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Startup.com

American, 2001, 107 min., color, 35mm)

Directed by Chris Hegedus and Jehane Noujaim

Sponsored in conjunction with the University at Albany’s HumaniTech Semester

It is a tale of hubris and a tale of mutual suspicion, a melodrama and a tragicomedy. And it is true.

It is the story of failed dotcom operation govworks.com, whose peculiar inspiration was to be the destination site for all on-line operations with local government, by everybody. It sounds, like most of the dotcom universe, too good to be true, and it turns out to be just that. The "market," says Kaleil in his endless pitch sessions with "vc's" (venture capitalists), is "600,000,00 dollars." That's the amount of local taxes, user fees, and municipal fines American citizens were supposed to pay through the site, which would also serve as a source of all information on local services. And when govworks.com got the lucrative New York City parking ticket fees concession, it seemed as if the company was destined for virtual valhalla. But something about the concept, and everything about its execution, is flawed. In one shot, we see the company's web site. The most prominent button, taking the place of the "shop" button on most successful websites, is one marked "pay."

Directors Chris Hegedus and Jehane Noujaim brought experience and remarkable dedication to the film. Hegedus, along with her partner D.A. Pennebaker, had produced and directed The War Room, the award-winning documentary about the 1992 presidential campaign. Hegedus is a practitioner of cinema verite, in which the filmmakers gain full access to events as they are unfolding, and then use lightweight, unobtrusive equipment (in this case digital video cameras) to record hundreds of hours of film, which is then reduced to an impressionistic account of the event. The filmmakers do not set out to prove a thesis. "I don't know what I want to know when I start filming," said D.A. Pennebaker, in a concise version of the cinema verite creed. There is no voice-over narration to the film; the audience is left to draw its own conclusions. Still, in Startup.com, the filmmakers were gifted with protagonists as subtle and complex as any feature film could hope for.

The film's 20-something "stars" begin as devoted friends, buddies from high school, given to tearful declarations of their deep love for one another. Slowly, inevitably, become antagonists. The two are perfectly "cast": Kaleil Isaza Tuzman, handsome, charismatic, and later, surprisingly wavering, and Tom Herman, quieter, more introspective, and later, just as surprisingly tough. The two come unwillingly into conflict, and the conclusion of the film offers a twist that is at once completely unforeseen, and as organic to the rest of the film's story as the best Hollywood screenwriter could have devised.

Kaleil was Noujaim's roommate, and the producers had found govworks.com through contacts in the financial community. (Noujaim says that he shot much of the film in his pajamas, because so much of the company's business was transacted in bleary late night phone calls.) Govworks.com had everything the producers were looking for in an internet company as their subject: it was just getting off the ground, it's founders were youthful and open, and their story was laced with drama. When they began the film, Hegedus and Noujaim fully expected the company had a good chance to succeed. Chris Hegedus has said that she had genuine affection for the dotcommers: "I loved the whole atmosphere of this time in history when all these kids were on fire about leaving their jobs and flocking to internet companies. It reminded me of my youth in the `60's and all that whole anti-establishment, we-can-take-over-the-whole-world but with a capitalist spin."

In fact, Hegedus and Noujaim were able to document a remarkable process of psychological decay. Their sympathy for Kaleil and Tom does not keep them from presenting this dotcom bubble as an episode of surreal self therapy by two likeable men whose short lives to that point appear to have been focused around the post-Reagan aspiration of substituting making money for good works. The two speak of their "dream" in such reverential tones that it's sometimes hard to remember that all they have done (or think they have done) is to come up with a new way to separate Americans from their cash. The cheerleading sessions seem pathetic, and the two CEO's can't see the company in any way but as a projection of their own needy egos. As his contribution to this masturbatory ethic, Tom organizes a weird New Age retreat, complete with banjo singalong, character testimony from his loving parents, and silent attention to wind rustling in the pines. Kaleil, on the other hand, is possessed of self-confident hand gestures, a winning smile, and a good suit, all the stock in trade of the professional "communicator," yet he's too anxious and morose to return his girlfriend's phone calls. Ironically, their website, which promises that you can "attend a town meeting in your underwear" (i.e., not actually go) is about separating, not connecting, people, about replacing the physical reality of city hall, with all the intended and accidental human transactions that make life unpredictably vital, with a fee-driven spot in the space-time continuum called govworks.com. For Kaleil and Tom, once good friends and rapidly becoming disaffected and sullen, their reality is so virtual that they are losing the ability to function as ordinary humans.

When the film premiered at Sundance, the filmmakers debated about whether to include Kaleil in the film's opening night. Kaleil was game, though he later said that, the Sundance screening and a single video screening aside, watching the film was just too difficult for him. Still, the film has had an exceptional afterlife; it's screened at business schools, for consulting groups, and of course, at internet startups, as a dire warning to all prideful CEO's whose "dream" is so dreamy that it hovers high above the available technology and desires of actual users.

Does Startup.com sound a puritanical outcry against the greed and selfishness of modern venture capitalism? If anything, the film treats this cycle of boom and bust as a fact of contemporary life. It is a fact that filmmakers, all filmmakers, know all too well. At the very moments they were shooting govworks.com's quest for 50 million dollars in seed money, Hegedus and Noujaim were seeking a few hundred thousand dollars and a distribution contract to complete the film. They finally found a sympathetic ear at Artisan Entertainment, and the Artisan producer who viewed the film was ecstatic. His words sound suspiciously like the gladhanding of a venture capitalist eyeballing a new internet scheme presented by a couple of 23 year-olds:

"They came in last fall and showed me 20 minutes of footage. For a person who is enamored with both the business world and with film, this was like a wet dream coming true. I said, `where do I sign?'"

— Kevin Hagopian, Penn State University

The following review by Owen Gleiberman appeared in Entertainment Weekly, 5/9/01:

It’s not every day, or every decade, that you get to see a film as eye opening in its timeliness as Startup.com. The movie, which documents the heady rise and even more spectacular fall of an Internet start-up company, feels as if it had been shot through a crystal ball—it seems to anatomize the whole debacle of the dotcom universe—yet its remarkable prescience is more than a matter of happenstance. "Startup.com" is a revelation not merely because a couple of smart filmmakers got lucky, hitting the news headline jackpot just as the Nasdaq nosedived, but because the film, which for sheer dramatic wallop outpowers virtually every fiction feature I’ve seen this year, embodies the story of our time, the way that the collusion of money and technology has taken over our dreams.

Produced by D.A. Pennebaker, and codirected by his collaborator Chris Hegedus and by a new member of the team, codirector Jehane Noujaim, the movie follows the path of two naively ambitious entrepreneurs in their late 20s. The hulky, high fiving, charismatically bullheaded Kaleil Isaza Tuzman and his nerdish, compartmentalized tech head partner, Tom Herman, have been friends since high school. As the film opens, in 1999, they pool their desire to get rich into a kind of new millennium vision quest. They bark and strategize into their cell phones, pumping up their troops with group cheers. They visit the offices of venture capitalists, raising heroic sums of cash, and they stand around a Manhattan pizza parlor, debating the name of their new company like teenage rockers trying to title their garage band. They’re digital geek Horatio Algers, and they brandish a willed attitude of locker room swagger descended from the fast lucre Wall Street cowboys of the ‘80s.

With much noise and fanfare, Kaleil and Tom declare their intention: They will launch govWorks.com, a bold new website designed to link people up to local municipalities. In essence, this comes down to a newfangled way of paying parking tickets. . . .

These guys have all the trappings of success, and the investment cash, too. So what goes wrong? A failed trip to Silicon Valley provides an early omen of doom. Along the way, there’s an amusing visit from an Atlanta competitor (he strolls through the govWorks offices as wily in his folksy charm as Bill Clinton), as well as a hilarious glitch in the website itself; an office break-in may even be sabotage. More than any of that, though, govWorks, like so many online ventures, turns out to be a half-baked concept, a traditional, even banal idea with the mystical cachet of dotcom attached. The site launches, but it is hardly the oasis of convenience it’s meant to be. The whole fake patriotic generosity of the idea—i.e., that the company exists to "help people"—is driven by the same cult of the Internet arrogance that allows the act of sitting at a desk staring at a computer screen to be dubbed a "revolution." Does anyone at govWorks even realize that a parking ticket is already quite easy to pay?….

Edited down from 400 hours of video footage, so that each scene plays like a rich chapter of its own, "Startup.com" may be to our time what "Wall Street" was to the ‘80s—a defining myth of capitalist excess. True, this is a documentary, but that’s precisely what makes it such a quintessential reflection of the ‘90s boom, when financial news, fueled by the numbers crunch melodrama of CNBC, became entertainment—a drug rush for a nation of day traders, inflating the very market that had seduced their inner greedhead. Kaleil and Tom express loyalty, even love, to each other, yet as their business breaks down, so, inevitably, does their trust. The entire relationship is filtered through fickle layers of profit logic, so that what we’re seeing isn’t just a harbinger of the dotcom downturn. It’s the fallout of a society in which the prospect of instant riches has become a surrogate for identity, a replacement for self. "Startup.com" lays bare the moment when America embraced the grand illusion that said, I go public, therefore I am.

The following is from an article by Lousie Kehoe that appeared in the Financial Times (UK), June 13, 2001:

Persuading hard-working founders of Silicon Valley start-up companies to find time to go to the cinema would usually be a challenge. But half a dozen founders of companies ranging in size from a three-person fledgling to a public company with 250 employees jumped at the chance, last week, to see "Startup.com"….

There was plenty to satisfy those looking for further evidence of the stupidity of internet mania. "It captured well the consensual hallucination of last year’s dotcom frenzy—the arrogance of the venture capitalists, the narcissism of the entrepreneurs, the naivety of the employees and the tragicomedy of too much money chasing too many bogus ideas," said Larry Bohn, chief executive of NetGenesis, who added some "east coast perspective" and saw the film in Boston’s Kendall Square.

The group who saw the film in Palo Alto—ground zero of Silicon Valley—were more generous. They saw the film as an "inside the bubble" perspective of an internet company. The logic of driving for growth at all costs, with seeming disregard for profits, may sound crazy today - but that was what bubble-era companies were expected to do. The rules were different.

The issue that gripped the Silicon Valley group was why GovWorks had failed. As more than one of them acknowledged, the line between success and failure is uncomfortably narrow. Timing, or luck, plays a bit part in the success of all start-ups, said Alan Huang, chief executive and chief technology officer at Terabit, which is developing networking equipment. GovWorks failed in part because of unlucky timing. "It was relatively easy for GovWorks to get funding a couple of years ago. Now it would be very difficult. A couple of years ago it was difficult to get funding for hardware; now it is considerably easier; but six months ago it was difficult."

The founders of GovWorks did a lot of things right, said Daphne Carmeli, chief executive and co-founder of Metreo, an e-business software start-up. "They identified a need, rather than merely introducing a technology. So many start-ups are founded on a ‘build it and they will come’ mantra."

But Kaleil and Tom also made a lot of mistakes, the worst of which was failing to determine who was in charge, the group said. The tensions between the GovWorks founders stood out to Ofer Matan, co-founder and chief technical officer at Blue Pumpkin Software, which has developed software for workforce scheduling. "Doron (Aspitz, Blue Pumpkin’s chief executive) and I have worked together for four or five years," said Mr Matan. "We each know our roles. Perhaps it is a matter of maturity."….

Eli Barkat, who is chief executive of Backweb Technologies, developing internet "push" technology, and a former founding partner of BRM Technologies, Israel’s leading incubator venture firm, put the failure of GovWorks down to the lack of a good business model. "Most successful companies have problems; none of them is perfect. This pair had enough of everything to be successful but they did not have a good business model."

To close the evening, I asked the Silicon Valley group whether they would have allowed the cameras in on their start-up companies, had the opportunity presented itself. Most felt that the cameras might have been too intrusive. Some believed that the GovWorks founders had been distracted by the filming.
Yet had GovWorks been successful, the film would have been a marvellous marketing tool. And who would not want to have a record to look back on that documented the history of an exciting episode in his or her life? I suspect that all of these company founders would want to star in Startup II—providing the ending were different.

Chris Hegedus, codirector of STARTUP.COM, is best known for the Academy Award nominated film, THE WAR ROOM, which follows Bill Clinton’s 1992 Presidential Campaign and was given the prestigious D.W. Griffith Award for Best Documentary of the Year. In 1976, Hegedus began collaborating with D A Pennebaker, editing TOWN BLOODY HALL, the legendary confrontation between between Norman Mailer and Germaine Greer. Hegedus and Pennebakers’ series, THE ENERGY WAR, a candid five-hour political soap opera filmed during the Carter Administration has been cited by Harvard’s Kennedy School of Government as one of the best films on politics. MOON OVER BROADWAY, released theatrically in 1998 and called the best documentary of the year by the New York Times, tracks comedienne Carol Burnett’s return to the Broadway stage.

At 25, Jehane Noujaim, codirector of STARTUP.COM, left her producing job at MTV to create NOUJAIM FILMS. Her first project was to produce and direct STARTUP.COM. Noujaim began as a photographer and filmmaker in Cairo, Egypt, where she grew up. She moved to Boston in 1990, where she attended Harvard University and graduated magna cum laude in Visual Arts and Philosophy. In 1996, Noujaim was awarded the Gardiner fellowship (which paid for the camera used to film STARTUP.COM). She has since worked in both the Middle East and the U.S. as a filmmaker and photographer, directing several short documentaries, most recently MOKATTAM, an Arabic film about an Egyptian garbage collecting village. Back in the U.S., she worked as a producer, director and cinematographer. Since teaming with Pennebaker Hegedus Films in 1999, she has worked on ONLY THE STRONG SURVIVE (an upcoming film from Miramax) and DOWN FROM THE MOUNTAIN, produced by the Cohen brothers. STARTUP.COM is her debut feature film.

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