卉PLG advisor. Former Director of Growth at GitLab and VP of Growth at Acorns

For a four-week test, I’d set the cap by working backward from a cohort we can actually follow: one ICP, one channel, and enough qualified users to see where they reach the core action and whether they return at the product’s natural interval. Set the cash limit and stop date before launch. If the natural return takes longer than four weeks, the decision at week four is whether to fund observation, rather than declare PMF.

I’d spend week one defining the ICP and tracking the first meaningful action. Spend weeks two and three recruiting, watching sessions, talking with users, and fixing the largest activation drop-off. In week four, compare the new cohort with the prior one on activation and repeat use, broken out by channel. If those rates improve and users describe the same specific value, fund another small cohort through that channel. If qualified users keep leaving at the same point, put the next month’s budget into product and onboarding work. A signup count or paid account alone misses users who have stopped using a SaaS product.

Substack+1

Question:

Gustaf, Hila would cap cash at the cost of recruiting one useful cohort, while Luc would put roughly one week of work into recruiting it. How should a founder use remaining runway to set that cohort’s cash limit?

Gustaf AlströmerGeneral Partner at Y Combinator. Previously led growth at Airbnb

I would first reserve the runway needed to build and test at least one more product change after this cohort. A founder should then set the acquisition cap at the smaller of two amounts: the cash available after that reserve, and the cost of recruiting enough qualified users to observe the first-use and repeat-use behavior. Set the stop date and cap before launching the test.

For a network product, cohort size also has to account for whether new users can reach a useful first session. At Voxer, seeing friends immediately mattered so much that we spent roughly the first year improving phone-number matching and how those friends appeared.

Apple Podcasts If a channel brings cheap signups who arrive alone, spending more on that channel may give you a misleading retention result. Count the cost per user who reaches the useful first session and returns before funding the next cohort.

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Growth

3.5M+ insights

Growth leaders from Shopify, Airbnb, Pinterest & 5 more

by Lenny Rachitsky

Frequently Asked Questions

How do you choose a startup's first growth channel?
Pick a channel the product can feed, test it with one narrow segment on a set budget and date, and judge it by how many users reach value and come back.
What should a founder check first when growth stalls?
That the data is right, then cohort retention split by segment and channel. If curves trend toward zero in every slice, fix the product before spending more on acquisition.
How do you tell a growth problem from a product problem?
Bring in a small batch of users from one clean channel and read their cohorts. If they activate and return but there aren't many, it's distribution. If they leave within the first week, product owns the fix.
What moves activation in a new user's first few days?
Find where users drop, then match the lever: pre-answer setup for users who stall, make the first action an earned win for users who feel nothing, and bring back users who got value.
Who should own acquisition and retention, growth or marketing?
Most members would split near signup, with marketing on channels and the promise and growth on the path to first value. The line still has to follow the growth model, and both teams judge channels by the cohorts that stay.
Should a growth team report to product or marketing?
Wherever the biggest lever is. For most product-led companies that is product, next to core rather than inside it, and once paid spend matters too, one growth leader owns acquisition and activation.
Which lifecycle emails should a team build first?
The ones aimed at the steepest drop on the retention curve, usually the activation email. Depth and renewal emails come next, and win-back to fully churned users comes last.
How do you bring back signups who went quiet?
Watch a few try the next step and fix where they stall, then test the message with and without the fix against a holdout, and count retained use rather than opens.
When should a product-led company add sales?
A founder can start working accounts where usage is spreading and retaining. A sales team follows once deals need security reviews and procurement that self-serve can't handle.
Which self-serve accounts should a sales rep call?
Ones big enough to pay for a rep's time, with use spreading inside the company and a need self-serve can't meet. Hold some flagged accounts back to check that sales added value.
Which early action should count as activation?
Use two measures: an early action onboarding can move as the team's operating metric, and a later repeat action to check that those users came back. Randomize the onboarding change so motivated users don't skew the read.
What makes a good north star metric for an early product?
A retention measure built from how often the problem occurs, the action that solves it and the user it describes, with activation as an input. Drop it if the team can raise it without users getting more value.
Should a new marketplace build supply or demand first?
Whichever side gets a buyer to a completed transaction while giving the supplier a reason to stay. Start in one narrow market and track matches, supplier earnings and repeat buyers.
When can a marketplace copy its first city?
When service holds after subsidies come down, a new manager can run the launch playbook without the founders, and the team knows whether the channel behind market one's demand starts warm or cold in the next market.
How should you test a landing page?
Show visitors what they searched for before the ask, start with the page's first clear funnel drop, and count activated users per visitor alongside signups.
Should a startup with a few dozen users stop acquisition?
Stop broad acquisition but keep a small hand-picked flow from one segment, onboard those users live, and count only return visits nobody prompted.
How does a B2B startup find its first paying customers?
Have founders sell by hand to one narrow buyer, starting with warm intros and asking for payment early. Then check who actually paid, and at what price, before choosing a channel to scale.

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