Bill Gates, co-founder and chairman of Microsoft, dropped out of Harvard and set up a business called Traf-O-Data. The partnership between him, Paul Allen and Paul Gilbert was based on a good idea (to read data from roadway traffic counters and create automated reports on traffic flows) but a flawed business model left the company with few customers. The company ran up losses between 1974 and 1980 before it was closed. However, Bill Gates and Paul Allen took what they learned and avoided those mistakes when they created the Microsoft empire.

(Bernard Marr is the best-selling business author and enterprise performance expert on LinkedIn)