Foundry is a premium business intelligence publication featuring 551 articles from the best founders and investors. Topics cover leadership, strategy, fundraising, growth, AI, and more.

What topics does Foundry cover?

Foundry covers leadership, investing, AI and technology, product development, founder stories, mindset and career, marketing, hiring, fundraising, strategy, and more. Articles feature insights from founders like Elon Musk, Jeff Bezos, Sam Altman, and Jensen Huang.

Can I submit a story to Foundry?

Yes. You can submit a story at thefoundrybrief.com/submit. Foundry publishes articles featuring insights from founders and investors across all industries.

Spencer Rascoff: Should Startups Buy Ads? Zillow's Co-Founder Has a Surprising Answer.

By Spencer Rascoff · Leadership · 1 min read

Rascoff says most startups waste money on ads. But there is one specific moment when buying ads is the right move.

Key Points

Do not buy ads before product-market fit — you are pouring gas on a broken engine
Buy ads only when you have proven organic demand and need to accelerate
The signal: people are already finding you without ads. Now pour fuel on that fire.

Ads accelerate what is already working. They do not fix what is broken.

The Waste

Most startups buy ads too early. They have 100 users and think ads will get them to 10,000.

Rascoff says that is wasting money. If the product is not retaining organic users, paid users will not stay either.

You are pouring gasoline on a pile of wet wood. Nothing catches fire.

The Right Moment

Buy ads when organic growth is already working. People are finding you. Sharing you. Coming back.

At that point, ads are fuel on an existing fire. They accelerate proven demand.

Zillow waited until they had millions of organic visitors before spending on ads.

Ads accelerate what is working. They do not fix what is broken.

The Test

If you turned off all your ads tomorrow, would you still have users?

If yes, your ads are accelerating real demand. Keep spending.

If no, your ads are hiding a product problem. Stop spending. Fix the product.