@Sotoventures’s Linkedin Post on: What I learned from my 2004 “startup” failure.

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“Wow, I’ve been at it for a while…I’m freaking crazy”…is what I thought to myself when my dad came down stairs this Christmas with one of my old SotoCom Wireless polo shirts. It was a reminder about how long I had been in this game (entrepreneurship) and how far I “had come”. It was a reminder of the spirit that I decided to live by over 11 years go; I was willing to endure whatever sacrifice and pain I had to in order to pursue my dreams of being a technology company business owner — who by the way, was neither an engineer or “traditionally trained” business person. All I new was that I was a hustler and was not scared of no-one but myself. I was a Psychology major in undergrad and pursued a masters in Marketing Communications in grad school; I was far from a Harvard MBA.

As soon as my dad handed me the white polo shirt I took a pic and posted it on
Instagram — which turned out to be a great idea because in an attempt to make the shirt “look nicer” my dad put it in the washer and forgot to take out the colored clothes that were in there; needless to saw the shirt is no longer white.

So, a little bit about SotoCom…

It actually started during my senior year of undergrad at FSU. I met a venture capitalist who was working on some wireless internet tech called Mesh Networking, and wanted to bring a version of the tech to higher edu via a startup venture. He recruited me to assemble a team and we spent that year working on trying to launch the company; we called the company Campus Communications.

Of course, these things always take longer than expected. The engineer that we recruited was flakey and made every excuse in the world why he wasn’t getting things done — which I learned quickly was par the course with 98% of the engineers that I partnered with over the years — this was my first experience with it.

My graduation date was approaching and I had to make a decision about what to do to survive while we were still working our “venture”. The VC was bootstrapping the tech expenses but not our salaries, which was fine cause I loved the idea of sweat equity. I ended up landing a gig at another Atlanta, GA based startup doing software consulting within the medical software space called Nuesoft.

The year was 2004 and I still remember getting the call from the VC. He quickly explained that Mesh had been sold to Motorola for a few hundred million dollars, we no longer had access to the tech, and that it was time to shut down Campus Communication. I was pissed because we never had a chance to bring it to market.

As you can imagine this was saddening news. I was only in Atlanta, working at Nuesoft in order to buy time while Campus Communications was supposed to take off. I remember being bummed for a days but then decided to take matters into my own hands and use what I had learned to launch my own service.

I learned a decent amount of what technology was required to setup a wireless internet service and could speak to it well. So after a few sleepless nights I came up with the idea for SotoCom Wireless, which offered WiFi or wireless internet access to off-campus student housing in partnership with property owners, management, and developers.

This was before everyone got into the wifi game and the big boys took over.

The business model was simple — in my mind of course. I would tap into T1 bandwidth and depending on the number of units, it cost me an average of about $15k-$20k to deploy a wifi network on a property. It would then take me a few months to break-even, by embedding a fee into the rent. After I broke even I would profit share with the property ownership and simply maintain the hardware, etc. All my prospects loved the idea and were willing to give it a shot.

Being that I was a sales/marketing guy and it’s all I knew how to control — and there was no doubt in my mind that this venture would succeed — the first thing I did was start developing all my marketing assets.

I had very little money — Nuesoft was paying me $28k per year — I was barely getting by. So between compiling what ever money I had together and my credit cards, I hired a designer at work to help me.

Although he was awesome, it quickly became too expensive and I had to find other resources. After some networking aka partying in Buckhead — a popular Atlanta neighborhood — I met a neighbor who had a contact who would do work for me at a very cheap cost. But as I quickly learned, you get what you pay for and the only way I could get stuff done on time was having to drive to this person’s apartment and sit in front of him.

The caveat was that this gentleman happened to live in one of the worst ghettos in Atlanta. So what did I do? — you guessed it, I would get out of work a few times a week and on weekends drive all the way down to his neighborhood, and get sh*t done. I figured I grew up in Miami and was used to rough neighborhoods.

After a few weeks of work I had a logo, website and kick ass collateral that spoke to a product that didn’t exist! So I thought to myself, what do I need now…? Well you guessed it: branded polo shirts! By this time my credit cards were maxed out and I had little cash. So I decided to ping my new friend and see if he had a hook up for very cheap polo shirts; luckily he did! — I think I ordered like 100 polo shirts for like $100 bucks!

At this point I had enough assets to be able to market and sell my service door-to-door. However, I still lacked the most important part: the actual product.

In any case I figured I had enough to be able to look like I was a real company. So during my lunch breaks I would drive over to Georgia Tech University and try to recruit engineers to join my team on sweat equity of course.

I spent countless hours putting up flyers and interviewing CS and EE majors of which most were just trying to get sponsored for a visa in order to stay in America.

It was super draining and I thought I would never find someone to at least help me. And after a few false starts, I ended up meeting an engineer that seems to be perfect. He was a double major in CS and EE and doing his PHD; and he was Puerto Rican so I figured we could party together and eat well (I’m of Cuban decent)!

Here I was, 6 months into this new venture nearly broke emotionally and financially and I thought I had finally found my partner! He was having some housing issues so I gave up my apartment and gave him a good rate. I thought things were on track. I even took a night job at Barnes and Nobles in order to make more money.

I invested in some technology that would allow us to test a building in order to gauge how much hardware we needed to install and I sent my new partner down to visit some prospective clients down in my old college town of Tallahassee, FL.

I sent him down with great t-shirts and collateral thinking that this was going to be it; the business was finally going go take off.

Well, I was wrong yet again.

I learned that he didn’t do much after sending him on this business trip and shortly after he move out of my apartment, leaving it in shambles, taking all my equipment with him, and basically never to heard from him again.

This was the end of SotoCom Wireless.

After becoming very lost and depressed I left Atlanta a broken 22 year old man, with maxed out credit cards and wondering what the hell I was going to do with my life.

I had tried my very best with the all the knowledge I had at that time. I had no one guiding me, was just living off instinct — and now I had to figure out my next move.

Luckily I got into graduate school and within a few months a launched another company called MyTripz; which is another story for another day.

blueline

It’s interesting when I look back at my professional life and relive these times in my head, how many mistakes I made and am tempted to make now days. I still make similar mistakes today because I either think that I am better and able to over come them or they disguised themselves as something else.

Look, I know we are not perfect and we WILL make mistakes but it’s imperative that you develop a strong awareness of your behavior and surroundings. Learn from your past and make sure you as aware of what is going on as possible. I am NOT suggesting that I know the answers – I don’t – and I don’t believe that there is only one way to become successful in business. However, I have learned a few things to be aware of while operating within an entrepreneurial life.

Here are a few that I learned from my SotoCom experience:

1) Startups always take MUCH longer to build than you think

Building a tech company takes time. There are always bugs, you are always one feature away, and recruiting the right team is nearly impossible. Work your ass off but be patient. Expect delays and plan for them — both financially and emotionally.

2) In-person meetings are important at the very start

When trying to get an idea off the ground meet in person as many times as possible. It’s important to get you all in a room, get to know each other, see how everyone deals with pressure and stress; which will be an important part of your company’s survival.

This goes for contractors and service providers too. It’s weird how complacent people are even when you’re paying them; especially if they gave you a “deal”.

3) You can’t build a company with zero in the bank

I get that there are rags to riches stories that surface. However, if you cant pay rent or eat and you need money to keep the lights on, it is highly unlikely you are in the mindset required to make tough decisions for your startup company. When you take the leap of faith make sure you have some reserves in the bank account. Try to plan out how you will spend your money and how long you have before you near zero.

4) Build technology first, then marketing assets

I know people have raised money with pitch decks and pretty logos. I have had the best logos and websites in the world and even customers ready to buy. Guess what; it doesn’t matter.

No technology, game over.

Over the past few years I have embraced the concept of the MVP or minimum viable product. Which for me is the basic product that someone would pay for.

Once you get to a working MVP then I would begin working your marketing assets; which by the way will change quickly as well.

5) People flake, but don’t take it seriously

People are human and not everyone loves your idea like you do. Moreover, not everyone is willing to sacrifice the way you are over an idea.

Figure out who is real or not and cut the fat QUICKLY.

6) “Side projects” or moonlighting is REALLY Hard

It’s not impossible but very hard. Be ready for the challenges that come up with this. Keep it clean and respect your current employer. Don’t give them a reason to be pissed off at you for your side work.

7) You can’t “sell” someone into co-founding a startup, they need to want it and want it bad

I am always so guilty of this because I am such a high-energy guy and get really excited about ideas. I have also historically wanted it so bad that I was willing to suffer for it. Bottom line is that this is a marriage and relationship, not happy hour or a one-night stand. It takes strong commitment from all parties. You can introduce an idea to a potential partner but they are going to have to want it bad. Needless to say, it will only get harder and they need to endure the tough times because they want it not cause they were convinced to.

8) Be kind to yourself, strive for success but be ok with failure

I know this is easier said than done, but be kind to yourself; I struggle with this every day. I know how hard it is to regain perspective and remember how hard you have been working and often times how far you have come. I do believe that this is very important when living an entrepreneurial lifestyle.

I have heard that living this lifestyle is a decision that we make, however I’m not sure that’s totally accurate.

For me, creating things whether it be business, music, art is one of the only things that has ever made sense to me in this crazy life of ours.

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