Lessons From A Dot-Bomb CEO

by Aaron Simmons

The best “mistake” of my life taught me a lot about how not to run a business. You see, I have a confession to make: I’m a Dot-Bomb CEO. Here’s the story of Midwestern Cybertising, and the lessons I’ve learned:

Prior to 1994, the Internet existed as pages and pages of text, with hyperlink shortcuts that brought you to other pages of text or to new sections on the same page of text. Text, text, text. Not bad if you like to read, but people today would hardly recognize it as “the Internet”. Then, a little program called “Netscape” changed everything by making the Internet a visual, multimedia experience. That moved it from the world of computer nerds and placed it firmly into the hands of businesses and consumers alike.

Enter Midwestern Cybertising. Some friends and I realized that this could be the new media for customer service and advertising, and jumped right into creating our own web development company. It was the classic garage biz — all of our HTML and graphic design was completed in my bedroom at my parent’s house! Our monthly server fee of about $15 comprised our entire operating budget.

One thing that I am proud of to this day is that my friends and I were YEARS ahead of the curve. If you can believe it, our biggest obstacle was trying to convince businesses that it would be valuable to have a web page! Our entire company consisted of three people — two of us planned to return to college at the end of summer break — unless, of course, our company made us phenomenally rich.

Unfortunately, our company did not make us phenomenally rich. By the end of summer, we had sold only one account (for $500, which we were never able to collect), and had one additional prospect that we were unable to close on. Eventually, we lost interest in our company and moved on to pursue other interests.

Here is what I learned from our adventure:

You are not in business to make money. You are in business to help other people or businesses — just don’t do it for free. Being clear about what your business does and how it benefits your clients makes it a lot easier for you to sell your services and products. My friends and I constantly had trouble explaining why it was necessary for businesses to have web pages as a matter of customer service. We saw only a money river and jumped in. It never occurred to us that we’d have to explain to people how badly they needed our services. We figured they knew.

Marketing is a start-up business’s most important activity. When we started our business, the first thing we did was incorporate. That used up almost all of our start-up money, and in hindsight did nothing for us. We were three college kids who had nothing; if we were to lose everything we had in our business, we wouldn’t have lost anything. In the end, our business imploded because nobody knew who we were or what we did.

Plan to fail or plan to succeed, but have a plan. Planning is a critical step in starting a business. By the time you’ve invested your first dollar in your business, you should already have a clear idea of what your business’s primary product or service is, how much you plan to charge for those products and services, who your ideal clients are, where you expect to find those ideal clients, how you plan to contact those clients, how much goods or services you must sell this month (and next month and the month after), and how many prospects you need to contact to make that happen. Time is critical for a start-up business. By doing detailed planning before you begin, you can hit the ground running. My friends and I did our planning all summer long — as much as 90 days after investing in our business. By the time we had worked out the details, we had to return to school…which brings us to the next item:

Give it your all, or don’t give it anything. Don’t have something to fall back on. If a business is worth starting, it’s worth giving it all you’ve got. My friends and I approached our business as a hobby for the most part, thinking it would be neat if we made a lot of money at it. We never seriously considered dropping out of school to build our business. But, if our business had actually grown as well as we thought it would, quitting school would have been necessary. So before we’d even begun, the business lost out to our education.

Ability isn’t enough. I don’t want to brag, but my friends and I were truly cutting-edge. We utilized all the latest technology, had beautifully designed pages, and were utilizing search-engine optimization (SEO) before it was even being talked about. If ability was what makes a successful business, you would have read about us in Time magazine. However, it is sales and marketing that bring in the clients. After all, what good is it to be the best if nobody knows about it? Ability brings satisfied customers back, but sales and marketing brings them in the first time.

One final lesson I would offer is this: If you learn from everything you do, nothing you do is in vain. I have never started another business, and may never again. But I’ve never regretted my experience with Midwestern Cybertising. I learned a lot from the experience, and not only what not to do. I have also learned a lot about the right things to do, too — in business as well as in life.