Lessons from a failed startup

Albert Einstein once said, “the only source of knowledge is experience; information is not knowledge.”  There is blend between the two though – it is possible to gain knowledge from others’ experiences.  I’d always prefer to be an armchair failure than a real failure and save my real effort for success, but that’s not always possible.

At WebFund, one of our key criteria in evaluating entrepreneurs in new ventures is their experience in failure and what they’ve learned from it.

Mark Goldenson posted an excellent article Venturebeat yesterday called “10 lessons from a failed startup“, which should be required reading for wannabe entrepreneurs as well as angels.

His lesson headlines are:

• Find quick money first
• Content businesses suck
• Know when to value speed vs stability
• Set a dollar value on your time
• Marketing requires constant expertise
• Control and calculate your acquisition costs
• Form partnerships early, even if informal
• Plan costs conservatively and err on the side of raising too much
• The key to negotiating is having options
• Knowing isn’t enough (you’ve got to experience)

I don’t agree with everything he says, but he makes some excellent points which should be viscerally understood before entering the game.

Related posts:

• What is a startup company worth?