Back in May of 1998 GovWorks.com was founded and had 8 employees in it. The idea of such an internet service was inspired by the best friends and two co-founders: Kaleil Isaza Tuzman and Tom Herman. They have left their jobs to start work on the website. The company has started with a couple of computers, a comparatively tiny office and one car. With its very quick extension just in a few months the company grew to 30 employees, but it was the beginning. Their goal was just pompous: to transform the local payment system to the size of a federal and then to the global worldwide transaction system. Even the slogan of the company was nothing if not immodest: “All payments for all governments”. He tried to get the support of organizations that represent many different municipalities. For instance U.S. Conference of Mayors. They were so-called umbrella organizations. With the support of them GovWorks could quickly become a nationwide. Unfortunately it did not work out that way. Tuzman and Herman undervalued the trust little cities have to the endorsements of the umbrella organizations. GovWorks expected big contracts to come quicker than they actually came. As the result in the beginning of 2001, the company was not any more in business.
The marketplace of their goal had an estimated of almost 600 billion U.S. dollars. Of course such a platform was more than unpredictable. The lack of experience just could not give them a chance to estimate it. Despite all this risk they took the right option to raise initial capital. It was a merit of Tuzman, who had a good and clear feeling and point of view in business. However, GovWorks had numerous competitors, who were offering pretty similar services and sometimes even lower...
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...learly a specific job description. The lack of determination of how intelligent, easy to operate with, comprehensive, productive employees they were hiring brought dozens of unnecessary people in the company. The end of the ‘Dotcom Bubble’ made them fire three fourth of the personnel in a half a year.
One of the most crucial problems was that the company simply ran out of money. Their fallacious revenue evaluation and expectations were too lofty. There were a few aspect that no one could predict: as was mentioned, the unprecedented fast grow and a dangerous untested marketplace. Plus to all this they were just the victims of bad timing. In turn, board members and investors were often disappointed. As the result you have costs that were much higher than expected and revenues were the opposite down poor. All these were the reasons of the insolvency of Govworks.com.