Startup Tells the Human Story Behind a Business Bust
In the spring of 1999, childhood buddies Tom Herman and Kaleil Isaza Tuzman were just a couple of twentysomethings with a dream of Internet riches. By the start of 2001, they'd lost a fortune, nearly lost their friendship, and seen their dream crash and burn. And two documentary filmmakers--one an Oscar-nominated veteran, the other a novice--got the whole thing on video.
Much as it tells a business tale, Startup.com, directed by Chris Hegedus and Jehane Noujaim, gets its juice from its human story, told with uncommon intimacy. We see Isaza Tuzman and Herman waking up in the morning, lifting weights, discussing delicate financial deals with their attorney. We even see one of the protagonists fire the other. But the film also benefits from fortuitous timing: This New Economy cautionary tale rolls out (its distributor, Artisan Entertainment, plans to open it theatrically in May) amid the dot-com boom's highly public bust.
"Last year," Hegedus reminds an interviewer, "everyone wanted to join an Internet start-up."
Not so much this year, though.
"Not this year, no."
The project began about two years ago, when Hegedus, 48, a documentary vet whose 1993 film about Bill Clinton's first presidential campaign, The War Room, received an Oscar nomination, met Noujaim, 26, who had just quit her job as a producer on MTV's Unfiltered, an anthology of mini-docs shot by teen viewers. Noujaim wanted to make her own films and began experimenting with a digital-video camera she'd gotten with a grant from her alma mater, Harvard University. ("After watching shaky footage of 14-year-olds for hours on end," she says, "you're so ready to put a camera in your own hands.") Looking for a subject, she began filling up $10 tapes with the story of her roommate, Isaza Tuzman, who had just quit his job at the investment-banking giant Goldman Sachs to start an Internet business with his buddy Herman.
Hegedus had been trying to get a documentary about an Internet start-up off the ground for nearly a year but couldn't find a person or company who would agree to be profiled, until she met Noujaim through a mutual friend and joined forces with her. The young people who were drawn to Web businesses, Hegedus says, reminded her of the idealistic kids who formed rock bands in the 1960s. (She has worked on a number of music documentaries, often with her husband, DA Pennebaker, who co-directed The War Room and helmed such landmark rock films as the 1967 Bob Dylan documentary Don't Look Back.) Like the boomers of '60s counterculture, Hegedus says, the '90s Web entrepreneurs had "that anti-establishment sense. They were going to go against the big corporations." What they didn't realize, she says, is that technical expertise didn't give them a permanent advantage: "They all knew something the big guys didn't, and it took just a while for the big guys to catch up."
Like many Web start-ups, Herman and Isaza Tuzman's began with a sound, even noble idea: to make it easier for citizens to navigate government red tape. Their company, govWorks.com, was supposed to help people handle simple bureaucratic chores (say, paying parking tickets) online. Herman was the nascent firm's tech whiz, Isaza Tuzman the marketing guy. Like other dot-coms, Manhattan-based govWorks picked up piles of venture capital, despite its founders' inexperience and jerry-built business plan; they ultimately raised $60 million and hired more than 250 people. As young, attractive, apparently successful New Economy tycoons once did, they got a lot of media attention. And like so many of their young, attractive, apparently successful peers, their venture burned through its cash, failed to deliver on its grandiose plans, and collapsed with breathtaking speed. (govWorks was sold this past Jan. 1 to a multinational corporation.)
What makes the govWorks tale the stuff of good cinema is the relationship between its principals. "You could see that they were going to be the story," Hegedus says. "They were such opposites." Herman is a gentle, slightly hippieish single dad who gets swamped by govWorks' growth and refuses to acknowledge he's drowning. In one of the film's key scenes, Isaza Tuzman warns him of govWorks' dire outlook--a furious burn rate, expected layoffs. "We may be personally at risk," he says. "Well," Herman replies, blasé, "I'm not personally at risk." The camera catches his partner's jaw tightening in frustration.
The hard-charging Isaza Tuzman, by contrast, fights to stay afloat. He does have bouts of naiveté; in one scene he cheerfully gives a govWorks competitor a tour of the office as his stunned co-workers watch. But he seems the more pragmatic of the two, with a keener grasp of what it means to play with the big boys. "It's all about growing and learning and building a business," he lectures Herman. "And they don't care if we grow or learn."
While Noujaim's friendship with Isaza Tuzman provided access (and how--"It was weird being [her subject's] roommate," she says. I basically had to work around the clock."), Hegedus provided prestige. The veteran filmmaker "lent legitimacy to the project," Noujaim says. "[Isaza Tuzman and Herman] couldn't say, 'I don't want to do this anymore.'"
In fact, the filmmakers say, their subjects never threatened to stop participating in the film, though the directors themselves nearly gave up a few times. The worst day, Noujaim says, was when they tagged along to a meeting of the company's board of directors, a mysterious, all-powerful group often mentioned in the film. At the last minute, the cameras were barred from the meeting; because Isaza Tuzman had never warned them this would happen, they felt betrayed. "And we just went into the bathroom and sobbed," Noujaim says. Hegedus nods gravely, deadpanning, "And then went shopping."
Surprisingly, Hegedus says, "[Herman] was really our supporter" when the going got tough, even though the film showed his humiliating ouster from the company. "He understood that we wanted the human story." In turn, they're sympathetic to his plight. "Tom was kind of a scapegoat" for govWorks' woes, Noujaim says. As the company's mission grew more elaborate, "Tom was responsible for making it happen, and he always had to rush."
The filmmakers had to rush too: When the govWorks story ended with the company's New Year's Day sale, Noujaim, Hegedus, and co-editor Erez Laufer scrambled to wrap up the film in time to show it at the Sundance Film Festival in mid-January. The directors shot more than 400 hours of digital video--so much material that Hegedus says she's thinking of cutting another version of the film for business-school audiences. They just screened Startup.com for the venture-capital group that owns Artisan.
How did the suits react? "They laughed at everything," Hegedus says. "They've heard it all."