Seven years ago, I started a company called Utipia with two other people: a fellow journalist, and a talented developer who happened to be my brother. We wrote a business plan, raised some money from friends and family, incorporated, and built a working demo to show how our clever content could be cleverly delivered to the web sites of our nonexistent partners.
Unfortunately, we knew next to nothing about business. Probably our biggest mistake was not getting somebody on board, right away, who had experience starting and running a small company. Our second biggest mistake was trying to start a content company just as the dot-com market was imploding. We burned through half of our seed funding, couldn’t raise any more money, and couldn’t get any traction in the increasingly cautious market of 2000. Bad timing! We also wasted a lot of time and money on nonessential “accoutrements” of doing business in Silicon Valley: a Delaware incorporation, a polished business plan that used all the right buzzwords, a splashy demo at Demo. All bad moves. So, after about a year of suffering, we folded it up and returned what was left of the money to our investors. I returned to consulting and journalism, sadder but wiser about the ways of business.
Now it looks like Dan Gillmor has learned a similar lesson. He had higher-profile backers than Utipia did, he had an experienced business partner, and to his credit it looks like he was able to attract a significant (if smallish) audience to his site. But he made a lot of the same mistakes we did with Utipia. Among those mistakes: Relying too much on big-name partnerships that never materialized. Getting distracted from the project’s central mission. Believing that covering business as a journalist makes you qualified to run a business. And, trying to hang on to your identity as a writer and journalist while simultaneously wearing the hat of an entrepreneur.
I wish Dan well. As for myself, I know that if I ever start a company again, I will do a few things differently. I will stay focused on a more manageable goal, expanding the scope of the mission only once we have solid enough footing to support that. I won’t incorporate unless it’s absolutely necessary (and if it is, I’ll do it myself, without engaging expensive lawyers if at all possible). I’ll focus on generating revenue — any revenue — from day one, rather than placing all my bets on partnerships that may not materialize. And I’ll bring in more expert business help earlier on.