I don't really agree with this logic. If you're building something that people want, your target audience should reach far beyond friends and friends-of-friend

I don't really agree with this logic. If you're building something that people want, your target audience should reach far beyond friends and friends-of-friends. If people want something, they're likely looking for it via a search engine these days. Neglecting search engine ranking is neglecting a large amount of potential customers that you could likely be acquiring for a very low cost. I could make a counter case to your argument: If the majority of your users aren't discovering you via Google, your product doesn't have a wide enough audience to be viable.