Rx Remedy, a consumer health publication with a circulation of 2.2 million, hired Avalanche in December 1996 to create a Web site by May 1997, said Valorie Weaver, Remedy Publishing exec VP-general manager. Fourteen months and $280,000 later, Remedy Online still doesn't have its Web site and has severed ties to Avalanche. However, the site should be ready for a preliminary launch next month.
Peter Seidler, Avalanche chief creative officer, said problems arose because Remedy kept changing the site's technical specifications and the health magazine never signed a contract with Avalanche.
Ms. Weaver said Remedy didn't receive a final version of a contract until months into the project and its lawyers advised against signing it to avoid getting stuck in a contract dispute.
"I see this all the time with new-media companies," said Peter Dolch, president of Thaumaturgix, which specializes in Internet infrastructure. "We've bailed out a lot of them because they tend to come from a heavy design background and they don't understand the technical scope and cost of projects." Thaumaturgix, which Avalanche initially contracted on the project, now is finishing up Remedy Online alone.
Avalanche shouldn't have delivered a fixed-price project when they had no idea what the deliverables were, Mr. Dolch said.
Current chief operating officer Troy Tyler, who joined Avalanche in Aug. `97, agreed, and admitted that the old Avalanche underestimated Remedy's project. Mr. Tyler said that like a lot of new media companies, Avalanche had financial strains with lots of single project jobs and ad hoc procedures.
"The new Avalanche is a tough- love Avalanche," he said. "We only accept work we know we can do well and only projects we can handle. We don't sell projects to clients anymore. . . . I would be hard pressed to say that we would take on that same project now."
Ms. Weaver said Avalanche promised completion dates of June 15, July 4 and then August 1; privately, the magazine decided to wait until September for a full launch.
FINISHING THE JOB
"By midsummer it became clear we were not going to have a site anytime soon," said Ms. Weaver. "We started to get some pretty high-pressure phone calls saying, `You have to pay us more money.' I was getting tougher and tougher about giving any money until I saw work."
Then Ms. Weaver received a phone call from Thaumaturgix's Mr. Dolch, who asked Ms. Weaver if Remedy would deal directly with his company to finish the job.
Ms. Weaver decided to pay Thaumaturgix $45,000 to finish the back-office work. Remedy's total outlay was $235,000 to Avalanche and $45,000 to Thaumaturgix, according to Ms. Weaver. Avalanche officials declined comment on the dollar figures.
A launch date of Jan. 8 was set. Meanwhile, Avalanche was starting talks with Razorfish.
Another meeting followed in January. Mr. Tyler and new Technology Director Michael Drapkin told Ms. Weaver that it could only finish the job on a time-and-materials basis.
"I just looked at them and said `You've got to be kidding. We don't have unlimited funds and we're already dealing with a site that's been delayed more than six months,' " Ms. Weaver said.
$370,000 MORE REQUESTED
Ms. Weaver said a fax came two days later with an estimate of another $370,000 to finish the job. She said Avalanche agreed to drop that to $219,000, but it still was beyond Remedy's budget. Ms. Weaver said, "That week, they actually did wrap up most of the remaining design work."
Thaumaturgix has taken on the project, and Mr. Dolch said about a month's worth of both design and technical work is needed.
"In spite of the technical problems and scope [problems] that both Avalanche and the client were responsible for, I still feel good about what we did for them," Mr. Tyler said. He estimated Avalanche put in work equal to four or five times what Remedy paid for.