The story of govWorks, a US dotcom that tried to bring government electronically to the people before falling on hard times, is enthralling cinema audiences across the US. Startup.com, a documentary about the rise and fall of this ambitious New York-based venture, is already being talked of as a possible Oscar winner. It has also made reluctant stars of its two chief protagonists, the founders of the company whose travails are captured on screen.
The film, which will be seen at European film festivals over the summer, demonstrates more starkly than any economic report the personal and financial perils of the dotcom world.
It ends with the company busted and its founders, Kaleil Isaza Tuzman and Tom Herman, out of work. But every good film deserves a sequel, and this one is no exception, although the follow-up is happening in real life rather than on screen. Out of the disaster has emerged another idea, relevant to start-ups everywhere, which is being given an airing in Europe.
Tuzman is a Harvard-educated high-flyer who left Goldman Sachs, where he was an investment banker, to start the company; Herman is a smart technician and Web architect. Essentially, govWorks would navigate local and national government for the citizen. It would make time-consuming and tedious dealings with government simple and speedy.
You could pay your utility bills or your parking tickets at the touch of a keyboard. You could register to vote and download campaign videos of politicians. You could apply for government jobs, both locally and nationally.
All that and much more, combined with the boyish 20-something enthusiasm of Tuzman and Herman, childhood friends who won over enough investors - among them the Hearst Corporation and the Mayfield Fund - to get $60 million thrown at them.
It is at this optimistic stage that we meet our heroes in Startup.com, which was made by Jehane Noujaim, who had been Tuzman's flatmate, and Chris Hegedus, a veteran documentarian whose work goes back to the 1960s and whose husband and co-producer is the award-winning film maker DA Pennebaker. We watch the pitches to investors in 1999, see the company recruit 230 employees and witness the moves into ever flasher offices.
To cut a poignant tale short, disaster was lurking round the corner, and govWorks went from a company that everyone presumed would make billions into one that went bankrupt. The low point came when Tuzman had to give Herman the bullet, even having him escorted off the premises by security. If you log on to www.govWorks.com now you will be directed to govOne Solutions, part of eOne Global, a subsidiary of First Data Corporation, which bought govWorks after it went into bankruptcy.
But there is life after dotcom disaster and, after a few months of purgatory, Tuzman and Herman are reconciled and have launched something that may have a much longer, if less thrilling, life.
Sitting by the pool of the hip Avalon Hotel in Beverly Hills, a rueful Tuzman recounts how excruciating it has been to watch some of the worst moments of his 30 years on the big screen. He and Herman are still best friends, says Tuzman, who was born in Boston of Colombian-Israeli parents but grew up mainly in Colombia, where he was kidnapped as a child before returning to the US.
Less painful to talk about is the new venture. Recognition Group has its office on Fifth Avenue in New York but employs a modest eight people and is, says Tuzman, already working profitably. It is a company that recognises that many of the brave and foolhardy ventures of the dotcom boom years may fall to earth. So they offer advice to people whose businesses are faltering or have crashed.
Three-quarters of their clients are related to the dotcom world, and Tuzman and his colleagues advise them on everything from recapitalisation to liquidation and fire sales, with a bit of grief counselling thrown in.
They are looking to expand: Tuzman was in Europe last month, looking for potential partners. He predicts a great need for such an operation, with a new wave of dotcom failures to come; last year an estimated 130 start-ups crashed in the US.
"It's possible we will have a second much higher peak (of failures), because there are a lot of companies that have been propped up," says Tuzman, whom Internet World magazine included in its list of 25 unsung heroes of the Internet. "The venture firms don't want to recognise the losses in their portfolio." With hindsight, Tuzman says, he can see how govWorks could have worked had they not been carried away by the market.
"The software turned out to be exceedingly valuable and the idea was fundamentally viable. What happened - and I'm not casting culpability - (was that) we bought into a way of approaching business development that was very much in vogue, believing in the mantra of 'go big or go home', grabbing market share rather than taking a more methodical approach. We tried to grow it under a set of rules that turned out to be bunk."
They had set out to raise $9 million, but in the "frothy market" of December 1999 they found investors offering them more than four times that amount. Tuzman says they told their board in January last year that sales were going slowly and wondered whether they should be expanding so fast.
"We had board members and investors among the elite in American business - they weren't Internet kids - and they said: 'you don't know what you got, kid, you never turn away cheap money.'
"All the things that today seem silly and clichΘd, at the time everyone said them with great religious conviction, and we said: 'yeah, of course you're right.' It turns out the more common-sense approach would have been to reject some of the capital."
Where did the $60 million go? On salaries, pay-offs, a very expensive marketing and advertising campaign and the usual start-up expenses of equipment and offices. Tuzman and Herman are turning their painful lessons into a book called Inside The Bubble: The Seven Sins Of Early Entrepreneurship.
"You really see people's characters, including your own, in the crucible of crisis. Everyone wanted to be my friend at first, but when the market crashed and things went awry, you're persona non grata; everyone heads for the hills and you're left to take the bullets. I feel like I have a much better bead on who my friends are."
Talking from New York, Herman said the new business is not as exciting as govWorks, but "it is a business that makes sense. GovWorks was amazing, it was the opportunity of a lifetime, and I still believe very strongly that electronic government makes sense".
From a business point of view, however, govWorks has proved a success at least for somebody: the film makers, who had no idea that their documentary about this new world was going to capture the dotcom story in microcosm.
In fact, they had thought they would be cataloguing the rise and rise of a billion-dollar success. "It was almost like the gold rush," said Hegedus from her New York office. "At the time we started it, it seemed that everyone would end up as millionaires." Tuzman and Herman have climbed off the roller coaster, but they hope their ride, which has so delighted cinema audiences, will now earn them recognition of a different kind.