Techies say if your product is good enough, it’ll sell itself.

Marketers will tell you a good product is worthless unless you have great marketing to sell it.

Marketing Is Crucial…But Not What You Think

If your product’s 10X better than a competitor, it only has some potential to go viral. Your competitor’s market matters a ton as well.

If you’re dominating a tiny niche, there’s inherently no product-market fit and it doesn’t matter how good your product is.

And, if your product is the best in a large niche, you still need to market it to get initial customers. Say you have an insanely good product that’s 10X better than some popular competitors’. If you never, ever market it, nobody will know it exists and you will have exactly 0 customers.

Once you get your initial customers though, if your product really is 10X better than competitors, you will get a ton of WOM marketing (assuming you got initial customers that are deep within your niche).

Marketing becomes a lot less important then. Unless you want to reinvest your cash into acquiring new customers and making it grow fast that way.

Good Product Is Great Marketing

Marketing to get initial customers won’t work if your product sucks. You’ll ‘burn’ them and their potential word-of-mouth opportunities.

But you also shouldn’t wait years to launch your product because you don’t want to launch just to find out there’s no product market fit. I gotta friend who is working with a partner for 2 years to build an educational platform without talking to a single customer. Dafuq?

I think somewhere in between: “perfect” and “complete garbage” is a great place to launch. Or about 1-2 weeks.

You should be embarrassed at launch, and you should have a dialog with customers to say “yeah this is beta please give me all the feedback.” If you require feedback, then you probably should make it free, and if you’ve polished it to a point where it is very bug-free in corner cases and you feel it is a great product that’s useful, you should charge a lot for it. Example:

  • 1-2 weeks development time: free + beta
  • 6-12 weeks development time with a ton of polishing: paid (maybe free trial)

Once you have some customers, I think it is crucial that your product is the best in the market. Not the 2nd best. Not ‘the same as the best, but a lot cheaper.’

It must be the best.

The reason’s because if it is the best, and you have PMF, you should have very low churn. Your product should be so good you should aim for 0 churn (nobody ever unsubscribes).

0-churn is theoretical but it is great because it exponentially increases your LTV. Consider a $9/mo product, where you only acquire 10 customers a month:

  • Average churn after 2 months (50% churn): $18 LTV

    • Peak at $90/mo

  • Average churn after 12 months (8.3% churn): $162 LTV

    • Peak at $1200/mo

  • Average churn after never (0% churn): they pay you til they “die”. So if your average customer age is 35 and their average career lifespan is 65, then it’s 30 years of payments. LTV is $3240 LTV!

    30×12×9=$3240

    • Peak at $43200/mo.

Yeah, the money aspect is pretty great for 0-churn, but good product is great marketing. And it’s not because of WOM.

It’s because your cost per acquisition (CAC) skyrockets.

Assuming a 100% net margin, you can pay $18 to get 1 customer to breakeven. It’s a never-ending game of pain because you have to keep chasing down new customers to keep your business afloat.

To a lessor extent, the 2nd case is still chasing customers forever. A lack of advertising means that all your customers eventually churn after 1 year. But you can justify using $162 to acquire a customer. Assuming your marketing’s good enough to acquire a customer at $18 a pop, instead of breakeven like you would in the first case, you’d net $144.

THAT’S A ROAS OF 9, WITH THE SAME EXACT MARKETING! The only thing different’s your product. This means a great product on the backend can 9X your ROAS. A good product is great marketing.

The math for 0-churn is ridiculous and represents a theoretical max. A $3240 LTV means a 180 ROAS.

Something I Didn’t Talk About Above

If your product’s great, you get WOM marketing. This further increases your LTV as you can clump multiple customers to the same marketing budget. Example:

  • $18 to acquire a $9/mo subscriber.
  • Subscriber recommends your product to 3 friends and they sign up = $27/mo (not an MLM I swear).

Your 18 bucks grossed $36/mo in customers due to a great product (who would WOM a terrible product), and your CAC is still basically negative. They can churn the first month and you still net money.