This is a story of eager investor, failing hope  and total business failure. Originally I was quite depressed about this, but now I consider this as one one of the most important lessons in my life.

Early 2005 I was asked to invest funds into an exiting new ecommerce startup. Business plan was solid, there was good competitive advantage over most competitors, I personally knew the founder and my overall feelings on this venture were good. Some of my friends did advice me against this venture due to excessive NDA/secrecy levels the founder insisted on, but I decided to continue. The investment went forth and I also became an adviser for this new venture.

Soon the business was started and marketing pulled people into the web shop. In just few weeks were we had good flow of orders continuously coming in. Things looked positive.

The company was however in dire trouble. Most of time and resources were used to create advanced systems & processes to support high levels of demand which were assumed to soon be there. Some key operations were outsourced and off-shored. Information flow within the company or towards investors was almost non-existent. Supply/Demand management was totally out of control and serious problems in customer satisfaction were starting to appear.

It was clear that something had to be done immediately. On top of my primary work I started working in the new company, trying to assist it back on track. Some problems were easy to fix, but it soon became apparent that there were critical problems in the way the business was structured and managed.

Finally I had to admit to myself that under current management the business was going to fail soon. And I did not have power to change things to the model which would have made more sense to me as the founder had majority control. And it was already too late. Ultimately the business failed, not with a bang but with sort of a sizzle as everyone just stopped working with the company.

In hindsight my mistake is clear. My great trust and hopes were quite misplaced and I continued to follow misguided vision long after problems became well apparent. Numerous danger signs  were visible at different times, but I ignored them all. Likely I didn’t want to face the truth so opposite to my hopes and world-view.

After the failure I was quite depressed for a while. I had put fair bit of money and large amount of time towards this venture. Pure business failure would have been more acceptable, but my failure in estimating people felt really bad.

Ultimately I was able to leave this episode behind and move onwards. Now I consider this as most helpful experience which made me realize how unpredictable people can be and how hope can blind us all. This also made me more critical towards my own opinions and more eager to ask opinions from others.

Key Lessons:

• Trust But Validate
• Do Not Ignore Small Warnings
• Information Is Power
• Premature Scaling == Disaster
• Cut Your Losses

Year was 1999 and while studying in the university we were deep-diving into the world of servers and web hosting. After provisioning some capacity from US data-center during hobby project we realized that we could repackage and sell this capacity for Finnish customers.

Soon we founded a company on this idea and named it Da Vinci Innovations. I think we picked name like this so we could also sell IT consultancy alongside hosting. In hindsight must say that for pure web hosting our name was not too great 🙂

This being our first company and us being typical “IT guys” we had really limited understanding of business, sales and marketing. Somehow we still muddled our way to customers, revenues and ramen-profitability.

Ultimately we scaled this company down as growth was fairly slow, competition was increasing very fast, and our university studies limited the time we could commit into this venture.

Internet was great. My first large application application combined Hotmail-style functionality with threaded discussion groups and media sharing. I was able to learn bleeding edge web technologies and core Internet protocols. This project was ultimately scaled down as we were unable to figure good product-market fit and decided to focus back on our university studies.

 
This project enabled me to find employment in the nascent dotcom economy of Finland.

While studying at high school we created our own Lycos-like web directory and portal service called NEXUS. We learned a lot and really recognized Internet as a major transformative force.