Taking the concepts of Tim Ferriss’ “4 hour workweek” to heart, HalOtis has undertaken a pet project, an experiment if you will, for a potential business idea.Â I’ve taken what I consider to be a mediocre product idea — in this case an e-book and accompanying software to try and sell online.
At this moment I’m half way through my market test.Â Here’s what I’ve done up to this point:
- I set a budget of $250 to test out this idea.Â Of which $200 is going into a Google AdWords campaign, and $50 max for domain names and hosting.Â Since I already know how to develop a website there’s no need for me to hire anyone to design sites, which saves me money.
- Â It took me about a week to think of an idea that I was satisfied had at least part of a chance of success.Â It’s an e-book and software bundle for stock analysis. (the product doesn’t actually exist)Â The price of $50 was chosen
- I used GoDaddy.com to find a domain that would match my product ($10) and purchased 2 months of hosting ($10).Â The GoDaddy account was up and running within a couple hours.
- Using Dreamweaver I designed a 3 part website. The landing page has a big sales pitch, it goes through the benefits of the product.Â The confirmation page confirms that the person is ready to purchase the book and software, and finally a purchase page which notifies the person that the product is still in development.
- I added Google Analytics to the pages and set up a conversion goal for anyone that goes from the landing through to the purchase page.
- Using Google AdWords I created a new campaign for the site.Â I picked out about 50 keywords, and designed 7 ad variations.Â Set the daily budget to $50 and my max Cost Per Click to $3.
- Sit back and wait for the advertising dollars to run out.Â Tweaking the ad campaign to improve performance is a good idea.
Here’s what I’ve learned so far:
- Thinking of a good idea is hard.Â You have to fight the instinct to do something original and find something for which there is already a market.Â Otherwise you’re going to have to create the market before you can sell anything.
- Writing advertising copy takes time.Â Choosing the right words and making it easy to read and follow is very important.
- Google AdWord money doesn’t go very far.Â In a niche category you want to be very specific in what keywords you use, but that results in very few impressions. Broadening out to use generic terms gets more visitors but they’re less targeted and cost more.Â At $1 per click I’d only get 200 visitors with my budget, and I’d also need a 4% conversion rate on purchases to break even on my advertising costs.
- It’s important to figure out your estimated advertising cost per visitor before determining the product’s selling price.
It’s a very educational process to go through.Â Even if this particular idea doesn’t work out, I will take the lessons learned and apply it to the next one to have a better chance of success.Â $250 well invested either way.