By 1998, I had been a participant in a live-action game for 2 and a half years. I had little experience outside the three chapters of the larp that I went to, but due to the recent closing of one chapter and the relative infancy of the other two, I felt that I did not want to attend that larp anymore for various reasons. Several friends of mine felt the same, and three of us got together to start a larp of our own. (Note: I do not want to name the specific larp that I was dissatisfied with. Years later I returned to play in this larp, and the situations surrounding why I quit had changed dramatically -- new rules, new owner, new chapters, new staff, etc.)
The other two people had significantly more experience with larps than I did at the time. Both had more resources than I (I was in college at the time) and had a starting store of props for our game. We got together, hammered out some rules that were quite similar to what we were used to in the other game, and tried getting a few people together to play the game.
It didn't go well. Few people showed up, and everyone felt that it was just like the other larp except for a few small things. The larp fizzled out after only a couple of games.
But this was not the end of REALMS, as we called it (note that there are at least two other larps in the US by that name now. One of them was not around then, and we found no trace of the other in our online searches). A month or two later, after the interest of my original partners had died (both got very busy with "real life" problems/interests), I recruited two friends of mine who had almost no larp experience at all. Together, we completely revamped the rules and got together a much larger game. After a couple of "playtesting" games, we ran a full weekend event, holding our breaths and hoping that everything would work.
10 people showed to the event. For us, that was a great start. While there were plenty of mistakes made in running it, and we learned much more about the rules we'd made up, most of the players enjoyed the game and were enthusiastic about continuing it.
REALMS continued to grow over the next year and a half, from 5 people at the original playtests to 20 when it closed down. The rules continued to evolve and grow since we never considred them to be finished. By the time that the game shut down, we were ready to start charging money for events to help the system grow.