How should a company decide how far to scale paid spend?

Paul Erlanger · Jun 27, 2026

Founders should deliberately raise CAC to reach harder-to-convert users rather than only harvesting the lowest-hanging fruit, so long as CAC stays below LTV

A user needing 10 impressions instead of two costs more but still pays back if LTV exceeds CAC, and chasing only cheap conversions caps the addressable audience

Scope: only while CAC remains lower than LTV; LTV must genuinely justify the spend

35:52 20VC: How We Got Fred Wilson, Benchmark and Index to Invest $94M | Why Robinhood's Strategy is Wrong | Why 1-1s are BS and What Every Founder Gets Wrong About Equity | Why Taste Beats AI But How AI Kills Org Charts with Paul Erlanger, CEO @ fomo

Paul Erlanger · Jun 27, 2026

CAC is pulled by opposing forces — it falls as you get better at the acquisition game, but rises because each incremental user is harder and costlier to convert once the lowest-hanging fruit is gone

36:32 20VC: How We Got Fred Wilson, Benchmark and Index to Invest $94M | Why Robinhood's Strategy is Wrong | Why 1-1s are BS and What Every Founder Gets Wrong About Equity | Why Taste Beats AI But How AI Kills Org Charts with Paul Erlanger, CEO @ fomo

Omer Shai · Jan 31, 2026

The way to know whether to cut or double down on a channel is to force the team to ask daily whether they are investing enough, and to run incrementality tests rather than trust the channel's reported numbers

When they swapped one product's commercial for another's on YouTube, the incremental impact was very low or non-existent, which led them to cut that budget

26:38 20Growth: How Wix Built a $100M Marketing Machine | Why LTV is BS and Why Time Return On Investment is the Most Important Metric | How to 10x Your Growth: What is the Next Great Channel with Omer Shai, CMO @ Wix

Cliff Weitzman · May 9, 2026

In hypergrowth, blended CAC can rise but direct CAC should not — every incremental dollar must be an attributable experiment you learn from

Spending $500k/month on 20,000 creatives or testing a new channel is a creative investment that unlocks later growth; unattributable spend like billboards is just setting money on fire

Scope: requires knowing LTV and first payment period

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Matt Swulinski · Aug 15, 2026

The decision to scale paid spend should be made by charting total spend against ARR and measuring how elastic and incremental that relationship is, not by whether campaigns look like they're working

once things work it's easy to dial spend past the point of incrementality, and the additive spend may produce identical results — meaning you are simply handing money to Meta and Google

Scope: there is a lag between spend and conversion, e.g. ~14 days

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Matt Swulinski · Aug 15, 2026

Once you spend north of $1M a month you must have an incrementality model, and deliberately dialing spend down with holdouts is a valuable learning exercise

The model will always be wrong at first; dialing down and running holdouts tests it, and it improves over time so you understand which levers are actually incremental

Scope: threshold of ~$1M/month spend

48:38 20Growth: How to Build a $100M Growth Engine: Lessons from Wispr Flow and Superhuman | Why You Should Do Paid Ads Today and How To Do Them | How to Build the Best Referral Programs and How to Crush UGC with Matt Swulinski

Adam Grenier · Mar 15, 2023

Paid acquisition should be a tool rather than a crutch, with roughly 30% of growth from paid as the default anchor

30% signals you are not dependent on paid but are running it enough to keep the capability refined and relevant; the anchor gives teams a reference point to feel discomfort when spend creeps above it instead of vaguely sensing something is off

40:47 Target roughly 30 percent of growth from paid as the default anchor scaling up only in land grab windows

Micha Kaufman · Jun 9, 2025

Marketing spend is the cost he would most like to cut, but cutting it is only viable when organic growth is extremely strong — which Fiverr isn't yet

Only a very strong organic growth component lets you question whether the incremental paid customer is worth buying

54:11 Cutting paid spend is only viable when organic growth is strong enough

Luke Harries · May 23, 2025

If a channel's CAC-to-payback ratio is comfortably above target, you should spend as aggressively as possible rather than incrementally raising performance marketing budgets

A healthy payback ratio is clear permission to grow; incremental increases like 20% a week waste the opportunity

37:24 Spend aggressively once payback ratio clears target rather than incremental increases

Matt Swulinski · Aug 15, 2026

The right way to find your spend ceiling is to scale as hard as you can until it blows up, diagnose where it broke, pull back, and then ramp again with those learnings

you don't have six months to discover the ceiling incrementally when you need 30-40% month-over-month growth; blowing it up tells you what is incremental, where audience saturation hits and where the channel mix needs adjusting

33:04 Scale until it breaks then diagnose and ramp