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ArsDigita Shut Down

Posted by michael on from the denouement dept.

An Anonymous Coward writes: "Looks like it's official. Philip Greenspun's ArsDigita has been closed, its assets sold to Red Hat. No word on what Red Hat is planning to do with the GPL'd ArsDigita Community System." You may remember ArsDigita from its grand plans during the dot-com boom.

8 of 208 comments (clear)

  1. MIT CS in one year by peter303 · · Score: 4, Informative

    IT appeared to be a selection of MIT CS courses in one year, from the syllabi on the web. Many of the courses appeared to be little different from those at MIT (I took the MIT ones) and many of the instructors had MIT backgrounds. The AD course were taught in intensive serial fashion at a month each.

    My guess is the MIT OpenCourseware initiative wil put a similar range on the web in upcoming years. The first installment will be this autumn according to the MIT site. (If bore through MIT's online course catalog, many syllabi are already on the web.)

    The benefits of a MIT education, tempered by real-world experience, without the MIT prices, and without the MIT diploma.

  2. Feel bad... by Fnkmaster · · Score: 5, Informative
    I know several of the early Ars Digita folk who Phil plucked out of MIT. I sympathize with Phil Greenspun greatly on this - though he's no longer actively involved in the company, it still feels awful to see your creation boom up and then pop. As he said in his post on his web site, though, you make 10 decisions every day as an entrepreneur and you can't second guess them all with 20/20 hindsight.


    My company, which grew over 2 years to 35 employees, raised 5 million dollars in venture capital, and was making over a million a year, slipped out of my control entirely earlier this year. We got an incompetent CEO put in place by our venture backers. Since we (the founders) had lost control of the board of directors there was nothing we could do about it. Of course, at the time, we needed the venture capital to fund development and attract good management, which we needed to close deals, etc. etc.


    Looking back on it, at almost every stage I made lots of decisions, but most of them were the right decisions at the time. The decision to take VC funding was unavoidable at the time - we were coming into direct competition with companies that had already raised 30 to 40 million dollars. Ironically, those companies went out of business long before we did because their burn rates were outrageous.


    Just my personal experiences anyway - I started out knowing a lot about technology and very little about business, and I know a lot more now. If your business if fundamentally sound without venture financing, then you don't need it. If your business is one that requires so much up front venture financing that you anticipate losing control (>50% of the shares of the company), before you get through the initial growth phase of the company, I would recommend rethinking starting that business, unless the returns seem outrageous. Use VC wisely, and only sell minority shares of the company during the early years. Once you get off the ground, you'll be in a much stronger position to negotiate for further funding anyway.

    1. Re:Feel bad... by smagoun · · Score: 5, Informative

      The parent is correct. I used to work for the company he founded. Although I didn't have nearly as much contact with our VC's as he did, I'm convinced that a lot of the bad decisions that hurt the company were pushed down from the VCs. They really are vultures, driven by their desire for a 1000% ROI within the first 2 years of their investment. They don't give a shit about you. Read that again. They don't give a shit about you. They're investors, and they care about their money. That's all.

      My experience at the parent poster's organization is a stark contrast to my experience at another employer, which was privately financed from the start. We didn't have the luxury of $5 million in the bank - our revenues had to support us. We didn't get fancy hardware, expensive chairs, catered lunches, or any of the other usual dotcom goodies. Most importantly, we weren't bloated with extra people sucking on our payroll. Instead, we busted our butts with what we had and got by on the bare minimum. We made our own decisions, and at the end of the day the company was sold to another one. VC's didn't get a dime, and the employees were very well compensated.

      While it's much more difficult to survive without venture cap funding, it's worth it. You make your own decisions and don't have to kowtow to the whims of VC's - none of whom know your business as well as you do. Take as little funding as possible from the VC's. Dip into your savings, take a bank loan, hit up your friends + family. Don't hit up the VC's. You're the one taking a risk, shouldn't you be the one making the decisions and reaping the rewards?

    2. Re:Feel bad... by Ed+Avis · · Score: 4, Informative
      Use VC wisely, and only sell minority shares of the company during the early years.

      Well, that was Greenspun's plan as well. The cofounders sold a small stake in the company to two VC firms in exchange for two seats on the board. Two board seats would not normally be enough to exercise control. However, there were several board positions left unfilled at the beginning, and appointment of new members had to be approved by the existing board members - so the two VC board members plus the chief exec. they appointed managed to get effective control with a minority stake. A 'shareholder agreement' and Delware's company laws (which I'm told favour management rather than shareholders) enforced this.

      I guess the lesson is: be very very careful, check for loopholes, and be suspicious if you're asked to incorporate in Delaware rather than a state with more shareholder-friendly regulations.

      --
      -- Ed Avis ed@membled.com
    3. Re:Feel bad... by Reality+Master+101 · · Score: 5, Informative

      We got an incompetent CEO put in place by our venture backers.

      Word. I raised $4.5 million, later another $15 million, only to watch the company that I and my partner built slam into the ground with a huge crater. At the time, it seemed like a good idea to bring in a CEO "with experience", but the guy was utter, total fool. He bought into every dot com cliche you can think of, including "spend as much money as possible to create an illusion of a large company so we can go public".

      It's a much longer story that this, but one of the lessons I learned is that I should have trusted my own business instincts and not assumed that some "gray hair" is more competent than me.

      I agree with you: there are VERY few scenerios where you "need" big VC capital. In fact, I think it's almost a disadvantage. It's SO easy to get into a mode where you waste money just because you have it. As you saw, the money ended up being a curse to your competitors. I think that's true more often than it isn't. The only way to use money like that is to sock it away and pretend it doesn't exist until you REALLY need it. Frugality shouldn't end just because you have money in the bank.

      --
      Sometimes it's best to just let stupid people be stupid.
  3. Re:ArsDigita University? by chriscrick · · Score: 5, Informative

    We're still out here. The university itself closed its doors at the end of the academic year last July, and the alumni acted to save everything we could from the ashes. We run the aduni.org site, as others have posted on this thread.

    All of our content (80 GB worth) is available online -- about 275 hours of lectures, problem sets, exams, notes, and solutions -- with courses like Structure and Interpretation of Computer Programs (the much-loved MIT Scheme intro to CS course), Discrete Math, Algorithms, Theory, AI, Databases, and a couple of courses in Software Engineering (one of which is taught by Greenspun).

    But we're a shoestring alumni organization that can't afford the bandwidth to stream the videos very well, unfortunately. So as an alternative we'll ship an 80GB hard drive full of the stuff to anyone who wants one for $220. Everything's available under the Open Content License. E-mail me (chris@aduni.org) for more details.

    Thanks.

    Chris

  4. Phil Greenspun's version of the litigation story by anomaly · · Score: 5, Informative

    The story is no longer on the web, nor is it in google's cache but it is available from the wayback machine

    --
    But Herr Heisenberg, how does the electron know when I'm looking?
  5. I do not know if it is skill...... by graemetheanalyst · · Score: 5, Informative

    ......but they certainly deliver results.

    I used to work for an investment web site that used Arsdigita. I was an investment analyst and was closely involved in specifying the site.

    Originally development was done by one of those web development company's that came out of nowhere to be worth billions at the height of the dotcom boom (I am sure every one knows the type). They failed to deliver anything that worked after months. The little that almost worked was overcomplicated (e.g. java applets to implement cascading drop down menus).

    When we switched to Arsdigita we had some pages working within weeks. These used data extracted from several different financial data feeds (which are complex) which was stored in database (which they also implemented) and content from a content management system (which they also implemented).

    I worked with them both to specify the site (what we wanted on what page, how to calcualte it, where to get the data from) and to debug it (they did the code, I did the financial maths) and I thought the process they used very efficient. Maybe be it is approach rather than, say skill at coding, that made them efficient the answer to the question may depend on how you define skill.