Footprint’s Channel Strategy: When to Exploit Arbitrage vs. Build Sustainable GTM

Footprint’s Channel Strategy: When to Exploit Arbitrage vs. Build Sustainable GTM

In a recent episode of Category Visionaries, Eli Wachs, CEO of Footprint, shared a framework that every B2B founder needs to understand: the difference between channels that save your company and channels that scale it. Footprint used Facebook ads arbitrage to survive their pivot, generating three dollars for every dollar spent. But Eli knew that window wouldn’t last forever.

“We could put a dollar in and get $3 out consistently. That was the engine that helped us grow from zero to about 10 million in ARR,” Eli explains. But here’s what most founders miss: while exploiting that arbitrage opportunity, Footprint was simultaneously building a completely different GTM motion—one that competitors couldn’t replicate even after the Facebook window closed.

Why Arbitrage Opportunities Have Expiration Dates

Channel arbitrage exists because of temporary market inefficiencies. In 2013-2014, Facebook had sophisticated B2B targeting capabilities but almost no B2B advertisers competing for that inventory. The platform was underpriced relative to the customer value it could generate.

“We basically said, we’re going to create a demand gen engine that is all about Facebook,” Eli says. “Back in 2013-2014, Facebook ads were incredibly cheap and incredibly effective.”

This created a perfect arbitrage opportunity: sophisticated targeting at consumer-level CPMs being used to acquire B2B customers with high lifetime values. The unit economics were obvious—spend one dollar, generate three dollars in bookings. Scale until the math breaks.

But arbitrage opportunities always close. As more B2B companies discovered Facebook’s effectiveness, competition increased, CPMs rose, and the three-to-one return compressed. What worked in 2013 became table stakes by 2016 and potentially unprofitable by 2018.

The companies that win aren’t the ones that found the arbitrage first—they’re the ones that used the arbitrage window to build something sustainable before it closed.

What to Build While the Window Is Open

Footprint’s Facebook strategy bought them something more valuable than just revenue—it bought them time. Time to build product-market fit. Time to prove retention. Time to develop the distribution moats that would actually scale the business.

The critical insight was recognizing what Facebook could and couldn’t do. It could generate qualified leads efficiently. It could help them get from zero to ten million in ARR. But it couldn’t get them to one hundred million. For that, they needed something structurally different.

While running Facebook ads, Footprint discovered their actual competitive moat: the three-sided network between their platform, retail customers, and CPG brands. “All of our customers buy products from CPG brands—Procter & Gamble, Unilever, Estee Lauder, Coca-Cola,” Eli explains. “Those brands want to sell more products through our retailers.”

This created an insight that would reshape their entire GTM strategy. “We realized we could go to these brands and say, hey, we have software deployed at 400 retailers. We can run a campaign on your behalf across all 400 of those retailers simultaneously.”

Building the Network That Actually Scales

The CPG partnership strategy represents everything that channel arbitrage isn’t: it’s slow to build, hard to replicate, and creates compounding advantages over time. It’s also the only way Footprint could have scaled to over one hundred million in ARR.

Here’s how the flywheel works: Retailers adopt Footprint for marketing automation. Once deployed, Footprint approaches CPG brands that sell through those retailers. The brands want direct access to retail customer data and the ability to run campaigns across multiple retail partners simultaneously. They’re willing to co-fund marketing initiatives that promote their products.

This creates a three-sided value exchange. Retailers get marketing technology with CPG co-funding. CPG brands get access to retail customer data and direct marketing capabilities. Footprint captures value from both sides while building a network that gets more valuable with each additional participant.

“It’s a differentiated distribution motion that is not replicable by any of our competitors,” Eli notes. This is the critical distinction from Facebook arbitrage. Competitors could copy Footprint’s Facebook ads strategy in weeks. They can’t replicate a network of 400 retail relationships and dozens of CPG partnerships that took years to build.

The Framework for Sequencing GTM Motions

Footprint’s evolution reveals a framework for thinking about GTM strategy across different growth stages. In survival mode (zero to ten million), optimize purely for the fastest path to revenue with the best unit economics available. This is where channel arbitrage makes sense if you can find it.

Use that initial traction to prove three things: your product actually retains customers, you can expand within accounts, and there’s a larger market opportunity than your initial beachhead. These proof points become the foundation for raising growth capital and building more sophisticated GTM motions.

At scale mode (ten to one hundred million), channel arbitrage won’t get you there. You need distribution advantages that compound over time. For Footprint, that was the CPG partnership network. For other companies, it might be marketplace effects, integration ecosystems, or category-defining content.

“That was really the point at which we said, okay, we’ve figured out product market fit, we’ve figured out our initial go-to-market motion, now we need to scale everything,” Eli reflects on their Series B. The capital from that round didn’t just fund more Facebook ads—it funded building the CPG partnership business, expanding into retail media networks, and moving upmarket into enterprise.

How to Recognize Your Sustainable Advantage

The hard part is identifying which GTM motion will actually scale your business versus which one just worked for your early traction. Footprint could have kept optimizing their Facebook ads strategy, trying to squeeze more efficiency out of a deteriorating arbitrage opportunity. Instead, they recognized the CPG network as their sustainable moat.

The signal is in defensibility. Ask yourself: if a competitor hired your entire marketing team tomorrow, could they replicate this channel in six months? If the answer is yes, it’s not a sustainable advantage—it’s either execution excellence or temporary arbitrage.

Facebook ads were replicable. Any competitor with budget could run the same campaigns, target the same buyers, and achieve similar results once they figured out the playbook. The CPG network was different. Even if competitors knew exactly how Footprint built those relationships, they couldn’t skip the years of earning trust with retailers, proving value to CPG brands, and demonstrating the network effects.

The Timing of Transitioning Between Strategies

The trickiest part of this framework is knowing when to transition from survival-mode GTM to scale-mode GTM. Transition too early, and you run out of money before the sustainable strategy generates revenue. Transition too late, and you’ve over-optimized for a channel that won’t scale.

Footprint’s transition happened around their Series B, when they’d proven product-market fit and initial GTM motion but needed to scale beyond what Facebook arbitrage could deliver. This timing isn’t coincidental—it’s when they had the capital and proof points to invest in longer-term distribution strategies.

The framework is about matching your GTM strategy to your stage. Early stage requires speed and efficiency above all else. Growth stage requires building moats that competitors can’t replicate. Each stage needs different channels, different metrics, and different time horizons.

Why Most Companies Get This Wrong

The common failure mode is falling in love with the channel that saved you. Companies find an arbitrage opportunity, scale it successfully, then keep optimizing that same channel long after the window has closed. They hire more people to do the thing that worked, build more process around it, and miss the signal that it’s time to evolve.

Footprint succeeded because Eli understood that Facebook ads were a means to an end, not the end itself. The goal wasn’t to become the best at Facebook advertising—it was to build a durable business that could scale to nine figures. Facebook got them to ten million. The CPG network got them to one hundred million.

Today, Footprint generates over one hundred million in ARR, growing thirty to forty percent year over year. Some customers spend multiple millions annually. That growth isn’t coming from better Facebook ads—it’s coming from the network effects and partnerships they built while the arbitrage window was still open.

The lesson: exploit arbitrage opportunities aggressively when you find them, but use the time and capital they generate to build the sustainable GTM motions that will actually scale your business.