This year marks the 25th anniversary of Stardock! As the founder, President, and CEO of the company starting from the time I was a college student, I've made a ton of mistakes that you can learn from. Below is a list of both small and large errors I have made over the years.
#1 Computer Hardware becomes worthless
It is really difficult to admit that a perfectly good monitor, keyboard, mouse - or even PC - eventually becomes worthless. Over the years, I tried to find increasingly ridiculous uses for old hardware simply because I couldn't stand the wastage. If you have a company of more than 100 people for enough time, you can imagine how much old hardware stacks up.
Sure, you can donate some of it, or try putting pieces on eBay, but for the most part, you will spend far more time than it's worth trying to find a purpose for it once it is ready to be put out to pasture.
#2 There is no perfect office setup
We have spent countless thousands of dollars over the years on "Office Systems". These are desks, cube walls, and all kinds of other things that are designed to create an efficient, yet comfortable, environment for your colleagues. There are some great articles out there with many different ideas. However, you will find that these ideas come and go based on how fast technology is moving.
Incidentally, once used, these office systems are worthless from a resale value. When times change, just bite the bullet and be prepared to invest in a new "system".
#3 It is better to own a piece of a valuable thing than all of a worthless thing
In my younger days, I frequently made the mistake that I see countless entrepreneurs still making. It isn't the percentage you own of something that matters - it is the value of what you own that does.
One of my favorite stories is the story behind Impulse. Stardock was the first company to engage in what we now call digital distribution. Defined as being able to purchase, download, and install a piece of content (a game, a piece of software) from an integrated app store, Stardock in 1998 was way ahead of its time. The very first game that was released at retail and digitally was Galactic Civilizations in 2003.
Seems smart so far, right?
During this period, we had numerous requests to invest in us, but I said no because I didn't want to give up stock to "strangers" (this is one of those issues of having grown up poor; I was very unsophisticated in business early on).
Using our own profits, we built up what became Impulse. Despite it having a multi-year lead in both technology and market availability, it ultimately was eclipsed by Steam, which had vastly more capital available to it (and more importantly, Half-Life II). Ultimately, we sold Impulse to GameStop, which did bring a tremendous return on our investment, but still nothing compared to what it could have been had I been more sophisticated when it mattered.
Capital is king.
#4 It's a business, not a cause
Most Entrepreneurs I've met are driven by something. In my case, I was animated by a desire to see IBM's OS/2 succeed. Stardock nearly went bankrupt in the 1990's because, despite knowing that Windows was going to obliterate OS/2 in the long-run, I was emotionally invested in OS/2. Luckily, we survived this folly, but only barely. Despite Windows NT 4.0 coming out in 1996, Stardock didn't migrate to Windows until three years after, which is an eternity in the technology industry.
#5 Attitude matters more than talent
I have made many bad hiring decisions over the years. To the point that I rarely, if ever, get involved in hiring. As CEO, my job is to find and recruit people more talented than I am (which admittedly is a low bar...), but that isn't the same thing as hiring them. If we define talent as "intelligence x conscientiousness x experience," then we will define "attitude" as their ability to act as a force multiplier on the organization.
People who know me will tell you that I have a distinct lack of insight into people's character. That is, I tend to like everyone I meet and if they are talented, I tend to fixate on that. This is why in the past decade or so, after the recruiting process, I largely step aside to let people with greater empathy and insight evaluate the potential new colleague.
However, no matter how talented a person is, if they are toxic to your organization, they can actually reduce your company's overall productivity. If you have a hard time judging the attitude of someone, get a good HR manager who can. Your job as an entrepreneur is to identify talent and recruit them. But it is not a requirement that you are able to determine if they're a good fit.
#6 Know when to let go
I literally grew up in a dying steel town. Seeing the parents of friends lose their jobs in Detroit during the 1970's and 1980's had a significant impact on my attitude toward laying people off. This attitude nearly ruined Stardock when we moved from OS/2 to Windows because we had to let a lot of people go in order to make that transition, and I was just not prepared to do that.
Rather than laying off a few people early on, I ended up being forced to lay off a lot more people later on instead in order to migrate the company from OS/2 to Windows. If I had simply made the hard decision early rather than waiting, I could have saved several jobs (and several friendships).
If you ask someone in banking who has dealt with "work out," the #1 cause of businesses failing is not being able to downsize employees. The companies will cut all kinds of pointless things ("Let's get rid of air conditioning!") to save pennies when the the right call is really to let someone go.
In the technology industry, layoffs are particularly aggressive because of its rapid evolution. Let me give you a really obvious example. For much of my career, I had an "Executive Planner". This was a person whose job was largely to keep me on schedule. I remember when Soren and I were starting up Mohawk and on my first visit with him I brought my Planner with me. She was very organized, very professional, and personable. But now, just 5 years later, it would be ludicrous to bring on a human being to do what my iPhone or Surface can do far better.
Lots of permanent jobs have gone away as we have specialized or automated ourselves. Only you can decide where to draw the line on keeping people who have been with you many years, but whose jobs are no longer make sense in your business, or having to make a painful cut. But knowing where to draw the line might mean the difference between success or failure for your business.