Yesterday evening I had the great pleasure to attend the Startupbootcamp Berlin mentor kick-off event. Just having become a mentor for one of the most effective startup accelerator programs I can safely say that this was a very inspiring event for me. I am really looking forward to the program, helping young companies do exciting stuff.
During the presentation, Angie (the new CMO) put out a really nice challenge for the mentors to think back in their professional careers and identify their biggest mistakes. As I have made quite a few I thought this would actually be worth a full series. So let’s see how many I can come up with.
I guess looking back all the way to the beginning, probably the biggest mistake I made was not getting enough professional, qualified advice early enough. Let’s rewind… I co-founded my first company (4ward Internetsolutions GmbH & Co. KG) back in 1996 at age 23. By today’s standards this is probably already a senior age, back then this was pretty darn young. It was actually the time when people in Germany did not really know what the Internet was and why one would need it, the average person was using a 28.8K (max 56K) modem to dial into their mostly local providers. Even our investor and access provider only had a 128KBit uplink for the whole city (they actually had to increase their bandwidth because of us eventually 😉 ).
So we were in the business of creating websites for clients, operate some portals and hack away using Java a large portion of the day. Our main attention creation vehicle was Java midlets (these little things that ran in your browser – Netscape 2.0 back at that time). We got quite some organic traffic from winning awards, being featured by partners and press and the like. The internet was still really small then, so our website operated on a Pentium 100 (I think 64MB RAM) which would happily take all the load.
So while we received a lot of attention, getting actual business done was really hard. Even our biggest client back then (Georgsmarienhütte Stahl) was only worth something like €10K. So we needed quite a bit of business to sustain our cash burn rate of about €16K (5 employees plus 2 partners, office, car, etc).
Through our network of supporters (one of the things we did really well) and partners we received really amazing business leads. I still remember our meeting at Siemens that wanted to license our eCommerce solution. My hair was quite long and I was everything buy appropriately dressed for that meeting, not actually wearing a hoodie but something pretty close to that. Obviously the deal did not happen (I really wonder what they must have thought when we walked in there). Other deals were very similar. One of the calls I remember was with a guy from Dell (still really small back then) who also wanted our eCommerce Applet but could simply not justify buying it as it only worked in Netscape 2.0. We had a nice chat and then just hung up the phone agreeing the the solution did not make sense for them.
Boy – how can you be soooo stupid. I guess we were just so totally overconfident.
Thinking back I wish we would have had someone with a good portion of relevant experience and credibility on their back simply giving us a big slap in the face, forcing us to adopt the solution to Dell’s needs. While it would have been a major shift in technology, it could have made all the difference and possibly it would have been worth all the effort. We were really to blind and too young to see what the customers really needed.
Another request we received (do not remember from where) was to write an auction system for the web. Back then I seriously thought this was a totally stupid idea as nobody was going to any auctions in the real world, why on earth would they want to do that in the web??
And so on…
So in essence, we were great at technology and we had no clue how to run the business effectively. Eventually we got an advisor in at a very late stage – too late to turn things around. In the end the company got sold for a totally different reason, but that is not the topic of this post. I think if a programme like Y-Combinator, Startupbootcamp or similar would have existed back then, things would have turned out very different for us. I can only encourage every young founder team to seek as much advice as they can get, ideally in an accelerator programme – but any other credible source will be helpful as well.
Like Alex Farcet was saying last night, in the end it is the startup teams that decide about the faith of their companies – we as mentors can only be their candid advisors.