I failed to have faith in my project

Richard Prout: My biggest mistake

Richard Prout, 32, trained as a software engineer and worked for Intel before founding his software company, Intracus. He sold it to Freeserve for £60m but remains managing director

My biggest mistake was to take the advice of people who were essentially financial investors and to let them override my ambition and my vision. I did what they told me to do, and a year down the line I found they hadn't known what they were talking about.

At Intracus we had developed a product we thought would translate well on the internet. We were a traditional software company and our initial idea was to get together groups of people who had common hobbies and interests. A bunch of us were hang gliders and, with 400 in the Thames Valley Hang Gliding Club, it was often difficult to communicate. The weather was fickle, the landowners would change permissions, so to help us we built tools such as a calendar, a debate forum, a questionnaire system and a database.

We realised other people would have the same problems and we could do this software, which we called SmartGroups, as a serious business venture.

We developed and sold it to large organisations for their intranets. The internet came up, but the venture capitalists said it was too risky and we must be mad. They didn't see the dotcom marketplace, but I had been visiting Silicon Valley for four years and had an insight into the internet and huge confidence in its growth.

My big mistake was to let those venture capitalists lock the window on my sales. I should have believed in the product and found someone else. We left the idea, and it was infuriating to find another company in the US who had the same idea had a year's head start - and four million users - on us.

When we went back to see different venture capitalists last year, they told us we should take the idea online, so we went for it and recovered a lot of lost ground. The problem was that we didn't have a UK investment community that believed in or understood the marketplace. Only later did we realise how ignorant the first investors were. I failed to communicate what changes the internet was going to bring, and I assumed they knew how brilliant it was.

The lesson I learnt was to make sure your audience is up to where you are. Some people will not back you because you might not fit their risk or investment profiles. It doesn't matter if people say no; it might mean the idea is no good for them, but it's important to find the right people to talk to.