Dan Kite | Crain's Phoenix

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Dan Kite

Background:  

Workuity is Arizona’s largest co-working facility, featuring a just-opened office in Phoenix. Workuity offers short-term leasing options, allowing growing companies to expand their offices as needed, while eliminating the hassles of managing an office.

The Mistake:

We decided prematurely that we were going to obligate ourselves to this space, with the assumption that financing would be available.

At the beginning of the tech revolution, I had the opportunity to build a startup called Virtuem, which was a pop culture museum driven entirely by software – by video. I was really looking to redefine the museum genre, to some extent. In essence, it was a show where you really walked through a period of time.

We found a location in Chicago and decided prematurely that we were going to obligate ourselves to this space, with the assumption that financing would be available based on the real estate. That did not turn out to be the case.

So, we had to do a private placement. I was working with an investment banking firm and in the middle of my raise, the firm basically imploded. This was back in the Drexel Burnham Lambert period. The partners split and I was left holding the bag. I had done all the things that startups are supposed to do, like building a great staff. I had brought on executives from high-profile companies to build it.

At the end of the day, we had put a heck of a lot of money into this. The expense of building a startup, or raising money, was bringing in management and bringing in a whole team. It was a little bit different than now, where people are willing to back the young guy. It was a very different scenario than today. Back then, if you were 28 or 30, you were a baby needing supervision.

 When you’re using your own money, you treat it very differently than if you’re using someone else’s.

The Lesson:

The lesson I learned was to not get out over your skis. You still have to take things one step at a time. You can’t just rush to where you want to go without being aware of how you’re going to get there. The other part is that when you’re using your own money, you treat it very differently than if you’re using someone else’s.

Today, for example, a company may staff up to 150 people pre-revenue because they have that in their business plan. But when you’re an individual, you simply can’t do that.

I think right now I’m creating a business that’s geared toward helping others not make the same mistakes. One of the great things to know is that nobody can do everything on their own. No individual can succeed without great people around them. They can’t succeed as an island. In today’s environment, they have to network. They have to know other people. They have to be able to learn – not just from their own tough lessons, but from the tough lessons of the other people around them.

And you definitely cannot succeed without proper funding. That is for sure.

Follow Workuity on Twitter at @workuity.

Photo courtesy of Dan Kite

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