Why today's GTM capital allocation defines future growth

The headlines this earnings season are a mixed bag of success, missed estimates, and a 40% drop in companies presenting forward guidance. Meanwhile, executives and institutional investors continue to anchor on top-line revenue as a real-time snapshot of business health, when in many cases it is a delayed reflection of capital allocation decisions made four quarters earlier.

The current reporting season isn't a contemporaneous read, but rather the culmination of sales and marketing investments initiated 2-4 quarters ago. It creates a temporal disconnect executives can arbitrage if they're willing to act against consensus.

Temporal arbitrage and the mechanics of lag

Enterprise revenue is one of the slowest-moving indicators in business: subject to long sales cycles, delayed implementations, and deferred revenue recognition.

For instance, the median enterprise deal in B2B SaaS takes 92 to 180 days to close, with revenue often recognized one or more quarters later depending on ASC 606 compliance.

Go-to-market (GTM) investments typically don’t drive material impact until 2–3 quarters post-deployment. "Marketing-sourced pipeline" [a bogus concept] takes 1–2 quarters to convert into closed revenue.

What does this mean?

Today’s revenue headlines reflect the world as it was in Q3 and Q4 of last year—when inflation was cooling, buyer confidence was rebounding, and the Nasdaq was recovering from its correction. The economic conditions companies are navigating today are materially different.

Earnings reports as economic echo chambers

Algorithmic traders, sell-side analysts, and even corporate boards can fall into the trap of temporal simultaneity—interpreting earnings outcomes as real-time signals. But revenue reported in Q1 2025 is the result of:

• Direct response marketing activity in Q2 2024
• Sales cycles initiated in Q3 2024
• Implementation timelines executed in Q4 2024
• Revenue recognition rules applied in Q1 2025

This four-quarter causal chain means revenue is not a signal of current business health—it is a lagging artifact of earlier GTM conviction. Worse, guidance cuts today likely reflect pipeline softness rooted in Q1 2025—itself a result of growth investment throttling during the 2024 election cycle.

What would have to be true for revenue to be a forward indicator?

For revenue to serve as a real-time economic signal, all the following would need to be true:

1. Sales cycles would shrink below 30 days (rare in enterprise deals).
2. Revenue recognition would shift to cash basis.
3. Buyer behavior would become reactive, not budgeted.
4. GTM spend would yield immediate ROI.

None of these are consistent with B2B operating reality. Thus, revenue is at best a delayed signal—and at worst, a false compass for capital allocators.

GTM spend as a forward-looking asset class

Let's reframe GTM spend. Effective operators now treat GTM investment as lead-time-adjusted growth equity, not as discretionary opex.

The companies poised to outperform in late 2025 are the ones increasing GTM spend today, irrespective of macro turbulence—not the ones boasting strong revenue while operating in wait-and-see mode.

According to Bain & Company, companies that continued to invest and drive growth initiatives during the 2008 downturn significantly outperformed their peers in the recovery.

Bain's analysis of nearly 3,900 companies worldwide found that "winners" grew at a 17% compound annual growth rate (CAGR) during the recession, compared to 0% growth among "losers." Even after the downturn, winners maintained a 13% CAGR, while losers stagnated at just 1%.

Over a 10-year period, winners achieved three times greater enterprise value growth than their retrenching counterparts, translating into an average $6 billion advantage in enterprise value.

GTM investment is (sort of) a call option on future dominance—with a strike price denominated in current risk tolerance.

The anti-fragile GTM playbook: how to act now

For executive teams with the liquidity and governance flexibility to execute, this is a textbook environment for counter-cyclical moves.

Historical downturns show that companies who leaned into capability-building during recessions consistently outperformed peers during recoveries.

1. Capability acceleration

Rather than freezing hiring, selectively acquire high-performance talent displaced by competitor workforce reductions.

In past recessions, compensation expectations softened meaningfully as bargaining power shifted from employees to employers. During the 2008–2009 downturn, total cash compensation for sales roles in tech declined by approximately 10–15% compared to 2007 levels (Aon).

Today, despite some stability in published salary benchmarks, historical precedent suggests high performers are increasingly willing to trade cash upside for stability. Smart companies can now rebalance teams at normalized cost structures, before the next growth wave drives expectations back up.

2. Process re-engineering

Periods of economic uncertainty create rare organizational receptivity to structural change that would face resistance during expansion phases.

Bain's 2016 report, With High Stakes, Accelerate the Transformation, they highlight the importance of "reengineer(ing) how the work gets done":

"Complexity is at the core of high costs and ineffective decision making. To permanently reduce costs, managers often need to change how work gets done."

Now is the time to implement the operating model transformations that growth inertia previously deferred.

3. Customer Acquisition Cost (CAC) arbitrage

Historical downturns show that as advertising budgets shrink, media costs tend to decline significantly.

Even if 2025 data shows stability so far, historical behavior suggests that counter-cyclical ad spend today yields significant CAC efficiency gains that compound LTV economics over years.

To quote Sam Walton:

"I was asked what I thought about the recession. I thought about it and decided not to take part."

4. Strategic M&A

M&A outcomes are fundamentally cyclical. Companies that made major acquisitions at cycle bottoms (e.g., Salesforce's acquisition of ExactTarget in 2008; Oracle's aggressive post-2001 spree) gained structural advantages that persisted through the next bull cycle.

McKinsey found that companies that acquired aggressively during downturns, what they call "through cycle outperformers," made larger and more M&A deals during the 2008-2009 downturn and performed 10% better through the recovery.

With valuation compression still in play across VC-backed firms and upward of 20% of public companies in a zombie state (those unable to sustain operations without continuous borrowing), disciplined acquirers can consolidate capabilities at sub-peak multiples.

Misreading lag as signal is a governance failure

If revenue is the scoreboard, GTM allocation is the playbook. Boards and CFOs that cut GTM investment during lagging revenue periods institutionalize underperformance and miss the compounding return of counter-cyclical bets.

To outperform this cycle, the imperative is not to interpret today's earnings—it's to understand the gestation period of growth, and invest accordingly. That means treating GTM capital as intertemporal arbitrage, not quarterly expense.

In this market, discipline is good for survival. Investing while competitors are cutting is where the next decade's winners are made.