What’s that old saying about people repeating mistakes of the past because they never learned their history?

Entrepreneurs attending the Conference on Entrepreneurship, Innovation & Success this past weekend at least heard the history of a failure. Whether they learned or not is anybody’s guess right now.

Dean Schuster, one of the “dot com” trailblazers who managed to burn through millions of venture capital like so many others stood up to talk about what went wrong. And Dan Davies, publisher of Business Leader magazine, a co-sponsor of the event along with NCSU’s School of Management, said failure was a reason why he wanted Schuster on the podium.

“Few people are willing to talk about spectacular failure,” Davies said after Saturday’s event. “It’s instructive for people to learn a right way, wrong way approach to doing business.”

Schuster was there to tell all – well, with the exception of where he was actually employed before the company went belly-up. Founder of the alias company, Acme.com, Schuster shared the top 10 reasons of how venture capitalists made him crazy.

His message: How not to do business based upon an inside observation of the demise of his own company.

Wrong stuff, right stuff

Joshua Chodniewicz, co-founder and chief executive officer of Art.com, on the other hand, had a different story to tell. He followed Schuster by telling how he and his partner were able to build a successful e-commerce company from the ground up with no venture funding.

Schuster gave insight on the consequences of doing the wrong thing. Chodniewicz shared the right stuff. As Schuster’s company grew through mergers and funding, he and his partners got smaller and smaller pieces of the pie. Chodniewicz grew from actual revenues and maintained control.

“How do you blow through $20 million inside of two years? Or was it $30 million?” Schuster wondered. “It’s a dirty little secret and it’s called the Internet revolution,” he added.

Refusing to ever reveal the actual name of his disaster-start up to “protect the names of the innocent,'” Schuster said, “Our dot com created six of the seven deadly sins, and broke nine of the 10 commandments.”

More than 350 entrepreneurial-types listened to his litany of mistakes.

“Our company consumed, nay utterly destroyed, capital at a rate of over a million dollars a month on a trek to gain fame and fortune on the Internet,” said Schuster talking of his experience.

“Look on the bright side. We didn’t murder anyone.”

‘Top Ten’ list of mistakes

Schuster explained his company “didn’t use a lot of common sense, well, to accomplish anything.” Presented in a David Letterman’s top-ten-like format, Schuster’s foolish mistakes made by Acme.com looked something like this:

10. Acme.com had no clear mission.

9. Acme.com was mercurial to its fault.

8. Acme.com faked it, but never made it.

7. Acme.com did not groom vigorous leaders, it produced tolerant followers.

6. Acme.com had no cash flow, no focus, and no concept of cost accounting.

5. Acme.com spent millions buying another company, which resulted in massive amounts of non-billable time.

4. Acme.com hired badly.

3. Acme.com fired even worse.

2. Acme.com put all its eggs in one basket.

1. Acme.com stock options aren’t all they’re cracked up to be. (Better used as wallpaper.)

So, what’s the future look like? In usual accidental entrepreneur-like fashion, Schuster’s experience has landed him at the helm of another start-up called Truematter.com, an interactive design firm based in Columbia, SC.

Chodniewicz, an opposite from Schuster’s cynical style, conveyed that the basics of team trust and respect has built his company from two people eight years ago to 150 employees in an online category worth $16 million. Chodniewicz accounted for his last seven years by relying upon “common sense and frugal financing.” Today, Art.com is the world’s largest online consumer marketplace for prints, posters and photographs and its site generates 120,000 hits a day on the Internet.

“Put it this way, we started the concept for the company at a time when one in 800 people had e-mail addresses,” said Chodniewicz. His combination of e-commerce, the Internet and the art industry knowledge kicked off the idea for the vision of building an on-line site to sell posters to college kids under the name Allwall.com in 1995.

“It took us two years to sell our first poster,” explained Chodniewicz. “This after 100 hour work weeks for more than 18 months; our first sale probably cost more in shipping than the order was worth.” The first order sold was for $9.

Another speaker added that entrepreneurs need something beside conviction, a business plan and capital of some kind to succeed.

Larry Farrell, keynote speaker and the author of “The Entrepreneurial Age and Searching for the Spirit of Enterprise,” emphasized: “Today, you gotta be good at both — the magic of entrepreneurship and the science of strong management.”