Starting a Company: Lessons Learned Part 1

The first business I ever tried to start was with a friend of mine. I remember the original idea was quite simple and we could have made it happen with a couple of hundred dollars and time, which we had. I remember discussing it with my friend and we decided there were two options. He looked at me and asked me, "Do you want this to be big, or do you want it to stay small?"

If I were more experienced I would have said to start small and then build, but instead I said to be big. We began our quest to try and build our operation. We had a friend who was studying business in college and I got approved for an Amex card to get started.

Our foolishness and naiveté led us down many wrong roads that eventually led us to debt which would take over a year to pay off with nothing to show for it. Here are some lessons I learned from that first venture:

If you must spend money, spend it on your product. Our goal was to produce a variety of web shows. This was prior to YouTube and even Justin.tv. To be precise we were trying to do this in 1999 when streaming video was extremely limited. We didn't spend our money on servers, webcams, or developers. We spent our money (credit) on office space, chairs, a file cabinet, desks, and eventually some of our living expenses. The only thing we purchased that could have been considered helpful in creating our product was a laptop, which we really didn't need as we already had a computer that we could've used.
Keep your job if you can. My friend and I were both working when we started. After a few months we felt like we weren't getting anywhere. In order to free up our time to develop our business we asked each other the question of whether we should quit our jobs. At the time I was still living with my parents, so for me to quit was not a big hardship, but for my friend, he was living 5000 miles from his family. There was no fallback for him. At the time we decided to pray for an answer to that question. The next day we went into work both wondering if we were going to give our notice or not. On the way to work we both prayed for a sign from God on whether to quit our jobs. As we walked in the alleyway of the hotel where we worked, the dumpster had big white letters spray painted on the side that read "God Said NO!" We should have listened. Instead we laughed thinking there was no way God was literally going to spray paint a message on a dumpster.
Don't spend money on employees when you don't need employees. For some reason we felt like we needed to expand even though we had yet to produce anything except for a few audio clips that were actually quite funny. We decided to hire 3 sales agents. They would work completely on commission so there was nothing out-of-pocket, but we decided to buy them all a cellphone. At the time cellphones weren't nearly as popular and not everyone had one. We insisted on getting the best phones on the market at the time and gifted them to them. They would never need them.
Sunny Delight can make for a great treat when frozen. As things got dire for our company, we started living at our office. We moved my friend's remaining belongings to the office since he had to give up his apartment. We had a mini-fridge we kept in the office with a few things to sustain us. My mom bought us some food when she would go shopping to help support us. One time she bought us a case of Sunny Delight. We put a few in the freezer to see how they tasted. That became one of our favorite treats.
Research and don't be gullible. Grasping at straws to save our company we tried to get some angel investment money. Not knowing any local investors we looked up a company in New York City that specialized in angel investment. We decided to take a trip and see if we could make some magic happen. We didn't call or try and set up a meeting. Instead we left for NYC hoping to "pop-in" and meet with an investor who would give us $100,000. When we got to NYC, we realized that not only did we not have the address of the firm, but we didn't even know the name of it. So, we spent the afternoon getting lost in the city, then left for home.
Listen to those who know. There were many people who tried to help us along the way. All of our "sales" agents tried to convince us not to get them phones. We had an experienced business owner look over our business plan and we ignored his advice. We almost partnered with a technology team for streaming our video, but were unimpressed with what they could do, even though it was probably the best that could be at the time. We let our own egos get the best of us an ignored those who knew better.

Over about six months, we built a company. We didn't build a business. We never made any money, and in fact went into about $15,000 of debt. My friend lost his apartment and most of his possessions except for his car. I agreed to pay off the debt which took over a year thanks to the fact that I still lived with my parents. Our company name was GoBotswana. We decided on that one day when we were coming up with a plan for if the company didn't succeed. What would be our strategy for paying off the debt? We jokingly said that we would just pack up and go to Botswana. I guess the final lesson to walk away from this story with is that if you want to make a company, make sure there is a business to back it.