The Startup Challenge

Adam Weir

Most entrepreneurs in the 90s, hoped to make a huge splash into the untapped potential of the internet market. Many companies were formed during the internet revolution of the 90s. Every single one had the capability of becoming huge successes with large profit values. However, only a few strong companies came out of the internet revolution alive. The majority failed and went out of business as quickly as they came in. Most of the time they did not have the funds to support it, they also may of had too much competition, internal problems, or not enough interest in the product or service they were selling. A great example of one of these internet companies is Govworks.com. This company was founded by Kaliel Tuzman with the help of his friend and partner Tom Herman. This company had unbelievable potential, but it came to the same fate as most internet based companies of the 90s. Nonetheless, from the company’s formation to its death, the story of events along the way is what entrepreneurs and other business people find so interesting and inspiring.

The founder and CEO of Govworks.com, Kaliel Tuzman, started out working at the financial company, Goldman Sachs. However, he wanted to be his own boss and had ideas to start an internet company with his business friends. He wanted to do something different and was so enthusiastic about it that nothing would stop him from achieving his dreams. Tuzman came up with the idea of a website to help people deal with local government payments like taxes and parking tickets. It was an interesting idea that no one has come up with before, and it was enough to get him and Tom moving on their company. The first problem was the need of money to start the company. They went on a long mission to every venture capitalist company to invest in their idea. After much time and sometimes frustrating effort they were able to get the financing they needed. After that things moved fast, almost too fast for Kaliel and Tom to handle. In a short time their company went from a one-room office to a staff of over 200 employees and a bankroll of 50 million.

As the company grew larger and larger the two owners, found it even more difficult to control every aspect of their company. Their personal lives and families suffered because they had no time to do anything but work. Their job was taking over their lives, between Tom’s need to be with his daughter and Kaliel not spending anytime with his girlfriend. However, they spent so much time and money into this company’s success, they needed to prioritize. Everything was devoted into the company’s ability to meet their launch date of their website. Tom was in charge of the technical aspect of the company while Kaliel was in charge of finances and making sure every section of the company ran smoothly. After many long hours for their employees and constant tweaking and debugging to make sure their software was running properly, the website made its launch date.

In the beginning of the website’s life, everything seemed to be working out. Kaliel and Tom finally could take a breath and reap the benefits of having their website up and running smoothly. In little time the value of their company sky rocketed and became extremely profitable. Everything seemed to working great for Kaliel and his baby company. He gained much praise from the business and political world. However, as many will tell you, good things do not last long. Govworks.com was not destined to succeed and a long series of events resulted in its ultimate demise. The first event was a break in at their company where thieves stole some files and Kaliel’s computer with enough information on it that someone could bring down the entire website. Luckily this did not happen, but it was a wake up call for the company’s security capabilities. They did not know how vulnerable they were to such attacks and they realized how important backing up their files was.

A huge issue for the company was their capabilities to adapt to the changing market and their competition. One of the huge reasons for the downfall of Govworks.com was that after only a little time of becoming a company, they had competitor websites offering the same services they offered. These adapter companies took the good ideas from Kaliel and learned from his mistakes. They changed and formed their websites to be easier to use and more attractive to customers. Govworks.com could not adapt their website to become more user-friendly and they lost many of their customers. This resulted in large problems for both Kaliel, Tom, and the whole company.

Another powerful issue in the company was the relationship between Kaliel and Tom. They were best friends since high school and have always stayed close. However, as the problems in their company piled up, it became overwhelming for them both. They could not balance their personal and professional lives. Also the board of directors could not deal with the idea of having co-CEOs with Tom and Kaliel. After some time and many arguments, Tom chose his personal life over the company and Kaliel chose the company over him. Tom left the company that he founded on bad terms. It seemed that their friendship could have been over.

Kaliel had thought they had all their bases covered when they started this company. They were young and arrogant in the beginning. They were not prepared for how vast and competitive the market really was. Creating a startup company is no easy task even for the most intelligent person. Kaliel and Tom did not truly know the entire picture of how to form a startup internet company. Kaliel was a strong leader, but he was constantly fighting a losing battle. He tried all he could to help his company survive. As profits plummeted, so did any chance of hope. The company had to get rid of almost every single employee and eventually it was swallowed by a large conglomerate firm. The company’s lifespan was only from May 1999 to December 2000. At its peak, Govworks.com was worth about 60 million. However, one can see how much of a difference a year can make. It is unfortunate that this company ended up like so many other internet based companies. Govworks.com had great potential to becoming one of the largest and most profitable internet companies in the world.