Transmutable Postmortem
Now that I have the perspective of a little time away from being a freshman CEO, I'd like to record a few thoughts about my time at the helm. You can read the nitty gritty details in the company and personal blogs so I'll forgo a history and just dive into what lessons I learned.
Though I did (and still do) a fair amount of talking and reading about how to manage startups, I made a lot of the typical production-manager-turned-CEO mistakes:
I didn't reach out to local startup and funding communities. I have a network of startup folks in the bay area so even though I live in Seattle I didn't make time to attend local startup events. While this did save a huge amount of time, I didn't get to know the people nearby who can help out with non-core competencies (see below) and it also left me without local sounding boards when it came time to decide between going for investors or shutting down. I also worked out of my home office for most of the life of the company, but I should have started by renting space in one of the coworking offices downtown. I've heard that isolation kills more companies than red ink and I can believe it.
I bit off too much technology for our tiny bootstrap budget. I think we were onto something with our platform, but I was pretty aggressive in terms of thinking about scalability and the future of the cloud. We built on the (at the time) raw Amazon EC2 cloud, we were pushing the idea of 3D simulation on the web, and I believed that we could wrangle applets into not sucking. Even though I was very careful about scope and our focus on product, I underestimated the time it would take to get to a V1 and then inject it into the market.
I picked the wrong community of peers. I formulated the main ideas for the company while taking part in the game-centric virtual world community, so that is who I talked with the most. There are some brilliant folks in that crowd so it was stimulating, but in the end I spent a lot of time in groups of people who didn't believe that the web was about to consume 3D spaces like it consumed text, audio, and video. We were a web centric company so what I should have done was put out django-sim as quickly as possible and then rally forward thinking web developers around that flag.
I didn't outsource non-core competencies. This was partly fallout from the funding error I mentioned above because there just wasn't room in the budget to pay someone to make our product look like anything other than a developer driven prototype. Combine that with our "build it and they will come" mentality (a typical engineers' outlook) and the result was clearly not up to my personal or professional standards and had very little marketing push to get it in front of our target customers.
I worked myself too hard. I worked long hours and when I wasn't working I was thinking about working. I got divorced and shut down the company in the same quarter. This is not a coincidence. As news spread about this I had many interesting conversations with other divorced startup folks and it's clear that many of those startup heroes sleeping under their desks are there to avoid their home life as much as to help the company.
We had an unusual legal structure. There were good reasons for each decision about our legal and IP structure, but when talking with someone about investment you really don't want to be a scrappy LLC making open source platforms and creative commons licensed art which underpins your relatively small layer of proprietary product. Right or wrong, it's a red flag to many investors.
Luckily, not all of the lessons I learned are based in pain: I hired very carefully and the people I worked with were unbelievably excellent. Bootstrapping has a place in the pantheon of funding strategies, and I better understand which sorts of business model it can support and what a engaging business culture it can create. I fought against the usual communication firewall between my customers and my team and it more than paid for itself in understanding and community support.
It's hard to see these lessons recorded in black and white and they're a lot easier to identify in retrospect than in situ, but I think it's important to get them into the memepool for me to remember and others to read. Also, the folks in my next startup can now linkslap me if I start to make these mistakes again.

