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Close Encounters of the Dotcom

By chronicling the rise and fall of govWorks.com, “Startup.com” captures on film an era of spite, pity, and rampant excess that left the landscape littered with broken dreams. But, hey, it sure was fun while it lasted.

Tom Herman suppresses venom and tears as he dials the cell phone of govWorks.com cofounder and CEO Kaleil Isaza Tuzman to make his final demands. Less than 24 hours earlier, Isaza Tuzman called for Herman’s immediate termination before escorting his childhood friend out of the building and heightening office security.

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Now Herman — the “good cop” to Isaza Tuzman’s ego-warped bad lieutenant — has ripped off the kid gloves. He wants govWorks to fork over a hefty financial settlement, including a “significant cash component” to compensate for his early investment and early dismissal. Isaza Tuzman balks. GovWorks doesn’t have the money. “This is going to get very ugly,” Herman predicts.

Little does he realize the ugliness began long ago.

From the opening credits through the final scene, Startup.com documents corporate nastiness the likes of which we haven’t seen since Gordon Gekko celebrated greed in Oliver Stone’s Wall Street. Greed, it seems, made a comeback in the late 1990s. And govWorks hosted the reunion party.

Directed by veteran filmmaker Chris Hegedus (Moon Over Buffalo, The War Room) and newcomer Jehane Noujaim, Startup.com captures the saga of American business during the short-lived, but much-hyped, Internet boom. Part reality television, part business chronicle, this dogged documentary began as 400 hours of raw footage filmed mostly by Noujaim, a former classmate and roommate of Isaza Tuzman. The intimate, sometimes unsettling footage begins in May 1999, when Isaza Tuzman quit Goldman Sachs to lead govWorks’s eight-member team, and runs through May 2000, when the company finally came apart at the seams.

At a time when art imitates life more often than not, Startup.com satisfies an itch for real drama in real time. The movie opens in New York today and in other major U.S. cities on May 18, just weeks after producer D.A. Pennebaker (Don’t Look Back, Monterey Pop) added closing titles with updates on the major players.

True to the dotcom ethos, Startup.com concentrates the bulk of its early footage on the wooing, scoring, and losing of venture capital for govWorks, a site which began as a way to pay parking tickets online and grew exponentially over one wild year. The camera shadows childhood friends Isaza Tuzman and Herman on dizzying trips from their headquarters in New York to California and back again, following the founders into Kleiner Perkins Caufield & Byers, General Atlantic Partners, and various other high-profile venture-capital shops. We see the young entrepreneurs stammer, squabble, and finally score a grand total of $60 million in financing.

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We also see the entrepreneurs suffer tremendously as the driven Isaza Tuzman sabotages one romantic relationship after another and as the nurturing Herman sacrifices time with his young daughter, Tia, to mold business plans and prepare PowerPoint presentations. Leavening the anguish and exhaustion, however, are several brief, yet boisterous rounds of high-fiving, hollering, and hugging — times when govWorks seems on top of the world.

The celebrations aren’t triggered when govWorks reaches another milestone in its mission to revolutionize local government. The revelry erupts when Isaza Tuzman closes another deal or scores another investment, bringing his founding team ever closer to an early retirement. When it comes right down to it, the founders of govWorks don’t want to transform citizens’ relationships with government. They want to tap into a market of more than $600 billion in annual government fees. They want to make lots and lots of money.

And who can blame them?

Every red-blooded capitalist plotted at some point during the Internet boom to become a member of the dotcom royalty. We dreamed of angel investors, Super Bowl ads, and Microsoft buyouts. So how can we condemn or ridicule Isaza Tuzman and Herman for pursuing the greedy, gluttonous, gimmicky ideal that we all secretly coveted?

Scorn is not the point of Startup.com — and neither is pity. We can’t help but sympathize with Isaza Tuzman and Herman as their technology falls short, their team combusts, and their company ultimately capsizes. But condolences are inappropriate because, in the end, Isaza Tuzman and Herman lost nothing more than their pride and momentum when govWorks bombed before its IPO. We cannot pity them for trying.

The most powerful emotion evoked by Startup.com is admiration. Not necessarily for the govWorks business scheme — the company had no revenue model and no foreseeable path to profitability — but for the pure chutzpah that Isaza Tuzman and Herman demonstrated in making their vision a reality. These two naive and nervous entrepreneurs demonstrate the power of the American dream. Through sheer determination and tenacity, Isaza Tuzman and Herman hatch an infectious idea and then create a promising application, all in front of our eyes.

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“There is a sadness in watching ideas grow beyond what you can do for them,” says one founding member of govWorks before he’s booted from the team — older, wiser, and several million dollars richer. The sense that govWorks outgrew, even enslaved, its founders is demonstrated in scene after scene of contrasting images — Isaza Tuzman grinning on the cover of Forbes and chumming with President Clinton at the White House, and then confiding to Herman that the board of directors will dump them both if govWorks doesn’t catch up to the competition. “Each morning, I wake up with a morbid fear,” Isaza Tuzman says behind closed doors.

The downward slide begins the day EzGov launches it site ahead of govWorks. Isaza Tuzman tells his employees that he refuses to lose and then confronts the technical team with an ultimatum: Overtake the competition or die trying. Shortly after, an intruder breaks into the govWorks offices and steals confidential files from Isaza Tuzman’s office. Then Wall Street crashes, and the company founders lock horns over leadership issues as they stumble over their egos and their investors’ demands. Isaza Tuzman and Herman lay off 60 of their more than 250 employees. “I’d rather see govWorks fail than risk personal relationships,” says Herman, who is ironically forced out of the company by Isaza Tuzman as the CEO admits to “flat revenue, a bloated infrastructure, a sales cycle that takes too long, and no clear path to cash.”

Though the end is a foregone conclusion, the sequel is a total surprise. The closing credits of Startup.com reveal that Isaza Tuzman and Herman have launched a new business together, the Recognition Group, which helps small, venture-backed technology companies navigate and survive crisis. This partnership, if nothing else, goes to show that human ambition is not easily squelched and that this economic downturn does not mark the end of an era. Instead, it’s just the latest act in an entrepreneur’s drama that revolves around one central story line: the quest to make lots and lots of money. God speed.

Anni Layne (alayne@fastcompany.com) is the fastcompany.com senior Web editor.

Read a review of Secrets of Silicon Valley

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