Let’s pretend, be it from VC’s, angels, or remortgaging your house, you’ve come into some investment capital and are looking to build a web application. Here are my top 10 ways to spend every penny of it and still fail miserably.

1. Over-complicate your concept
   So you have an idea, a good idea is a simple one. Take your core concept, develop that and only that, and get it out to the public. Run a closed beta, or even a public beta, and see if there’s interest. You and your investors may think it’s the greatest idea in the world, but if nobody else does it’s not going to make any money. Before you consider your user interface, chew on this for a while.
2. Buy tons of expensive hardware and software
   If you’re taking my advice on number one, this one is easy. A simple concept with a simple implementation doesn’t require a quarter million dollars of hardware and software licenses. When you start out you won’t have tons of data, or users, and if your app is programmed correctly I would hope you don’t have tons of processor load. Try out shared hosting, or maybe a year-long contract on a dedicated server, or if you must buy or lease hardware, acquire a simple 1U machine or small cluster and see how it works. Build your app on a platform that scales well, and design it to be scaled. Hardware gets cheaper by the day so three months down the line you’ll get more disk, RAM, and gigahertz for less money and it won’t all be sitting at 99% idle while your user base is ramping up.
3. Develop to a functional specification
   A functional spec looks great on paper, but sit down and think about it. Can you honestly tell me that you can think of EVERYTHING your app needs to do right now? You don’t even know what your users are going to think of it or do with it, they could end up using your application for something you never even thought of, and your entire business plan my have to evolve to accept it. Consider agile development, you’re probably going to pay developers by the hour and have to spend time working with them, but you can adjust as necessary when you see something just isn’t working. Agile development offers a finished product that is exactly what you need now, not exactly what you thought you needed three months ago. It may even save you money if you decide to make radical functional changes or that your app is perfect without feature A. Remember point number one here; your app is done when people love it and use it, and you won’t know that until they’ve had a chance to put their hands on it. If you’ve still not sold, read this.
4. Waste time
   This is the internet, first to market gets the buzz and everyone else is a copycat. The more time you waste with things like functional specifications and bulky frameworks or languages, the higher the chance somebody else is going to do it first.
5. Ignore the early adopters
   Web 2.0 applications live and die by the blogosphere, get your beta out there, make sure some of the movers and shakers are interested, and listen to what they have to say. If they love it, your lucky, if they don’t, listen to them, if they hate it, cut and run. If the blogosphere doesn’t generate any traffic for you it’s pretty unlikely that any other advertising will. Geeks try things first, geeks tell their friends and family if it’s worth it, but geeks may also tell you what you can do to make things better, and if you listen, they’ll probably tell even more people because you did.
6. Ignore the experts
   Maybe you’re not a web developer by trade, so you hired some company to help you develop this application; you’ve hired them, they must be good so listen to them. Chances are they’ve done more of this then you, they understand the technologies and the medium, and they just know how this stuff works. You hired them, trust them, don’t tell them how to do their job.
7. Get more investors
   If you’re looking for more investors I’m assuming you’re looking for more money, and I have to ask “why?” Is there something wrong with your business plan? Did you start with less money than you thought you needed, or are things going badly? Investors take wooing, possibly traveling, these things cost money, consider cutting the fat from elsewhere first and don’t waste your resources.
8. Use buzzwords
   Buzzwords are expensive. If you’re not a developer and you walk into a software shop and start throwing around AJAX and Web 2.0 you’re bill is going to go up. Let the shop tell you when AJAX is appropriate, let the shop define Web 2.0, because it’s not just animations and shiny buttons. You won’t impress anyone with how well you can use buzzwords in a sentence you’ll impress people with how well (and appropriately) you use the underlying technologies in your application. If you want to use buzzwords, try usability, accessibility, and progressive enhancement, you’ll get more credit from an informed developer and your application will be much better for it.
9. Hire too much management
   Managers are expensive. They suck up time with unnecessary paperwork, meetings and bureaucracy. Spend you money on quality developers and let them do their thing.
10. “Improve” somebody else’s idea
    In my experience, first-to-market usually wins, hence rule number 4, but if you want another opinion, read this. Basically there’s room for three, the first, the free, and the best. If they already exist you better be able to cover the free and the best or maybe just the best but if you have an incredible marketing team. Users get entrenched and usually won’t switch, so if your market is saturated, it may be a good time to consider a new idea.

That’s my two cents, if you like it, listen to it. If you want to use my experience and work with me, please contact me. If you disagree, comment, I want to hear why.

To state for the record, the opinions expressed in this article are those of the author and not his employer, while his employer may be willing to work under different terms, this is not their SOP.