SEO is one of many traffic channels, and since it's free, it's a great one.
For certain types of business, SEO is critical. For instance, if you have a long tail of index-able content SEO is really important.
Also, if there's one common search term that people would use to find you (say, "dating"), SEO is powerful, but only if you're in the first page of results. For many competitive search terms, you need to think hard about whether you want to invest the effort in trying to make the first page. There might be better uses of your time.
There are lots of non-SEO and non-advertising ways to get traffic, such as word of mouth, virality, white labeling, biz dev, and affiliate programs. You'll probably only be able to do one of these well, so pick carefully.
Thanks Bruce Mesnekoff