I would advice Internet startups to not spend money on marketing (banner ads, Adwords, startup events etc.) when they are starting. In fact, spend more time in building a great experience (story, site, product, support - all touch points) for your users. This might take time but could be worth it in the long-term.
If the experience is good they will share their experience with other people - tweets, WOM, likes etc.
We are entering (or already have entered) the Recommendation Age. It is so easy for anyone to just Google your company or product/service. If good things are mentioned (blog reviews, tweets etc.) they will come to your site and start their experience. If you can manage that experience well then they will eventually buy from you. And these are people who will stick around with you for long as they have a relationship that is weaved-in with your brand.
The more awesome the experiences the deeper their relationship becomes over time…