IFusion was an Internet startup that did what most of them do -- went bankrupt. I hired on as a developer in mid-1996, when they'd been in existence for around a year. The product was ArrIve, an Internet so-called push product. We released our beta March 15, 1997. The company filed for Chapter 11 on March 28th. The hapless remains were purchased by a couple months later. End of story.
Sorta. ;) I still think about it a lot, and I'm not the only one. One ex-employee put up a web bulletin board for information and rants. It was very, very active for months. A couple of threads rank among the best humor I've ever seen on the Internet. Other threads were purely frothing at the mouth. A few were serious efforts to analyze what went wrong.
I doubt if anyone has the whole story on why it blew so fast and hard. IFusion had made something of a splash for a while, so in the months that followed there were a number of news articles on it. I talked to a dozen or so journalists. Most of them actually quoted me -- correctly, too. I was especially tickled to see my name in the Wall Street Journal. Only time that will ever happen, I'll bet.
I think the primary killer was too much money. Yep, that's right and I didn't mindo a word -- too much money. The founder, Michael Recanati, was a billionaire in his own right and he got The Prudential to put up around $12 million. He then proceded to mow through it at a staggering rate. One of the tech leads said later that Michael didn't try to found a startup, he tried to found a company. Big offices rented on long term leases, fancy logos, fast hiring of lots of people, and boy did we have a lovely booth at Comdex.
My job was an example of some of the waste. Not the job itself, I hope! I busted ass and I produced. But here's what I mean: There were only three employees in Seattle. I hired on expecting to work out of my home office for at least the first year. I wasn't even counting on getting a machine right away. My wildest dream of avarice involved getting an ISDN line run into the house.
Instead, I not only got a Dell P200 with 64meg of RAM, but for just three people they rented a nice office that could have held twelve easily and twenty with crowding. The guys who came out from the head office in Neew York said we'd be expanding soon and we'd need the space.
I scratched my head. My boss was offended by the waste of money and complained. He got told not to worry his pretty little head. We moved in. When the company went bankrupt, three people moved out.
Multiply that kind of waste by many times and think about the money involved. If I was starting a new company, I'd consider myself lucky to have as seed capitol just what the Seattle office cost!
The other killer was lousy management. My immediate boss was OK -- a genius coder rather than a real manager, but that was fine for that level. However, his boss was another story. The man who should have been keeping all the ducks marching in the same direction gave no power to the schedulers and thought problems should be dealt with by abusing people. Further, he seemed to think information was best kept nice and safe by not spreading it around too much. The result was a steady increase in depression and wasted work.
As a classic but oft-repeated example, I started getting calls chewing me out for missing a deadline when I had never been told it had changed. I'd been working hard on something that turned out to be less important. I was chagrined. I asked several people what I should have been looking at that I'd missed. I figured there was a public folder or a spreadsheet on a share. Nope. Nada. There was no way I could have known.
Another classic, though not repeated, example was when headquarters in New York caught wind of how bleak some folks were getting. To everyone's surprise, they responded. In a way. I was in Virginia at the time, where most of the developers were, when this guy Andy showed up, saying he wanted to find out what was wrong. He didn't speak to me at all, acted like I wasn't there, but I did get to overhear him talking with my boss. Steve gave him chapter and verse. The guy smiled and nodded and told him everything was OK. He didn't even get out a notebook and make a pretense of writing it down.
When Andy finished his little "Cheer up the troops" visit, the entire office seemed buried in a black cloud. One of the tech leads went home and didn't come back for three days.
An incident the following week shows how sadly desparate we all were for a few signs of organization and planning. A guy who was new with the company called a meeting of the tech leads. When the meeting broke up, I was shocked to hear laughter and brisk chatter. The guy had put up big lists of everything that was going on, asked people to add to it, and got the list rank-ordered. Everyone was pathetically pleased. I'll bet more code got written in the next hour than had been written in the past week.
However, it turned out this guy hadn't been granted any power by my boss's boss, who proceded to completely ignore all the schedules and continue jerking people around at semi-random.
I think it's miracle of persistent excellence on the part of many coders that we ever got a beta working at all.
But we did, and ArrIve was a pretty baby. It was slow, still had some bugs, and the content wasn't as interesting as was needed. Still, it crashed less often than MS Word. We put it out on the web.
We'll never know if it would have found a market. Maybe, maybe not. The company was spiraling financially and moral was crashing even harder. When the money numbers first started looking tough, I figured there would be layoffs soon. The Seattle office, a small outlying group, struck me as a good candidate. As weeks and then months rolled by, I ceased being releived that I still had a job and began getting real pessimistic about the company as a whole.
Management was not just surly and disorganized, they also had no guts. If they couldn't bite the bullet and make cuts, the company was a dead bunny.
And it was. Two weeks after we put up the beta, The Pru installed a new CEO. A couple days later, the company was granted Chapter 11 bankrupcy status. The new CEO fired everyone, stiffed us on our last payday and all outstanding expenses, and then re-hired about ten people the following Monday. The idea was they would try to sell an ensmalled version of the company.
I'm not sure that was ever feasible, but we had gotten serious interest from a couple companies prior to the bankruptcy. However, those of you who've done development work know that six coders can't support over a million lines of beta code, especially when the folks who wrote the code have been so badly burned they wouldn't even take a phone call.
Turns out the Pru had never dealt with a software company. They dissolved the company like you might a retail or manfacturing operation, where you have some value in inventory and equipment. However, they didn't have much in the way of physical assets -- most of the computers were leased -- and source without developers has no value. If they had kept on twenty people and not shafted the others so badly, they might have had a chance of selling the remains. They did get some nibbles. However, everyone who took a closer look backed away fast.
The remains were eventually sold for minor money, relatively speaking. The company that bought it out was making a gamble that the patents might have value. Probably not.
But that leads to one closing bit that is very cute. I mentioned that my boss wasn't really much of a manager. Well, one of things he did badly was paperwork. Such as, signing the patent application papers and returning them. He was disgusted with the ridiculous scope of the patent and didn't want to do it at all. However, he got told he'd be fired if he didn't so he agreed. And then forgot. And so did everyone else. Until the closing days of the final sale.
He got a call from a lawyer who basically said, "What will it take to get you to sign the papers?" Steve thought about it. He'd been screwed out of two weeks pay like everyone else, wound up with a great job at Microsoft and wasn't hurting for money. However, two people he knew had been nailed bigtime for unpaid expenses. One of the folks he hired found out after the bankruptcy that IFusion had never paid his moving bill -- $5000 -- and the small print said he had to pay up if his company didn't. Steve felt real bad about that when it came out.
He asked the lawyer to make his two buddies good on their expenses. The lawyer was real surprised. "Don't you want anything for your self?" Steve thought but did not say, "I know you don't understand, you're a lawyer."
And the checks came through! Hooray for Steve!
I'm sad that all our hard work is just going down the bit drain. Yet, I learned a lot, worked with some really great coders, and it turned out OK for me in the longer run. And I'm glad to have this final, nice story at the end.
Last update: 9/27/97
Jane E. Hawkins
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