LIM, MARYLYN GRACE C.

OOA

The founder of ArsDigita was Philip Greenspun. ArsDigita is a famous startup in the world both as the embodiment of a new model for software consulting and as an all-too-colorful example of the dangers of VC. As of now, after ArsDigita went down in 2002, Philip Greemspun focuses now on his passion for photography and being a helicopter instructor.

The reason of the formation of this startup happened when Philip Greenspun went to Alaska for his photo blog project. He was documenting all his travels then he will email it to his family and friends. He also published his photo on the web page. After a while, he started getting questions from users asking questions regarding photography. He then will answer all the questions one-by-one. So he decided to make a forum on his server so that there are users who have the same question, he will just answer one of them and they will both het an answer. And sometimes other users answer those questions for him. So that’s where the photography community site came from.

After that he decided to write software to run his community site and he decided to post the code as an open source project. Then he started receiving calls from big companies that wanted to use the software but it needs some customizations. So that’s when he and his friends decided to start a startup and that’s where ArsDigita came from.

One of the big problems they encountered was about the venture capitalists. ArsDigita was profitable with $20 million in yearly revenue and they had $3 million in profits. But the thing is that they don’t have venture capitalist. So the underwriters won’t take them to public unless they have a big name venture capitalist like Kleiner Perkins.

The underwriters don’t want to do research in a company. They just wanted to know who are their venture capitalists, then they will decided if they will take the company to public or not. For me, I think people used the services of ArsDigita because this caught their interest. It’s something that they like to interact with. One of the unique things about ArsDigita was about their marketing and sales. It’s usual for us that if we advertise our products we use ads but ArsDigita was different, their marketing and sales was educational. They will teach people stuff and maybe some of the people they taught will become their customers.

For me, if I was in a startup just like ArsDigita, I think I will focus more on getting really good people who shared the company’s vision. I won’t focus more on competition because I know that we are different from other companies and that we are unique. And I have faith in my company. I think if focus on competition t might get more problems and that could cause my company to fall.

As a conclusion, after I read this case study, I realized that there are so many biases in the business world. One is that underwriters won’t take a company to public unless the company has a venture capitalist. They don’t even check what does the company does. That’s why some of the startup fall because they were not checked carefully, as long as you have venture capitalist there will be no problem, but that’s wrong. Before a company can go public they should check what do they do, they should have a background checked first. It’s not important of the company has venture capitalist, as long as it will be successful in the future then it is good for them to go public.

LIM, MARYLYN GRACE C.

OOA

The founders of Fog Creek Software were Joel Spolsky and Michael Pryor. Joel Spolsky was inspired by ArsDigita. He wanted to start a startup just like what Philip Greenspun did. He also wanted to have same values as Philip Greenspun regarding programmers, that they wanted to be programmer-centric and a place where they wanted to work.

 At first, they don’t have any idea on what they are going to do. They just have any idea that if those punk kids who just graduated from college and knew nothing about anything were able to go public with $100 million valuations, surely they can do much well than those kids do.

After Joel Spolsky started a startup, he started writing Joel on Software to share his thoughts about software development, management, business and internet. This was his programming blog. And this was his strategy for software startups. He wanted to create a popular blog to get attention. He founded Fog Creek Software in September 2000 but sadly his consulting bus collapsed by November 2000.

The problem they encountered was that when the company was growing, they will hire consultants to help the company grow more quickly, but when the company is shrinking, they will immediately fire all consultants. Their market was going down by 0.002 percent instead of growing, so they decided to first fire all consultants. That’s why their consulting business totally collapsed.

Luckily, Joel Creek Software hadn’t grown very much and it didn’t have much consulting business to lose so they were able to survive it. After the consulting business collapsed, they now focused themselves on producing an internal bug tracking application that became their first product which was Fog Bugz.

Even if their original plan didn’t work they were still able to recover from the fall of their consulting business. After they shipped Fog Bugz, they saw a small yet steady-growing sale each month. They started earning $5000-$10000 a month selling Fog Bugz. This was enough to cover all their expenses.

Joel Spolsky had this unique idea that he wanted to have a big consulting company and then he will build a software company inside the consulting company. Although he wasn’t able to gain accomplish his plan, but he was able to gain experience from it and next time that he tries to do it again, maybe he will be able to succeed. I think Fog Creek Software won’t exist it ArsDigita and Philip Greenspun didn’t exist, because Joel Spolsky got his ideas and inspiration from ArsDigita and Philip Greenspun.

I think Joel Greenspun can still accomplish his idea of building a consulting company and a software company inside it, as long as he believes that he can do everything and as long as he focuses on it and he put his heart in it. After reading this case study, I realize that ArsDigita was able to inspire other people to start a startup that has the same values as they had despite what happen to their company.