I asked many successful Internet entrepreneurs about lessons they learned starting and running Internet companies. I asked for their best decision and their worst mistake, and I received many insightful replies. Here are responses from Doug Camplejohn, Mark Pincus and Boris Veldhuijzen van Zanten (also see
Part 1,
Part 2).
Doug Camplejohn
Doug is the Founder and CEO of spyware security company,
Mi5. He started his previous company, MyPlay, a digital music locker service, in 1999 and sold it to Bertelsmann in 2001. Doug has spent over 14 years in various Product Management and Marketing roles in Silicon Valley including Vontu, Epiphany and Apple Computer. Doug posts as
camplejohn in the Startupping forums.
Best Decision(s):
Going with my gut, especially when it comes to co-founders and hires. I've started two companies now (myplay and Mi5), and had the good fortune to have great co-founders in both. I had choices for co-founders that optically might have been a better fit, but went with someone I trusted first, and the result has been two true partnerships that have stayed strong through good times and bad. My best hires have generally been folks that may not have been the best on paper, but my gut said "yes" to.
Worst Mistake(s):
Making decisions based on fear. There's a lot of noise coming at you in a startup, from investors, advisors, partners, people trying to sell you services, etc., and most every time I've gone with a decision because of fear it's been a mistake. I've approved partnership deals out of fear that we'd be left behind competitively, green-lighted hires out of fear that we would miss a deliverable if we didn't have a warm body in a seat, and grew too fast because of the fear that if we didn't "get big/fast" we’d be toast (1999 anyone?).
Mark Pincus
Mark is the founder and CEO of
Tribe Networks. Tribe's mission is to enable individuals and communities to connect and transact. Previously, Mark was co-founder and CEO of
SupportSoft (formerly known as Support.com), a publicly traded enterprise software company. Before that, Mark co-founded FreeLoader, the first web-based push service, which was aquired by Individual, Inc.
Good decision:
Fairly early in the development of support.com, we were faced with a tough decision. We had a $1 million purchase order from Morgan Stanley to provide an electronic software distribution (ESD) system. I chose to walk from that contract even though it represented the first and only revenue opportunity for our company that year. I had to fight my entire team and even some directors. It was the right decision because I knew that ESD was what I called at the time the 'Vietnam' of enterprise software. You could go in but never come out. In other words, it was fool's gold. The reason the opportunity was available was because no company could successfully solve this problem for enterprise IT groups. Nor could any company sell this software profitably. Accepting the PO from Morgan Stanley would have put us in a permanent IT support role, on call for their IT department.
We rejected the Morgan Stanley opportunity and went on to launch a helpdesk support automation product a year later which was far more profitable and the basis for the company's broadband support product today, 10 years later.
Bad decision(s):
I have more choices for bad decisions. Selling my first company, FreeLoader, to Individual inc. rather than pursuing a deal with Yahoo who was also interested. I believed that Yahoo (which was worth $800 million and had been public for 6 weeks) was grossly over valued.
Shorting the three public internet companies in 1995 and holding on as they went straight up until my brokerage account reached zero.
Taking investments from angels that I didnt need, especially friends. Advice - resist this urge. It is a losing proposition. Either you're successful and then they all took the risk and believed in you early on (so you owe them). Or you're unsuccessful and then you also owe them because you lost their money.
Boris Veldhuijzen van Zanten
Boris Veldhuijzen van Zanten is a successful serial Internet Entrepreneur, even if he won't admit it. He started his first company,
V3 Redirect Services, in 1997. V3 gave away redirect urls like
come.to/boris, listen.to/music and surf.to/eric. He sold V3 in 1999 to
Fortunecity.com which was about to go public on the Neuer Markt. In 2003 he started a Wi-Fi Hotspot operator in the Netherlands, called
HubHop, which was quickly acquired by
KPN. Since then, he has started several projects and companies including
Junker.nl,
Preople.com,
The Next Web Conference and
Fleck.com. Boris blogs at
The Internet Entrepreneur.
Best Decision
Age 15 I decided to drop out of school and set my own course through life. Against the advice of all my teachers and most adults around me (except my parents) I left school to attend the circusschool. In 3 years I learned how ride a 2 meter high unicycle, juggle 7 balls and a lot of other interesting things. At age 17 I wanted to go to art school and cleaned toilets for a year to pay for my art courses so I could apply for the academy. I was accepted and graduated Cum Laude 5 years later. My best decision was to do all these things. It was the best way to prepare for being an Entrepreneur. I learned discipline and perseverance in the circusschool and how to 'think different' and use my creativity in art school. No MBA could prepare you better.
Worst Mistake
It was a really bad mistake to hold on to my 600.000 shares in Fortunecity which I received between 1999 and 2001. These shares were worth as much as €19,80 when I first started receiving them (do the math) and dropped all the way to €0,04 by 2003 (please don’t do the math!). I went from poor art student to paper multimillionaire and back again within a very short time.
So why didn't I sell? Because I trusted my instinct. I trusted my instinct when I left school as a kid. I trusted my instinct when I went to art academy and when I first started my business. I kept going when most people said I was crazy working with that internet stuff and I always knew that one day we would sell our company for millions. And then we did. After that it was very hard for me to ignore my instinct and sell those damn shares.
Sure, lost of people told me I should have sold them. But as an entrepreneur you cultivate your stubbornness and learn how to trust your instincts. You will just have to learn that your instincts aren't correct about everything. That was an expensive lesson…
Thanks again to Doug, Mark and Boris.