In 2001, one of my favorite entrepreneurship movies about the “Dot Com Bubble” in the late 1990’s was called Start up.com. It followed two partners, Tom Herman and Kaleil Tuzman who started Govworks.com. It was the stereotypical start up story of that time where the company rapidly went from idea to VC funding to financial crash. Where are they now over 20 years later and what can they still learn their experience?
On The Small Business Radio Show this week, one partner, Tom Herman is now the founder and CEO of Meta Carbon which was dreamed up in the back of a Grab Taxi in Singapore. He’s been building online software for the last 25 years in media and advertising. His latest startup combines sustainability, carbon offsetting, blockchain, NFTs, and brand engagement.
Tom is not surprised by the enduring popularity of the movie. He adds that “while it doesn’t totally represent what happened in our company, it did represent what happens in VC funded companies.” Tom says he is still struggling with the same challenges at Govworks while building his current company. One is focus; “How do I stay focused when there are so many opportunities out there and funding sources want me to build revenue traction?”
Another challenge is how to be effective business partners; “There are so many benefits and risks.” With Kaleil, he handled the business and Tom worked with the tech. He suggests putting together a “founders’ agreement” where it says what everyone must agree on for major decisions inside the company plus vesting on all founders’ shares; “with this provision, departures of founders then become easier.”
Tom is now building his company, Meta Carbon which is designed for brands to engage their customers on climate change; “People pick the carbon offset by playing a game for the activity they are involved in.” In this way, he helps brands build experiences with digital collectables with that include carbon offsets to meet the sustainable development goals to address climate change.
Get the latest headlines from Small Business Trends. Follow us on Google News.
Image: meta-carbon
Businesses built on VC funding are far from typical and a fairly recent phenomenon. The more common path is to identify a need in the market, start filling that need, and growing as sales/profitability allow. Both ways can work, but each has a very different set of incentives and decisions to make.
Startup.com was a favourite of mine too, and I learned a lot from it – especially that it seemed that the founders spent more time on raising investment funding than building the business (whether that’s true ofr not, it’s the impression I got from the documentary).
I later built my own eGov startup which handled AUD 1 billion of government grant funding and our first client won an achievement award from its Federal Government Minister. It achieved 99.5% compliance by grant recipients, and maintained a 95% satisfied or very satisfied rating by users.
That business ceased abruptly when a larger company managed to get a whole of government contract which we could not have done. So we became investors. As an investor I remembered some of the risks in Govworks, especially the third founder issue, which came up with one company seeking investment funding.
My permanent exit from running an eGov company came when, at a presentation of our product, a consultant asked “so you’re 60 years old – what happens when you die?” I guess that was a reasonable question, but not very nice in front of the government people who had asked for our presentation. Nevertheless I decided to shelve the business and become an investor. That way my age is (hopefully) irrelevant – I’m now 76 and still running the investment business (listed tech stocks) which – despite the downturn of the past few years – has grown 1,260% since 28 Dec 2012.