Startup.com Reveals the Real Y2K Problem

The opening night showing of "Startup.com" in Los Angeles on May 18th was full of dot-com workers who were probably looking for a chance to laugh in the mirror. Instead, they got socked with raw footage of incompetent people mistreating one another while wasting a lot of investor money.

A whole lot of investor money.

The 118-minute film is a documentary about the rise and fall of govWorks.com. Like so many other dot-coms with sketchy business plans pinning all hopes on the elusive promise of doing business on the Net, govWorks won big in the venture capital lottery of 1999.

After getting and spending US$60 million of someone else's money, the company folded -- or more euphemistically, got sold to a multinational corporation -- in December 2000, without getting much of anything accomplished.

The documentary is based on over 400 hours of film taken of the company's founders as they floundered their way from weak concept to dot-com demise.

What Friends Are For?

After spending a lot of time talking about the best name for their Web site, lifelong friends turned Web entrepreneurs Kaleil Isaza Tuzman and Tom Herman travel from New York to the West Coast in search of funds.

They visit a lot of VCs and have a few laughs about the meetings while driving around Silicon Valley. "Why do venture capitalists say 'query' so much. Query: Why do they?"

But the laughs are soon over as their personal relationship becomes so much grist for the dot-com mill.

The Insider

We don't see much about the development of the actual Web site -- other than to watch the number of employees grow exponentially. However, we do get to meet Tuzman's girlfriends and watch him stab his best friend in the back in more ways than one.

Because the film was shot by Tuzman's roommate -- and because the company graciously gave the filmmakers free rein -- "Startup.com" offers a compelling close-up of the emotional shortfalls and business shortcomings of a year 2000 dot-com.

And like so many poorly conceived and overfunded dot-coms of that fateful year, it was a dot-com probably cursed to fail from the get-go. The angry meetings and passionate speeches are riveting -- and pathetic.

Into the Woods

Yet it is the quiet moments of the film that are most telling.

About halfway through Kaleil and Tom's Big Adventure, the entire company goes on a retreat in the woods. First, Tom's parents express their joy in the (ostensibly) imminent achievements of their son.

Then the employees take a hike, literally. They get to the center of nowhere and everyone is asked to look up into the treetops and listen to the wind going by.

Is Anyone Listening?

For several minutes there is only silence. The camera pans over the serious faces of the govWorks engineers and clerks.

"See me, Mr. Dot-Com Boss? I'm contemplating the sound of the wind."

Meanwhile, back at the company's high-rent offices in New York's Silicon Alley, the Web site has fallen into dysfunctional hell.

The idea of govWorks was to make it easier for people across the country to pay parking tickets and other bills from their local governments via the Internet (and in their underwear). However, when the phrase "parking ticket" gets typed into the site, it asks the user: "Is Park your first or last name?"

The Real Y2K Problem

"Startup.com" tells the story of how one particular dot-com was run into the ground, but ultimately it reveals the real year 2000 problem. And no, not that mixing personal relationships and business doesn't work.

Query: What was the real Y2K problem?

Answer: the promise of a new electronic medium caused people to lose sight of the reason why anyone should ever start a new business -- to provide value to consumers and investors alike.

Which has nothing to do with the sound of the wind in the trees.

What do you think? Let's talk about it.