You can still hear the wince in Bonnie Crater’s voice when she talks about Zelerate, the ecommerce software company she ran between 1999 and 2001.
During the dotcom boom, the company raised about $15 million and burned through most of that money on growth, fully expecting that it would easily raise another round.
But then the bubble popped.
“I’d hired these 100 people, and then I had to fire them all,” Crater tells Business Insider. “It was devasting. I felt like I ruined their lives.”
The company officially shut down not long afterwards.
Crater says it took her years to come to terms with what had happened and her role in it. She worked at several companies, including Salesforce, before she decided to plunge back into the startup world by founding a customer management company, Full Circle Insights, in 2011.
But when Crater looks at today’s tech climate, she says she’s starting to see signs of the next pop.
She’s particularly worried about some of the sky-high valuations and the subsequent pressure for rocketship growth. For a recent example, consider Zenefits, the troubled startup that has attributed some of its recent issues to cut corners and an unrealistic thirst for expansion.
As someone who did it wrong the first time, here’s her biggest advice for today’s startups:
1. Really understand the numbers and do not run out of money
“Whatever you do, don’t run out of money,” she says. “I know that sounds very simple, but it’s a common issue.”
For an idea of how widespread that particular problem is, check out this recent chart from CB Insights:
— Chris Maddern (@chrismaddern) March 6, 2016