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Channel portfolio strategy framework from Gaurav Agarwal

Article originally published in December 2023 by Stuart Brameld. Most recent update in December 2023.

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The 80/20 rule states that 20% of the work you do will deliver 80% of the value. At the same time, you can’t do everything.

All marketing channels have:

  • Different inputs – both time and resource
  • Different success levels
  • Different probabilities

So, how do you answer questions around acquisition channels such as:

  1. How do you decide which channels to work with?
  2. How can you shoot for the stars and avoid drowning?
  3. How do you maximise returns and hedge risk?
  4. How can you avoid putting too many eggs in one basket

Gaurav Agarwal (Chief Growth Officer at ClickUp) describes his Channel Portfolio Strategy framework. The framework is rooted in finance portfolio theory given his banking and finance background. In portfolio theory.

“Gaurav contends marketers aren’t evaluating channel risk properly. In doing so, they favor one-off growth strategies and waste money on high-risk channels. The smarter move is to hedge for more predictable and consistent results.”


Portfolio theory

In finance and investment, Modern Portfolio Theory (or MPT) is based on the idea that an investor can construct a portfolio of multiple assets that will maximise returns for a given level of risk. It’s a foundational theory in investment strategy and portfolio management.

Some of the key concepts in financial portfolio theory also apply to how companies should think about marketing channels, including:

  1. Diversification – by holding a variety of assets (or acquisition channels), you can reduce risk because the performance of different assets can offset each other. This means if one asset performs poorly, another might do well, balancing the overall performance.
  2. Risk-Return Trade-Off – there is a direct relationship between risk and expected returns. Higher risk is associated with higher returns and lower risk is associated with lower returns. Investors (and marketers) need to find a balance between their desire for the lowest possible risk and the highest possible return.
  3. Asset Correlation – this refers to how different types of assets (acquisition channels) move in relation to each other. In general, you want to avoid everything moving in the same direction under the same market conditions such that the benefits of diversification are lost, as this could mean all parts of your portfolio suffering loss

Gaurav argues that teams should treat marketing channels like an investment portfolio, and that the same thinking should apply.

Channel customer fit

The first step in any channel strategy is to list the channels where your customers would most logically be. If your customers aren’t on the channel, you won’t be able to acquire them there. Conversely if 90% of your customers are reachable via a single channel, it makes sense to focus your efforts there.

LTV & audience size fit

Customer Lifetime Value (LTV) and audience size often determines which acquisition channels are a good fit. Your customer LTV determines how many you can spend to acquire new customers. Your audience size is the biggest determining factor in whether to focus on 1-to-1 or 1-to-many acquisition.

If you are a defence contractor and can only sell to 50 governments around the world but LTV is in the hundreds of millions of dollars, mass advertising makes no sense and you should focus on 1-to-1 sales channels. Similarly, if you audience is huge but you have a $5 LTV, you’re unable to spend money on advertising and would likely look to acquisition via community, content growth levers or product growth levers.

Gaurav’s 2 x 2 matrix – Image source

Channel variance & risk

Within each channel (Facebook, Content, PR etc), estimate your potential high, medium, and low outcomes, given the volume and cost per acquisition variables. Evaluate each channel based on volume and the spread of potential outcomes.

As a simple example, if you choose PR as a core acquisition channel and go all-in on achieving New York Times coverage, the success level is high, you could be an overnight success. However, achieving New York Times coverage is extremely difficult hence worst case this completely fails, hence the channel variance (or spread) with PR is huge.

Conversely paid advertising, where you can put it $X to get Y leads and Z customers has very low variance.

Generate sales estimates from:

  • Talking with peers and mentors
  • Finding online case studies
  • Running small experiments

The difference between your best and worst sales scenarios is essentially your risk for that channel.

Channel diversification

Don’t put all your eggs in the same basket, because dramatic cost or platform swings in one channel or the next can ruin online sales.

Channel strategy & resource allocation

Your channel strategy larger comes down to your appetite for risk, and how you decide to split allocation across low-risk low-return and high-risk high-reward investments. Marketers and growth practitioners need to understand the level of risk they are willing to take, and construct a channel strategy that reflects that.

The goal is to layer multiple channels to decrease risk and ensure you meet the must-have target with a certain degree of predictability.

“You need to balance the risk in your channel portfolio, ….. and hedge it with channels where your returns are more predictable.”

Channel Strategy from around 23 minutes

In constructing your marketing channel portfolio you need to understand:

  1. What’s your minimum criteria for success? The assured sales
  2. What’s the upside? What’s the dream goal you want?

In general you want a mix of channel with high-spread and high upside hedged with lower-risk guaranteed channels Prioritise the low effort low risk, low cost channels upfront (the low hanging fruit) to limit your downside and hit the minimum success criteria – keeping the business running should require minimal resources.

Guarav suggests a 60/40 mix, with 60% of resource allocated to high-value high-risk channels (to improve topline and upside), and 40% allocated to low-risk, predictable channels (to meet your minimum). Once you have the certainty you can hit your minimums, your risk appetite will determine whether you spend remaining budget on high-risk investments for big upside growth, or stay the course with safer, more reliable channels.

From a channel perspective, understand which channels are for hedging, which are for upside, and which should be ignored.


To recap, the steps to create your channel portfolio strategy are:

  1. Create a list of all channels
  2. Add effort (time and money) needed
  3. Add 3 potential outcomes
    • Potential success (Average case)
    • Potential success (Worst case)
    • Potential success (Best case)
  4. State down assumptions
  5. Write down the spread

A reminder of the main takeaways:

  • Don’t put all your eggs in one basket
  • Diversify your channel mix by using channels that are not correlated
  • Understand the the average, best and worst case for each of your channels
  • Always experiment with new channels and test your assumptions.

And some key questions to ask yourself:

  1. Where is your audience today and where you can most effectively reach them?
  2. Are you allocating money to channels without prioritising them first?
  3. Which channels are your hedge/assured channels, which are upside channels and which are you ignoring?

Related content

  1. The marketing framework Clickup used to scale to be a $4 billion company https://www.hustlefund.vc/blog-posts-founders/the-marketing-framework-clickup-used-to-scale-to-be-a-4-billion-company
  2. Getting to $3m in ARR https://www.youtube.com/watch?v=eDrGzrNTUBg
  3. Go-to-Market Insights: Channel Portfolio Strategy with Gaurav Agrawal https://www.linkedin.com/pulse/go-to-market-insights-channel-portfolio-strategy-gaurav-chase-doran/
  4. [500Distro] Run Growth Like A Hedge Fund with Gaurav Agarwal https://www.youtube.com/watch?v=lIrWu0B70Yk