Tech Company “De-friends” City, Investors

City Desk IconThe city’s latest great tech hope, Software & Co., has swiftly and suddenly left town, leaving behind an angry mob of scammed investors, jilted customers, and red-faced city officials. Its abandonment of the city’s much-touted “High-Tech High-Rise” building (formerly known as the Main Administration Building at the old Bellmet Manufacturing complex) renders Mayor Wilders’ “22nd-century incubator” devoid of tenants or much of a future.

S&Co.’s main number has been disconnected, its Web site has vanished, and the known homes of the company’s CEO and COO had for-sale signs posted in their front lawns yesterday. The company has vanished, as have its investors’ funds.

“We don’t know where they are, and we’re beginning to think we don’t know who they are,” said a perplexed Mayor Wilders, who just eight months ago badly sliced open his hand when he christened the opening of the High-Tech High-Rise with a bottle of sparkling apple juice. “I can tell you one thing: They certainly won’t be getting back their security deposit on the building.”

Trouble started mounting for S&Co. last month, when it had to pull its debut software product 2Face, an application for the popular social-networking Web site Facebook that allowed users to keep tabs on their accounts with another, less functional, social-networking site called MySpace. There were reports out of the 19th floor of the High-Tech High-Rise that the application fared poorly with focus groups, but the company’s leadership disregarded the feedback and released the application anyway.

It was an immediate disaster.

Apart from Software & Co. employees, who were required to load the application onto their Facebook pages, exactly 27 Facebook users – out of an estimated total of 22 million – signed up. Every single one deleted it within a week, citing complaints about porn spam, crappy bands soliciting “friendships,” confusing and awkward design, and incessant bugginess.

S&Co. pulled 2Face, telling analysts and investors it would “take this valuable market feedback and put 2Face through another round of R&D, which will result in the world’s next killer app. Guaranteed.” But this second R&D phase lasted only three days, when an S&Co. intern stumbled upon SpaceLift, a similar Facebook-MySpace application that actually works. At press time, SpaceLift had 43 active users – close to, but not really, twice as many 2Face users.

The intern, WatsonUniversity junior Joel Morrison, tells the City Desk in an exclusive interview that he told his superiors about SpaceLift on Friday. When he went to work on Monday, he found a dark office behind a locked door.

Morrison says he was initially shocked his employer would skip town so suddenly, but in hindsight isn’t that surprised. “I should have known something like this would happen after I saw the looks on their faces when I told them about SpaceLift,” Morrison said. “Remember in Letters from Iwo Jima, when the Japanese soldiers finally realize the Allies are going to beat them, and then they all commit suicide? It was basically like that.”

This is a familiar tune for the City business community, which has been angling for a tech sector since the late 1990s. Each of the City’s three previous tech-incubator efforts before the High-Tech High-Rise has been brought down by the failures of their own flagship companies:

  • Computer City, opened in a former strip mall in 1997, met its demise when the founders of e-Craft realized customers preferred testing sparkly paint before buying it.
  • Genius Commons, housed in the defunct City Market in 2001, kicked the bucket when the executives of OilChange.com were convicted of fraud in a class-action lawsuit. “There was no way,” a defense attorney memorably said, “that my clients could have known that the Internet wouldn’t be able to change your oil.”
  • And Successville, which revived a former hospice, shook hands with Old Scratch in 2004 when network-solutions company Connectosaurus admitted it had no clue what service it offered.

But maybe Software & Co.’s failure is for the best, according to local tech analyst Jack Post of FogBrewer-McShane. “Software & Co. was in trouble from the get-go,” he said. “I mean, consider that 2Face was the only application of theirs to be good enough to make it to the market. They were working on some others that were absolute stinkos.”

Post said he knew something was up two months ago during an S&Co. conference call with analysts. “Someone on the call asked the CEO how they were going to monetize 2Face – how were they really going to make money off this thing?

The CEO, Post said, abruptly hung up.
- Craig Gaines

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