By Casey Verderosa
Every knowledgeable entrepreneur achieved success by first stumbling through and learning from a series of mistakes. Three of Rev Ithaca Startup Works’ Entrepreneurs in Residence shared their worst blunders at June’s True Confessions-themed networking night.
The one that got away
Moderator and Rev director Ken Rother was co-running a software business in the 1990s when he and his partners decided they wanted to become a product company. They had plans to start a website building business similar to today’s Square Space when, on the eve of the company’s launch, they learned that Microsoft had just acquired a website builder.
Daunted by this big player’s entry into their realm, they abandoned the project. “Basically, we just rolled over and died,” said Rother. Now he advises startup founders to see discovering competitors as a good sign – “If someone’s already in that space, that means you’re not crazy!” he said – and to stay in it to fight the good fight.
The moral quandary
Entrepreneur in Residence Brad Treat’s experience was a mistake that almost came to pass – an ethical dilemma he shared with the audience. His company had developed a software program – “Skype before there was Skype,” as Treat called it – that could be sold with webcams before they were a standard feature of computer monitors. They had a chance to do a live demo with a successful webcam company, but there was one problem: the company’s cameras weren’t very good and didn’t do their software justice.
One of Treat’s business partners had the idea to take the guts out of a competitor’s higher quality camera and reattach them to the webcam company’s camera for the demo – without telling the webcam company. They had a board-level discussion and the board was split. As CEO, Treat recalled some advice a mentor had once given him: “Think carefully about every decision you make because it will define you.” Rather than using their self-dubbed Frankencamera or a competitor’s camera, in the end his company decided to go a third route –they purchased a high-end movie camera to use for the demo and they got the deal.
The cautionary tale
“People know me as ‘the lawyer entrepreneur in residence,’” said Nate Cook. The lesson he wanted to impart upon the audience was about the importance of doing your due diligence, and when people hear him tell this story they think it’s the lawyer in him talking, he said. But his advice is based on his biggest mistake – committing to a business deal without examining every aspect of it because he was so trusting of his partners, one of whom was a family member.
“We were supposed to acquire $20 million in assets on the cheap but instead we lost a ton of money,” said Cook. “That lesson of losing everything left a real impression on me.” As a result of this experience, he advised entrepreneurs to do what he’s been doing ever since: take a close look at every document related to your business venture.
Join us for these upcoming events
Rev’s networking nights will return in August, with our Hardware Accelerator Demo Day on the first of the month. All are also encouraged to attend the 76West Clean Energy Competition pitches in Binghamton from August 7-8.