Leon Benson @LeonBenson2: What is the biggest mistake entrepreneurs make?
One time I started a company and raised a quick $30 million and bought a bunch of companies and then tried to go public and then it went down in flames and everyone lost everything.
Another time I started a company and raised $0 and everyone made millions.
I’ll tell you the difference between the two companies. Money.
Not how much money I raised. But how much I thought about it.
When I started the first company above all I would think about was how much money I was going to make. I was already spending it. I had it all planned out. I was even looking for apartments. I was planning out what my personal Super Bowl commercial would look like. I was going to ask Spike Jonze to direct it. I was wondering what kind of private jet I would buy.
What did the company do? You might ask. Well, I don’t know. I bought a company, then two, then three. They all seemed to be in the “wireless Internet” space. But I had no idea what they did. We tried to go public. CS First Boston was going to take us public. They came back to us and said, “we have no idea what you do.” Nobody in upper management (where I was CEO) had a clue what we did for a living. Were we even making money? I had no idea. We had $30 million in the bank. Who cares? I tried to sell the company. We could’ve sold for maybe $50 million. Not enough! We were going to go public for a billion!
And we lost everything.
The second company started during a period when I had almost nothing in the bank. The second I started the company I stopped checking my bank account like I was obsessively doing every ten minutes of the day to see when it was, exactly, the moment that I would disappear and die.
I started to love what I was doing. I came up with more and more ideas for the site. I wanted the site to be perfect. I kept adding more features. It was perfect. Yahoo loved my site. AOL did. I went up to Google and they loved it. Reuters loved it. Everyone did. People would write me and say, “please remove my account from your site because I’m too addicted to it.”
Not once did I check my bank account. I knew I had value. I was creating more and more of it every day. I had no more need to worry about when I was going broke. Even though venture capitalists were calling me every day I said “no” to all of them. And eventually I sold the business and was very happy. And, without my love pumping into the site every day, the site quickly degenerated. I feel bad looking at it now. It’s ugly.
The biggest mistake entrepreneurs make is the biggest mistake people make when looking for a spouse. Don’t think about money. Fall in love.