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- Wealthfront CEO Andy Rachleff on why advertising spend makes it harder to find product/market fit
Wealthfront CEO Andy Rachleff on why advertising spend makes it harder to find product/market fit
Andy believes paid user acquisition can be a distraction for startups:
“The way that you know you have product/market fit is if you have exponential organic growth. That’s not an easy thing to do, and advertising can make you think you’re doing well because you’re buying customers when in fact you’re not. The only way you drive exponential organic growth is through word of mouth.”
He recalls a Japanese saying in manufacturing: “You can’t see the rocks until you drain the water.”
“By getting rid of the advertising, we could actually see if we were driving exponential organic growth… The great companies were all built through word of mouth and through great products.”
Instead of marketing, Andy has chosen to invest most in building a product that delights customers because, as he puts it, “delight is the greatest form of virality.”