Cut ad spend from $50K to $10K a month to look profitable before selling

Josh Peleg… try and push the budgets as high as you can go. And in fact, one of the first questions I'll ask when I'm getting to know a founder for the first time is I'll ask, "What's your marketing budget?" And they'll tell me, I don't know, 50k a month. And then my second follow-up question is always, "How high have you been able to push that? And if you're not pushing it, why aren't you pushing it?" So, knowing the answer to that is very important.

Josh PelegThere's a flip side to this where the founder can also optimize for profit. So, let's say they're running at spending $50,000 on marketing month over month. They think about selling, so they're like, "Hey, I want to sell a profitable app because I'll get a better multiple." They cut marketing from 50 to 10. And once they cut marketing from 50 to 10, they still kind of run off of the cohorts they previously bought. But at some point, the downloads are going to follow that drop as well. So it can be a problem as well.

Josh PelegSo, I'd say, if I was to categorize, for anyone listening, what's more dangerous, optimizing for profit or revenue, I'd always say it's more dangerous to optimize for profit because you don't want to mess with your download stream. It's better to optimize for revenue.