Rising and Falling Hard in the dot.com Age, Movie Review Example

In 2001, the American economy experienced one of the most devastating events of the last fifty years, namely the so-called Dot.com bubble implosion that involved the total collapse of hundreds of web-based companies or “startups” that were attempting to cash in on what was then a very lucrative Internet-based industry.

This implosion was caused by many factors, such as a “rise in outsourcing which led to widespread unemployment” among those that worked as computer software and website designers and computer programmers (“What Was the Dot.com Bubble?”); also, the stock market experienced a “major downturn in the wake of the terrorist attacks” in New York City and Washington, D.C. in September of 2001 (“What Was the Dot.com Bubble?”).

To make matters worse, some of these Dot.com entities “engaged in shoddy or questionable bookkeeping” and were effectively “caught with their pants down in a series of government investigations” which led to a loss of faith in Dot.com companies by the American investor and consumer (“What Was the Dot.com Bubble?”). Obviously, if a person was to “startup” a Dot.com entity similar to Gov.Works today, they would have the distinct advantage of hindsight which would make it much easier to avoid the pitalls and traps experienced by the owners/operators of Gov.Works.

In the 2001 documentary film Startup.com, directors Chris Hegedus and Jehane Noujain relate the tale of Kaleil Tuzman and Tom Herman, two high school friends that go into business together in an effort to get their website Gov.Works off the ground as one of the thousands of “startup” companies before the Dot.com implosion of 2001. This website was specifically designed to make it easier for people to deal with the overwhelming challenges, loopholes, and bureaucracies of local and state municipalites and especially the U.S. government. Certainly, this was a very good idea, but things went awry quickly and began to unravel as the 1990’s came to an end amid an economic slowdown after the Presidency of Bill Clinton.

Tuzman and Herman’s first attempt at sorting through the miasma of bureaucracy focused on the mundane but quite common need to pay traffic tickets. As entrepreneurs, Tuzman and Herman did not have a clear-cut plan for launching their website nor any strong gameplan for company growth; however, like so many other young entrepreneurs at the time, they “pounded the pavement” as the saying goes in search of support, capital, and investors while maintaining an attitude of “substituting making money for good works” (Hagopian, “Startup.com”).

Also, Tuzman and Herman, when speaking of their shared “dream” Dot.com entity, discuss it as rank amateurs who have done nothing more than to “come up with a new way to separate Americans from their cash” (Hagopian, “Startup.com”). But after successfully launching their new Dot.com entity, Tuzman and Herman began to experience a number of unforeseen roadblocks which eventually led to the collapse of their “dream” Dot.com adventure in cyberspace. Also, as a direct result of going through the trials and tribulations of dealing with a “startup” operation, longtime friends and associates Tuzman and Herman rapidly became “disaffected and sullen” and slowly lost “the ability to function as ordinary humans” (Hagopian, “Startup.com”).

There are some definite highlights in this film, such as having a camera crew (actually two guys with hand-held cameras) on site to fully document the rapid rise and tumultuous decline of Tuzman and Herman’s “dream” Dot.com entity, and unlike other documentaries, Startup.com does not relate the story of Tuzman and Herman via the typical narrative style but rather documents the various scenarios and situations that Tuzman and Herman had to deal with on a daily basis as the young and inexperienced proprietors of Gov.Works. Also, filmmakers Hegedus and Noujain provide some rather eye-opening interviews with Tuzman and Herman that allows the viewer to empathize with them and to more clearly understand exactly what went wrong.

One important area in which Tuzman and Herman failed miserably as Gov.Works owners/operators was deciding which type of software to utilize for their website. As Louise Kehoe points out, Tuzman and Herman could not come together as a team to decide on a software route that was to be used mainly to schedule their workforce and to keep track of inquiries made on their fledgling website. Ofer Matan of Blue Pumpkin Software puts it simply as “a matter of maturity” related to Tuzman and Herman’s inability to come to grips with this particular problem (Hagopian, “Startup.com”).

At the very beginning, it appeared to Tuzman and Herman that their “startup” enterprise should do quite well financially, and after raising more than $50 million in revenue and hiring hundreds of employees, it seemed that their assumptions were correct. As Tuzman declares in the film, he personally held numerous “pitch sessions” with venture capitalists and noted that his ultimate aim was to tap into a “market” for generating $600 million, being the “amount of local taxes, user fees, and municipal fines” that users of Gov.Works “were supposed to pay through the site which would also serve as a source for all information” related to city and municipal services (Hagopian, “Startup.com”).

In addition, after obtaining the “lucrative New York City parking ticket fees concession” (Hagopian, “Startup.com”), Tuzman and Herman became convinced that their enterprise was going to succeed beyond their wildest dreams. But unfortunately, by the late 1990’s, things began to go horribly wrong, due in part to the fact that most of the money that Tuzman and Herman had managed to raise from venture capitalists working and finagling primarily in Wall Street was gone because of bookkeeping errors and flagrant spending. Then, in 2001, the proverbial bubble imploded and Gov.Works ended up being bought out at a bargain basement price.

One area in which Startup.com falls short is in the “documentary” quality, meaning that too often certain important events are not seen on camera which may have helped the audience to better understand the proceedings. Also, the quality of the film makes it somewhat difficult to watch because the camera work is often blurry and shaky. But overall, Startup.com is an excellent film that serves as a template for disaster in relation to a “startup” Dot.com enterprise like the doomed Gov.Works.

In the end, Tuzman and Herman made two big mistakes that could be easily avoided if someone were to “startup” a Dot.com company like Gov.Works today. First of all, Tuzman and Herman failed to create a substantial business plan of action before commencing their enterprise. As Eli Barkat, chief executive of Backweb Technologies, puts it, “The failure of Gov.Works comes down to the lack of a good business model. This pair (i.e., Tuzman and Herman) had enough of everything to be successful, but they did not have a good business model” (Kehoe, “Startup.com”). Secondly, the old saying that friendship and business very rarely mix is true in the case of Tuzman and Herman, for they failed to understand or perhaps realize that egos were eventually going to clash, thus making success very unlikely. As filmmakers, Chris Hegedus and Jehane Noujain did an excellent job at documenting the failure of Gov.Works and should be praised for their efforts to record an important event in the history of American business practices.

Bibliography

Hagopian, Kevin. “Startup.com.” 2012. Film Notes. New York State Writer’s Institute. Web. 24 June 2012.

Kehoe, Louise. Financial Times. June 2001. “Startup.com.” 2012. Web. 24 June 2012.

“What Was the Dot.com Bubble?” 2012. Web. 24 June 2012.