This contradicts my last note but hear me out. First, I will start with the corporate life cycle as explained by one of my favorite professor bloggers – Prof. Aswath Damodaran! He shares that companies have different lifecycles and their priorities and therefore valuation is determined by these lifecycles.

It starts with “Start-up” (stage 1) where a business idea is being designed to meet an unmet need all through to “High Growth” (Stage 3 – convert potential to revenue and finally Decline (Stage 6) where we scale down the business.

I do still believe accretive revenue and profit is a better and more accountable KPI for media contribution to a portfolio’s health, however, my hypothesis is maybe we make it either the the primary or secondary KPI depending on the company lifecycle. I would prioritize growing user first above all as a “start-up”, “young growth” and “high growth” company, however, I need to have a very in-depth understanding of my business’ cash flow and as a result must learn, in-market, my way to understanding Year over year contribution of my media investment to revenue & profit. This allows me to flip the switch when I need to.

My hypothesis is those who understand what their media spend is doing, can quantify it in context of their cash flow (revenue and profits) and know what to expect as they increase it by 1.5x, 2x, 5x fold are much better equipped to grow to and succeed in stage 4 – “Mature Growth”.

You begin as questions like what financial contribution is organic vs paid search? is the 8 ROAS (Return on Ad Spend) from my instagram spend reasonable?, what exactly is the financial role of having Key influencers in my campaign? if not financially helpful then is it something else and what are my plans for the “something else”? and many more. A lot of these questions are “academic debates” today at universities, in media agencies and of course on LinkedIn.

So, accretive revenue and profit is still important and cash is still king, however, I need to be highly aware of where I am in the lifecycle and what is most relevant in the short and mid-term as I grow.