Ask HN: What was your biggest business mistake?

I created a helpful product that 9 out of 10 users said they would recommend to a friend, with about 1,000 paying customers. I was too shy to market it or advertise it anywhere, though. I got dejected after being declined from YCombinator in Spring of 2007, and on top of that, my dad was laid off that August. I decided to make the program free to focus on a job I started, and I stopped maintaining it soon after.

Another is that I got into the iPhone Store beta program in March of 2008 due to this product, and purchased a MacBook Pro to learn Objective-C. I felt it would be correct for me to quit my job right then that March and spend the next few months creating an app to release to millions of iPhone 1G and 2G users while app expectations and competition was very low. I didn't want to deal with the stress and negativity from my dad of quitting my job just six months after starting it, having dealt with that negativity for years. I was also doing some dental work and the job had a $2,000 dental insurance. Instead, I created mockups for the company I worked for that were shown to the COO/CIO, thinking I could maybe get a bonus money. Instead, my manager was promoted. I applied to UMass that same March in case I wanted to go back to school in September, which is what ended up happening; the idea being that college was a good place to find a co-founder. Although I ended up winning one of the two entrepreneurship competitions here, the overall feel of a state school is to get a job, not do something entrepreneurial.

I'm about to make a third business mistake: trying to get into the grad school so I can continue working on the front-end of a rails app I'm already doing undergrad research with right now.

The problem with being a single founder is that there are so many people trying to tell you you're wrong, and with increasing intensity, that even if the signs are all positive it can eventually get to you. My customers love my product, and that's actually all that matters according to entrepreneurship logic. But when your parents or others don't see your customers, as well as pretend not to care in order to demotivate you from it, to them, it was like I was just home all the time.

While starting a ad driven website, we relied on Google Adsense. We were trying to bootstrap the site on very little funds. It wasn't until we'd been running for a couple of months that we dared to try and find local advertisers. In 1 month we were able to make more than double with local advertisements than what we had made the month before with Google Adsense. Our traffic didn't grow very much in that time, but local advertisers were much more willing to buy space on our site than we anticipated.

If I could do it again, I would try to book specific advertisers from day one. Slap a guarantee on there if necessary, but only use Adsense to fill in the gaps.

Where to begin? I'll pick one of my favorite mistakes: Cleverly avoiding a market that was ripe for the taking.

In the early/mid 90s I built a compressor called Quantum that outperformed PKZip by an average of 20% to 30%. For a few years it was the best-performing general-purpose compressor available.

Microsoft, Borland, Novell and a handful of other companies licensed it. Cumulatively it saved them hundreds of millions of dollars in cost-of-goods for disks.

My smaller mistake was to not apply for a patent. Quantum was the first compressor with a workable implementation of optimal parsing and about half of the improvement over PKZip was due to it. I was then (and still am) philosophically opposed to software patents but purely from a business standpoint possessing a patent on optimal parsing would have made it difficult for competitors. That said, I don't view the decision to not apply for a patent as being a mistake as much as a deliberate choice.

My bigger mistake was to ignore the retail market. I felt that PKZip owned that and going up against them would be foolish. Instead, I took the low-hanging fruit of selling to software publishers. It was a handful of boutique sales (which one man could do) instead of attempting to penetrate the retail market against a strong, established competitor (which seemed intimidating.)

Except... I was completely wrong. PKZip never made a concerted effort to build a usable Windows version of their product. Phil Katz didn't like Windows and so PKWare was slow to evolve the product from a shell wrapped around the DOS tool into a first-class Windows app.

The world needed an easy-to-use compressor for Windows. An improved UI and support for additional compression formats extended beyond the scope of my original product but I could have done it without difficulty and I rejected the idea for the wrong reasons.

The market was ripe for the taking yet I cleverly convinced myself it wasn't worth trying and settled for less. Fortunately for WinZip they didn't make the same mistake and they quickly rose to a dominant position.

Sure -- email me at hello@launchbit.com. Cheers!

I put in more than full time effort for three years as a partner building a small business in a country where I couldn't actually own it. In the end all I could have was a private agreement with my local partner... but I didn't realize that until I was already emotionally and financially committed to the enterprise.

In retrospect, I learned a great deal from it and am doubly motivated to become a good programmer and have a stab at the software business. It was a costly way to learn, though.