What happens when it all goes wrong?

I have been meeting with a decent number of startups in and around Toronto lately. I have been doing this for a few reasons. The most obvious is that I want to find interesting startups to profile here on StartupNorth, I want to encourage people to keep at it, and more selfishly, I find startups, whether they are my own or someone else’s, fascinating.

When I came across this chronicle of the ArsDigita story, I was fascinated. Philip Greenspun went through it all. An incredible ramp up of his business, strong response from customers and a solid development team that was producing really great products.

If you remember Ars back then, they were a big deal. The Ars Community System was the top notch social media platform of it’s day, and a lot of companies are just now starting to replicate it, including a few Candian startups. (Whether or not they know they are simply replicating Ars is another story).

You will have to read the story for yourself. Take what lessons you can from it, it is the story of what happens when investors don’t play nicely. ArsDigita was a strong company, profitable and reasonably well run, but it only took a few petty VCs to tank the whole thing.

If that can happen to Ars, what could happen to your little startup if you took money from the wrong source?

Read On »

  • http://www.matroberts.com matt roberts

    I’d caution against taking to much of this embittered founder story too seriously. Especially, considering the dates it took place (2000) – when most founders leaped into VC arms only to run into the meltdown – and blame the VC’s as things turned sour. Michael Yoon has a more balanced and objective view imho. He also points out that many of their customers were in fact other dot-coms that melted away as funding dried up. I bumped into the ars gang in the late 90′s when using tcl tools – good bunch.

    http://michael.yoon.org/arsdigita

  • http://www.matroberts.com matt roberts

    I’d caution against taking to much of this embittered founder story too seriously. Especially, considering the dates it took place (2000) – when most founders leaped into VC arms only to run into the meltdown – and blame the VC’s as things turned sour. Michael Yoon has a more balanced and objective view imho. He also points out that many of their customers were in fact other dot-coms that melted away as funding dried up. I bumped into the ars gang in the late 90′s when using tcl tools – good bunch.

    http://michael.yoon.org/arsdigita