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Startups · Marketing · Entrepreneurship

How I Grew a Tech Company From a $1,000 Ad Test

It started with a small test. In 2022 I spent around $1,000 on Facebook and Instagram ads to pre-launch Sigmaschool, before the curriculum was even fully built. That test told me more than months of planning could have. Here is the step-by-step playbook I have used since, and how you can apply it to your own venture.

Deric YeeDeric Yee 9 November 2026 7 min read 16 min video

Prefer to read? The full article is below. Watch on YouTube.

The short version

  1. 1Validate demand with a small ad budget and a landing page before you build the product.
  2. 2Use first principles to find your customer's deepest need and biggest fear, then build a no-brainer offer around them.
  3. 3Give value before you ask for anything: lead magnets, free courses and useful content warm people up.
  4. 4Know your numbers, cost per acquisition, conversion rate and lifetime value, and only scale spend when the maths works.
  5. 5Keep margins healthy and stay obsessed with the product. Delivery is what turns customers into advocates.

The $1,000 test that gave me the green light

I did not have much money back then, so I could not afford to build something nobody wanted. I ran ads to a simple landing page describing the concept, a structured coding bootcamp in Malaysia, and watched what happened. To my surprise, we generated almost $10,000 in sales in the first month, before the product was fully built.

That instant validation was my green light to keep investing my time, energy and cash flow into the business. From there I leaned into what worked: a clear offer, an intense focus on delivering value, and a solid marketing funnel that brings people in, nurtures them and converts them at the end.

The lesson applies to anything you start, whether it is a new course, a new country or a completely new business. Validate first. Make sure people want it and are ready to pay before you invest heavily in building it. A small ad budget is one of the cheapest ways to find out.

Start from the customer's real need

When I founded Sigmaschool I asked a simple first principles question: who is our customer and what do they really need? People switching into tech wanted skills that get them hired. Their biggest fear was wasting time and money. That meant our offer had to be about outcomes, not a learn-for-fun course.

So everything was built around that. We stacked value: real coding projects, career coaching, hiring partners, mentorship from working software engineers. And we added a money-back guarantee. That promise scared us at first. My co-founder and I asked ourselves whether we could really deliver it. But I think a guarantee has to scare you a little to be meaningful to the customer. It flipped the risk onto us, and it shattered a lot of doubt.

This is the core of how I approach every business: solve the customer's exact pain instead of competing on price. Dig down to what the person truly wants, then build the product and offer around that.

“That promise was scary at first, and that's the whole point. It has to scare you for it to be attractive enough to your end users.”

Deric Yee, in the video

Do not ask to get married on the first date

On the marketing side, we treated the funnel like a finely tuned machine, and it started with giving value up front. We offered a free seven-day coding mini course and produced lots of free tutorials and career guides. When someone clicked an ad, the first thing they got was something useful.

By the time we mentioned the paid bootcamp, they already knew our name and had received value. It is the classic funnel principle: give before you ask. Then, at each stage, we asked what the person needed to believe to take the next step, and what proof we could show them if they were on the fence. Testimonials, press features and my own story of teaching myself to code all did that job.

This is the same principle behind our free trial today. If you are curious how funnels and lead magnets fit together more broadly, I go deeper in my marketing funnel masterclass.

Know your numbers before you scale

Once prospects were warming up, we measured the ads carefully. Early on I spent just a few hundred dollars and tracked exactly how many paying students came from it. Our early cohorts were heavily discounted, so the front end often only broke even, and that was fine, because we knew what each customer was worth over time.

When we saw that ad spend reliably produced students and the maths was clearly positive, I stepped on the gas and reinvested profit back into ads, ramping from hundreds of dollars a week to thousands a day. The marketer Sabri Suby puts it simply: if you can put $1 in and reliably get more than $1 out, you can keep scaling.

The point is not our specific figures. It is the discipline. Track these relentlessly:

01

Cost per acquisition (CPA)

How much ad spend it takes to win one paying customer.

02

Conversion rate

How many people move from each stage of the funnel to the next, so you know where they drop off.

03

Average order and lifetime value

What a customer is worth on the first sale and over time, including upsells and referrals.

Keep margins healthy

Our delivery costs were low by design. We taught in cohorts online, so one instructor could teach a group at once, and we avoided physical overhead. Combined with the systems, tools and curriculum assets we built, that kept our margins high.

I could have chased volume with cheap offers, but that would have sacrificed quality. Instead, we kept cohorts a moderate size and never slashed prices just to grow. High margins gave us a war chest to hire, to market and to reinvest in the product. Profitability is the engine that lets you reinvest. When our funnel stabilised, I put a big chunk of profit into new hires and new offerings, including an AI agents track and a data analytics course.

Obsess over delivery

After the sale, delivery is everything. I treated Sigmaschool like a product that needed obsessive improvement. We gathered feedback constantly. If a project idea did not work, we swapped it. If a concept confused students, we made it more hands-on and simpler. We brought in industry mentors, built a career services team, and asked hiring partners which skills mattered so the curriculum followed real employer needs.

When you make a promise like a money-back guarantee, you have to build the support system to back it up. And when customers have a great experience, they become your biggest advocates, which fuels word of mouth and trust far more cheaply than ads.

Steve Jobs showed that customers recognise and reward obsession with the product experience. Jason Fried taught me to stay scrappy and lean, no big offices or bloated teams until you need them. DHH's emphasis on building something people actually want and Naval Ravikant's idea of leverage through technology and people shaped how I think too.

Build an operating system so you are not the bottleneck

Sigmaschool was not built in isolation. In 2024 I co-founded an AI job matching startup and kept my web agency, Northstack, alive, pivoting it towards AI consulting. We moved from one-off projects, where you have to hunt for new clients every few months, to building AI automation tools for small businesses on a monthly subscription. Business owners love workflow automation right now, and I think that is a real opportunity. I wrote more about it in what you can build with AI.

Juggling several ventures forced me to step back from day-to-day work and build a clear operating system: company-wide goals, quarterly priorities, a weekly scorecard and weekly team meetings, similar in spirit to EOS. I hired a COO and senior instructors and split responsibilities. By the end of 2024 we had a team of around 15, which let me delegate operations and focus on bigger decisions like new courses and partnerships.

The playbook, in short

Validate before building. Test demand cheaply with ads and a landing page. Create a no-brainer offer that addresses your customer's biggest fear and stacks real value. Build a value-first funnel with free trials, content, webinars or events, and track your numbers relentlessly. Deliver obsessively so customers become advocates. Hire specialists as you grow so you can move from doing to deciding. Protect your margins. And when growth plateaus, do not coast: reinvest in the product and the funnel.

Building a company with AI everywhere might feel daunting, but it is also an advantage. People will pay for anything that saves them time, especially automation and learning tools. Keep up with trends, but stay anchored to solving real problems rather than chasing every shiny tool.

I have been where you are, working a day job and building on nights and weekends, doubting whether it would stick. Start small, validate fast and iterate. And remember Naval's advice: learn to sell and learn to build. If you want to add the building half, the free trial is a structured first step into real coding with AI.

Questions people ask

  • How do I validate a business idea before building it?

    Run a small ad budget to a simple landing page that clearly describes the offer, and see whether people sign up or pay before the product is fully built. Real money or real commitments are much stronger signals than friends saying it sounds good. If the test fails, you have lost a small budget instead of months of building.

  • What makes an offer a no-brainer?

    A no-brainer offer solves the customer's biggest pain and removes their biggest fear. Use first principles to work out what they truly want, stack enough genuine value that saying yes feels obvious, and reverse the risk where you can, for example with a strong guarantee. It should compete on value and outcome rather than on being the cheapest option.

  • Which marketing metrics should a small business track first?

    Start with cost per acquisition, how much you spend to win one customer, your conversion rate at each funnel stage, and the average and lifetime value of a customer. Together they tell you whether spending more on ads will make or lose money. Only scale ad spend once the numbers are consistently positive.

  • Why should a business give away free content?

    Free content and lead magnets warm people up. When someone gets real value from a free course, guide or trial before you ever ask them to buy, they already trust you by the time you make an offer. It is the funnel equivalent of not asking someone to marry you on the first date.

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