Search Engine Marketing (SEM - PPC)

"It's very, very tempting to "experiment" and "test" various paid customer acquisition channels. You start with AdWords, then do some cheapo banner ads on a couple of ad networks, and soon you're hooked on some hard affiliate stuff and paying thousands of dollars a month to an Outsourced Program Manager.

AdWords are a gateway drug to unprofitable user acquisition. Only start throwing your dimes at paid acquisition when you're damn well sure your dimes-into-dollars machine is humming nicely. And you only really know it's humming nicely until you have enough metrics around your unit economics -- what your costs are to serve every new customer, and how much she's worth to you in revenue (if you're rigorous, gross profit). These numbers have to come from real users using your real product; they cannot come from a financial model -- that's just guessing. Get hard data. Then and only then can you think about customer acquisition channels that have direct costs above zero. Until then, you're much better off engaging in inbound marketing -- making remarkable content (you blog regularly, right?) and a remarkable product -- and really thinking about your on-site SEO. "

Snagged from Sachin Agarwal. He is operations lead at Oneforty, the Twitter App Store, and CEO at Dawdle, the gamer's marketplace.