:: Last time Hypernix ::

It's kind of unfair picking on a company like Hypernix, and I know it is yesterday's news, but the story is such a classic, I just have to tell it again, there is one thing important here. Last time, I promise.

For those of you not familiar with the ordeal, Hypernix started working early 1999. By May 1999 it has released its product, a chat-on-site browser add on. It did it ahead of about 20 Israeli Start-Ups with practically the same mission statement. Following a parallel path it rose to power in mid 1999 with a serious of evaluation-increasing rounds of finance and a much hyped deal with C|Net. By the end of 1999 investors gave Hypernix a mind-boggling value of $85M and the number of people who have downloaded the product (Gooey) neared one million. According to Globes the company was negotiating an M∓A. Company value should have been around $150M. Hypernix became the role model for many Wadi entrepreneurs. One just couldn't avoid explaining again and again that this was "paper value", people believed what they read in the papers, and what they read was a huge success.

Things turned around for Hypernix just as fast.

By early 2000, the company started running out of cash. When the NASDAQ shook its tail, investors started looking for revenues. Hypernix had none. Investors here in the Wadi started getting offers to invest in the company in forever decreasing numbers. Hypernix even tried to issue on the Tel Aviv stock exchange (or so was reported). By June, when it almost reached bankruptcy, and after most employees were laid off, a saver was found. Siga, a publicly traded company agreed to buy Hypernix for around $13M in stock and cover its debt. I was skeptic when it happened (Wadi List #0051), so the news of the deal being called off didn't shock me. Now, August 2000, a year and a half down the road, Hypernix is writing the last chapter in its book of life - chapter 11.

It is a sad story, of a dream, and how it ended. And at the same time it is a common thing. The courage of the entrepreneurs, them being naive, the faith of the investors, them being greedy, the admiration of the public and press, them being envious.

So what is the important lesson? Simple - things can go wrong.

And though this is a simple lesson - people tend to forget it.

So don't.

Things can go wrong.

Here is the keyword to remind you: Hypernix.

Wadi Writer #1 (Gray)

WadiList@mail.com

Links:
http://www.hypernix.com
http://www.siga.com
http://www.cnet.com

Wadi List on the Hypernix "acquisition":
http://www.oocities.org/wadilist/0051.htm