Keep in mind that this is coming from personal experience. I was once involved with the development of a startup. Our company was focused on the burgeoning market for wireless application development and my two partners (both of whom I had worked with already at another corporation) and I were quite excited to get away from the boring routine of working for others.
Our first mistake was not locking up a major client before we jumped ship. We were in discussions with a major company in San Jose that we had worked with previously during our time at the corporation. We got them interested in developing their particular product on a wireless platform and they wanted to pursue it further. We got so excited over this potential that it became the driving force for us to leave the corporation and start our own.
That turned out to be a grave mistake…after we had started up, the company then proceeded to drag their heels on the development and after 5 months of work, they pulled the plug. We were screwed.
Our second mistake was jumping in with an incubator without doing due diligence. We had been in discussions with a local company that was looking to move into the incubator business. They wanted us to be the first client and we jumped at the chance since they offered us good rental prices, an amazing boardroom plan, and great office space.
Another bad mistake…the incubator turned out to be a group of idiots who couldn’t run a hotdog stand if their life depended on it. The office space took around 4 months to complete. The amazing boardroom never materialized…we ended up meeting clients with a table that looked like it came out some elementary school. They had no technical support and we ended up providing that service to them. Worse still, they never drafted up a formal lease agreement, even after we had repeatedly asked for one, and when we left, they harassed us for “charges” for the use of the boardroom and other facilities.
Our third mistake was turning down contracts to develop projects outside of the wireless arena. Because we wanted to be focused, we had turned down some lucrative contracts to develop web applications that were not necessarily associated with wireless technologies. We ended up kicking ourselves for that one when the money began to run dry.
Finally, our biggest mistake was probably the fact that we jumped into a hot technology that fizzled out quickly. Don’t get me wrong…I still believe that wireless applications will still be critical and in demand…it just didn’t happen then for us. For the life of us, we simply could not convince clients at the time to shell out big money for the development of wireless applications that didn’t even have a platform ready yet. We were not large enough to be a global entity so we couldn’t take advantage of the exploding wireless application market out in Europe and Asia.
On a final note, we ended up alleviating the pain by spending our last days on the roof the building smoking weed. I guess there was one good thing coming out of the experience.