I’ve been having this conversation a lot lately with founders: “Why isn’t this channel working for us?”
And honestly? Sometimes the answer isn’t that the channel doesn’t work. It’s that you’re too early.
Let me explain what I mean by that, because I think this is one of the most misunderstood concepts in early-stage SaaS marketing.
The false positive vs. false negative problem
Here’s what typically happens: A founder starts investing in a marketing channel – let’s say paid ads – and one of two things occurs.
False positive: You get a bunch of trials or signups, and you think “Hell yeah, this is working!” But then those people don’t convert to paying customers. Or worse, they convert but churn within a few months. The channel looks like it’s performing on the surface, but when you dig into the actual trial-to-paid conversion rates or long-term retention, it’s dramatically underperforming your organic baseline.
False negative: You spend money on ads, get minimal results, and conclude “Ads don’t work for us.” But actually, the channel could work, you’re just missing other critical pieces that would make it effective. Maybe your activation experience isn’t converting trialists well. Maybe your product isn’t retaining customers long enough to justify the CAC. Maybe your messaging is attracting the wrong audience entirely.
Both scenarios are incredibly common, and both can lead you to make expensive mistakes.
When surface-level metrics lie
I see this pattern repeatedly: Companies look at their acquisition metrics at the aggregate level and make decisions based on incomplete information.
For example, you might look at “cost per trial” across your entire ads program and think you’re doing great. But what if you dug into the campaign level? You might discover that some campaigns generate tons of trials that never convert, while others generate fewer trials but those people actually become long-term customers.
The campaigns that look “expensive” on a cost-per-trial basis might actually be your most efficient when you measure cost-per-paying-customer or customer LTV.
The lesson: You can’t evaluate a channel at the aggregate level. You have to get granular – campaign by campaign, segment by segment – to understand what’s actually working and why.
So when are you “too early” to a channel?
Based on working with dozens of companies at this stage, here are the signals I look for:
1. Your product can’t close the deal
This is especially true if you’re product-led growth (PLG). If your activation rates are sitting at 15% or lower, spending money on acquisition is basically lighting cash on fire.
I worked with a founder last year who was insistent that 15% activation was normal and couldn’t be improved. “No one else is doing better,” he told me. “It’s impossible.”
Except it’s not impossible at all. After we did the work to optimize their activation experience, their conversion rate doubled. Completely doubled. And suddenly, every channel they were testing became twice as efficient.
Here’s the thing: If you can imagine getting double the customers from the same number of trials, that’s infinitely more efficient growth than continuing to pour money into acquisition when half your signups are falling out of your funnel.
The question to ask: Is the channel failing, or is your product failing to activate and retain the people the channel is bringing you?
2. You don’t know which customer segments convert best
Early-stage founders often tell me they could target five different customer segments. And sure, maybe all five segments could use the product. But which one is going to stick around? Which one gets value fastest? Which one is willing to pay more?
If you don’t know the answers to those questions, you’re going to waste a ton of money testing campaigns across all five segments when maybe only one is actually viable right now.
3. Your retention is a dumpster fire
If you’re losing 50% or more of your customers within the first six months, please – please – don’t go spend $20K/month on an acquisition channel yet.
I don’t care how much funding you have. Spending money to acquire customers you can’t retain is the fastest way to burn through cash while creating a false sense of momentum. Your MRR might go up for a few months, but then it’ll plateau or even decline as churn catches up with you.
Fix retention first. Then scale acquisition. (For more on understanding your retention, check out why revenue cohort retention is the sneakiest chart.)
4. You don’t have baseline data on what channels your customers come from
I can’t tell you how many times I’ve asked a founder “How do your best customers find you?” and gotten a shrug in response.
Do the customer research first. Run 10-15 customer interviews. Ask them about their journey – how they realized they had a problem, what they did to solve it, how they found your product, what made them choose you over alternatives.
This research doesn’t take six months. It takes a few weeks, maybe a month if you’re slow to schedule. But it will save you from spending $50K testing channels that your customers would never use anyway.
But channels stack – they don’t work in isolation
Here’s the other thing people forget: marketing channels aren’t independent systems. They work together as part of an ecosystem.
Ads feed into your website, which feeds into your product, which feeds into your email nurture, which might loop back to retargeting ads. Partnerships might drive webinar registrations, which get promoted through email, which get amplified by SEO content.
When you evaluate a channel in isolation, you’re missing the full picture.
For example, imagine you run a partnership program. Those partnerships don’t just generate direct referrals – they might also drive webinar registrations. Those webinar attendees become email subscribers. Those email subscribers might see your retargeting ads later. Some eventually start trials. It’s all connected.
So when you evaluate whether partnerships are “working,” you can’t just look at direct attribution from partner referrals. You need to understand how partnerships influence the entire journey.
The takeaway: If you’re evaluating a channel purely on last-touch attribution, you’re probably wrong about whether it’s working.
The right time to invest in channels
So when should you invest in scaling acquisition channels?
Here’s my checklist:
- You have strong retention – at minimum, you’re retaining 60%+ of revenue after six months, ideally closer to 80-100%+ after 12 months
- You understand your customer segments – you know who converts best, who pays more, who sticks around longest
- Your activation rates are healthy – if you’re PLG, you should be converting at least 20%+ of trialists to paid (if you’re not there yet, work on activation first)
- You have qualitative data – you’ve done customer interviews and understand the actual journey people take before they buy
- You have hypotheses about which channels make sense – based on your research, you have educated guesses about where your customers hang out and how they make buying decisions
If you’re checking most of these boxes? Then yes, it’s probably time to scale acquisition.
But if you’re missing more than one or two of these? You’re too early. Invest in getting these fundamentals right first.
When conventional wisdom doesn’t apply
Here’s something that challenges the conventional playbook: lead generation.
Most SaaS advice says “don’t waste money on lead generation – focus on demand generation and sales-ready leads.” And that’s solid advice for many companies.
But what if your sales cycle is really long? Like, years long?
In some markets, buyers take years to be ready. They need to experience certain life changes, reach certain business milestones, or develop specific pain points before they’re even in-market.
In those situations, generating leads from people who aren’t ready to buy right now might actually be smart strategy. You’re planting seeds and staying top-of-mind so that when they are ready, you’re the obvious choice.
The point: Context matters. What works for one company in one market might not work for you. Don’t blindly follow playbooks – understand your specific situation first.
When you’re too early for different reasons
There’s another way you can be too early to a channel, and it’s not about false positives or negatives. It’s about strategic timing.
Some programs and channels require a certain level of maturity to work:
Partnerships and community can be too early if you don’t have enough traction for the network effects to kick in. You need a critical mass of users, customers, or audience members for these programs to really work.
Outbound sales can be too early if you don’t have enough validation that your product can stand on its own two feet. If you’re still figuring out your messaging and positioning, burning through a sales team’s time with a half-baked pitch is expensive.
Content marketing / SEO can be too early if your positioning isn’t clear yet. You’ll end up creating content that misses the mark and waste months building the wrong foundation.
The pattern? These programs work best when you have other fundamentals in place first. They’re not bad channels — they’re just multipliers. And multipliers don’t help much when you’re multiplying zero.
A final word on being too early
Look, I get it. When you’re an early-stage founder, you feel this pressure to “just start executing.” You see other companies running ads or building big content machines, and you think you should be doing that too.
But here’s the truth: You can’t toe-dip into this. You either commit to doing it right – which means having the fundamentals in place first – or you’re going to waste a lot of money learning lessons the hard way.
Some companies get lucky. They skip steps and it works out. But that’s not the norm. The norm is spending $50-100K over six months only to realize you were missing critical pieces that would have made everything more effective.
Do the foundational work first. Understand your customers. Fix your retention. Optimize your activation. Build a solid baseline.
Then pour gas on the fire.