Creating a Small Company from Scratch

Creating a lifestyle company

I have been activity trying come up with an idea for lifestyle company, but hesitant to take any action. A blog post by Noah Kagan titled “How to create a million-dollar business this weekend”, was the motivation I needed.
Below are the steps I’ve taken, mistakes made and lessons learned.

Step 1: Find a problem; Create a solution

I live on a busy street with constant noise and light. In order to combat this I purchased earplugs and a sleeping mask. To my dismay, I soon realized that the poorly made mask digs painfully into the ears and the fabric suffocates my eyes with pressure. Frustrated I think, there has to be a better way to block out light from the eyes. Finally, I had a problem that I needed solving. My solution removed the straps and heavy fabric replaced by a thin cover over the eyelid.

Step 2: Discover potential market size

I used Google Adwords to search for terms relating to the product. The goal here is to see if there are enough potential customers to sustain your business. For example, the ad group “Sleep Eye” had 9,160 monthly searches. With Adwords quoting the cost per click (CPC) to be approximately $1.25, I could get a lot of potential users for my budget. First mistake: I did not calculate the lifetime value of a customer, a key metric for any e-commerce business.

Lessons Learned from Adwords

  • Calculate customer acquisition cost and lifetime value of the customer.
  • Use Adwords coupon, receive $100 credit after spending $25.

Step 3: Buy a domain

I chose to not spend time focusing on a great name because this is a product concept test. The purpose of buying a domain is for customers to visit the website and possibly volunteer information. wasn’t available so I bought for $13.

Step 4: Create a landing page on

I was naive to think that creating a landing page would be easy. There are thousands of variables that can affect how customers perceive what you’re introducing them to. Building one from scratch will take much longer than a weekend.

Lessons Learned from Landing Pages

  • Save time and purchase a pre-made landing page
  • Create a video for product; people hate reading
  • Be overly clear and concise in your message

Step 5: Design an Advertisement

Admittedly I did not spend enough time focusing on this aspect and was constantly changing it throughout the campaign. The message must be short and to the point. It is crucial to get your pitch in, while at the same time using the key words that people search for.

Lessons Learned from Advertisement Design

  • Come up with a clear message for the ad before the campaign. Do not edit it throughout this creates flawed data.
  • Include keywords in the landing page text so website is listed on the first page of Google.
  • SEO, learn it, love it, and live it.

Step 6: Run Campaign

Finally time to see if the users within the ad group are interested. Start the advertising campaign and watch the email addresses role in!

Step 7: Analyze Results

After several hours into the campaign I checked on the results. To my surprised none of my ad budget had been spent. The problem: No ads had been placed on the first page of users search results. The actual bidding on this ad placement was much more expensive than initially calculated by Google. The actual CPC was an average of $4.50, 3.6x more than expected.

Final Results:

29 clicked through. This number would be great if 200 people saw my advertisement making the CTR 14.5% (29/200). However, 11,218 people saw my advertisement, making the CTR a dismal 0.26% with an average CPC $3.53. No small company selling a product for under $200 can afford such a high cost of acquisition through SEO.

Total pages views were 77 with a conversion rate (email address given) of 2. When combined with the data from the Adwords campaign it is clear, people did not want my product.

Step 8: Move forward or kill product idea

Kill: The cost of customer acquisition is too expensive to sustain any working business model.


I am happy that I took action and followed this interest. Instead of reading and day dreaming about trying this out, I did it. Although it ultimately failed I was able to learn how to test a product. Moreover, becoming more familiar with Adwords and Landing Pages was well worth the $50 spent. If you have an idea it really doesn’t hurt to try.
Ryan Canale

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