Starting TeamOn was a great lesson in the school of entrepreneurship. While I had some great “entrepreneurial” learning experiences during my early days at Microsoft, there is no substitute to starting a new venture on your own. Especially, if there is no corporate parent to back you up if you make a mistake. Here are some key learnings that hopefully many of you will find helpful.

Be persistent but know when its time to change
This is a tough one pull off. Most entrepreneurs are successful because of their single minded focus and passion. For sure, you will hit many tough obstacles on the way so having the confidence and belief in your ideas is essential. At the same time, you need to have the discipline to step back every so often to evaluate whether your idea is working or not. And you need to get others involved (your co-founders, board, key employees) so you can truly get unbiased feedback.

It is very hard to acknowledge that the time just isn’t right for your original idea. But you have to be flexible and take what you have built and search for an alternative market. In our case, after a year and half of pursuing the small business market without significant success, we switched strategies and ended up ultimately making the right call in pursuing the wireless market.

Spend Money Wisely
Seems obvious – right? Especially after all the dot com excesses. But I still see many companies, after raising their VC round, hire hundreds of employees without having a firm handle on their business model. Not to mention hiring a bunch of expensive executives who are typically are not willing to get their hands dirty.

At TeamOn, we were lucky to have raised $15 million. But unlike many of our competitors, one of whom burned through over $20 million in a year and half, we were very careful in spending our money. We kept our burn rate low and whatever money we spent on marketing was focused on measurable customer acquisition programs. This gave us the time and flexibility to reshape our business plan and target a much better market opportunity.

Focus on building your value proposition before scaling it
BlackBerry is a perfect example here. RIM first focused on perfecting their offering on a single device, a single network and a single market. Their initial growth rate was relatively slow – it took RIM several years to get to the first half a million users. Once they had perfected their offering and model, however, the wireless carriers came knocking on their doors. The BlackBerry became the only proven wireless data solution that could deliver over $40 of ARPU (Average Revenue Per User) while consuming precious little data bandwidth. Once the model had been proven, it took RIM only 3 more years to go from 500K users to over 5 million users.

It is never too early to focus on your business model
A lot of people will tell you to focus only building on your user base and worry about making money later. That’s probably true for instant hits like YouTube or MySpace who achieved the scale to make an ad model work. But for the rest of us, just focusing on building a user base is a luxury one can’t afford. Giving away services for free is easy – it is much harder to figure out how to make money. It is going to take a lot of experimentation to get it right, so might as well start early. Figuring how to successfully charge for your services has many benefits – 1. You can figure out what you can afford in terms of cost of customer acquisition 2. You have greater ability to grow organically vs having to raise money from VCs 3. Even raising money or selling to another company becomes easier because you can point to a working business model