Paid acquisition is considered the most efficient and frictionless method of finding product-market-fit (PMF) for startups. PMF indicates the point at which a product or service generates sufficient organic demand from consumers, which is sustainable and economically worthwhile for startups to continue offering. Meta, which offers targeting capability, relatively cheap traffic, and a visual format for testing graphics and copy, is typically recommended as the first paid channel to explore. Alternatively, Google and paid search traffic are preferred if the offering involves high search-intent volume or is in a complex B2B segment.
To determine the right paid acquisition channel, startups should ask three questions:
If the product/service is highly visual, a paid social channel, such as Facebook or TikTok, should be considered. However, if the offering is immediate-solution oriented, location-based, or complex, a paid search channel, specifically Google, should be adopted.
The Venn diagram above illustrates which channels established startups should test to validate PMF. Some companies, such as Forward Health or Canva, can advertise on both channels as they are visual, uncomplicated and have a large target market. Conversely, Lugg, which helps people move homes, should use Google, given that the company offers a timely solution that consumers need during specific occasions.
In addition, BusinessofApps reports that the latest cost per thousand impressions (CPMs) on Meta is about $15 in 2023. Therefore, to have an estimated 1,000 people view the offering, the startup will pay around $15.
For successful startup ideas, a five-step strategy should be developed, which assesses PMF. The strategy includes selecting the best paid channel, deploying a waitlist strategy, optimizing messaging tests, utilizing scaling, and using PR to build credibility.
The strategy has been tested several times, and people can use it to assess PMF and validate their startup ideas.
