Injecting capital too early into paid marketing creates unsustainable growth
Mariam Naficy · 20VC: The Right Way For Founders To Think About Capital Efficiency, How To Create A Culture of Continuous Learning & The Secret To Talent Assessment and Optimisation with Mariam Naficy, Founder & CEO @ Minted · Mar 2, 2018 · at 11:46
Mariam Naficy, Founder and CEO of Minted, explains why online retail startups hit growth walls when paid marketing outpaces organic brand growth.
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“So my conclusion really right now is that there's this organic pace of growth that makes sense. And that sometimes if you try to inject capital too early to try to accelerate that pace through marketing, you end up with a marketing mix, which is so heavily weighted towards paid acquisition versus the sort of free and cheap channels that you end up with an unsustainable growth rate, which is probably why Some of the retail concepts online, you see they hit a point where they start to see massively declining growth rates or increasing marketing spend as a percentage of revenue.”
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