Thoroughly enjoyed this post, especially since I remember a lot of these events as they happened. I was peripherally involved in the startup also for a good amount of time, and absolutely agree with everything he's said. I would also add that a big reason we had trouble getting off the ground was that Jon was really the only serious coder we had. The rest of us involved in the startup had skills in other areas (marketing, graphic design, etc), which although useful, were really NOT what the project needed at that point.
I would also say we probably fell in love a bit too much with our first idea, and probably held onto it too long.
Oh, and think (1) low cost, (2) sustainable, and (3) ability to monetize. We had #1 and #2 down pretty well, but had absolutely no real concept of how this thing could possibly make money. Most startups are NOT going to get taken over, so unless you are in it for non-$$$ reasons, it is probably a good idea to at least come up with some way you can profit if you manage to attract an audience but not a buyer.