A Conversation with Luke Fretwell

All right, we're back again. Happy Friday, everybody. It's great to see everyone for our weekly In Case You Missed It, our news roundup and kind of coverage on what's happening in the world of GovTech. It's hard to believe, Joe, we are in mid-April now and the world continues to move fast. Now for today's episode, you know, we thought about people that we could interview and different topics we could talk about, and there's someone that we have regular conversations with and always dig into the elephants in the room on things like open source and interoperability and what is a GovTech platform. And so I thought it'd be fun to bring a friend and also CEO of one of the GovTech 100 companies for this year and actually for many previous years, Luke Fretwell, on to talk a little bit about what's going on in the world of GovTech. So Luke, thanks for joining us.

Thanks for having me. It's always great talking to you too.

So you've been on In Case You Missed It before, but for those that are new to our platform, can you share a little bit about your background and Proud City?

Yeah, I mean, you know, I'm one of the co-founders of Proud City, and as you mentioned, we are an esteemed GovTech 100 company. We provide digital services for municipalities And that includes web services, forms, and payments, and meeting publishing, not necessarily meeting management, but meeting publishing. And we work with cities across the board. Our smallest municipality is 750 people, and our largest is around, I think their population is around 330,000. And as I said, work all across the country. And we started in 2016, and that's what I spend a lot of my time on these days.

Well, that's great. I know, Luke, you kind of tune into the show regularly. We're here talking about the trends like workforce. We've talked about the App Store market. We're just, you know, talking a lot about generative AI recently. But what general trends or themes are you seeing from your vantage point in the market?

Yeah, I mean, I think that— so I think there's 2 things that have started to happen, right? We had the pandemic, and there was a lot of lessons learned through that. Government, especially local governments, realized they needed to do digital better, and they also realized that they needed to rethink how they were doing that digital, how they were buying that digital. And the The idea that I think that was being sold to them was that one thing could do this really well. A monolithic company could help you do all of this. A monolithic govtech company could help you do all this. And they sort of bought into that. And they— then there was part of, as part of the pandemic, there was ARPA money that was starting to flood in, so they had money to buy this. And coinciding with that, we had a lot of M&A activity, which y'all have covered a lot about. And what's happened with that is these companies that were pseudo-monolithic companies have now become monolithic companies that are offering multiple products across all the verticals, in some cases just buying up the whole vertical. So the combination of understanding digital and having these resources from ARPA and being able to spend, and then the market kind of consolidating, and then folks realizing, wait a minute, something's going on here, and we're not actually getting the services that we thought we would be getting, and we're more sophisticated and asking, know what questions to ask now. So I think like what we're seeing is there was this boom and now local governments are starting to realize we actually think there might be a better way to do all of this, from procuring it to understanding it, to deploying it and maintaining it. And even like training folks internally to understand the ecosystem or the products better and really doing more of the digital services in-house. Because they have really great tools as opposed to the legacy GovTech vendors being sort of the Wizard of Oz and doing everything for everyone and then sort of turning it over to you, giving you a quick training, and then you're just sort of left to your own devices. And I think the shift is the sophistication with, especially with local governments, is starting to change into awareness and being more responsible with how they spend their money. When it comes to IT.

Yeah, absolutely. We're seeing kind of the same dynamics. And it's interesting, you know, the traditional path of a, you know, public servant has changed and, you know, people are bouncing in, doing a tour of duty and then bouncing out. And so it's kind of creating, you know, a lot of new thinking and also, you know, that new perspective that things have to be done differently. So I know in our conversations we've talked a lot about, you know, some of the often neglected points of conversation in the market. And, you know, one that I wanted to start with is around open source. I mean, you know, open source isn't, isn't a new concept, you know, is a fundamental aspect of how many critical services are delivered today.

Yeah.

But, you know, for those that, you know, kind of are on the fence or maybe have some of the old myths associated with open source and its role in government, I mean, how should cities be thinking about open source? And then the flip of that is going to be for industry, that's serving government, you know, what does open source mean to them, or what should it mean to them?

Yeah, I mean, I think that I would say that if you're buying technology and as a government, I would say that the number one priority should be that it is open source. And if it's not, then there are all types of problems that you're going to experience, whether it's you know, being locked in or not being able to be interoperable, or even, you know, security, right? Like, security is just as much of a problem in the proprietary software as people think it is with open source. So I think if you're a government, you know, your number one procurement should— procurement checkbox should be, is there an open source solution? It doesn't mean that everybody's going to have it, But I think that you should be asking that question because what it's going to allow you to do is not get locked in. It's going to ensure that you're using technology that is more modern and interoperable. And, you know, it's just general good practice. You know, public open source is public code. It's public domain. It's the same spirit. as fundamental civics and how democracy operates. From a vendor perspective, open source can get sliced and diced in all different ways. Some people will say that they're open source or they use open source, but they don't make it publicly available. So there's a difference there. Everybody uses open source to some degree, but not everybody publishes their code. publicly so that everybody can access it, or do they make it publicly available if somebody says, I want this thing, I want to be able to take this code and go somewhere else and have somebody else service it? So there's these nuances to open source, but fundamentally, and this is in the case of Proud City, you know, we're fully open source. You can go to GitHub, pull all of our code, and access, you know, that code. If a vendor, if a government agency wants to not do business with us and they want somebody else to do it, they can take that code and go somewhere else and host it and have somebody else do it. So I think that with open source, the benefits, at least especially for Proud City, is, you know, we save millions of dollars in research and development by deploying open source, and those costs get trickled down to our government partners, and they're not paying, you know, a substantive amount of money to purchase proprietary solutions. We're building, you know, using open-source solutions, leveraging the, you know, the community that has built it, millions of hours, millions of dollars, and government is realizing that. And so there's 2 things. There's cost savings, and you're saving millions of dollars, and development. And then there's just the innovation opportunity, right? Open source is continuously being built, and new ways of adding into it, plugging into it, making it interoperable, or making the product better, it's continuously getting better. So not only are you saving in research and development, you're also realizing innovation potential that you're not when you're working in a bubble, when you're, when you're working as a company or your government working with a company that is working in a very proprietary model in a bubble, and you don't know what type of innovation they're doing, and it shows in their product and how they, you know, show up technically and innovation from an innovation perspective with the products that they're delivering to governments. So, you know, a lot of resources are saved and the innovation potential is just so much more exponential.

So, you know, you hit on interoperability, but the big conversation or elephant in the room, I'd say, I mean, for at least the last year, maybe even longer, has been platform, GovTech platforms. How are you approaching that GovTech platform conversation?

Yeah, I mean, I think that, right, so I think that's a great— so the big thing, and this was, you know, it's back to my initial point on, you know, sort of monolithic is good, right? Because what folks were being told was that you're going to be able to, quote, integrate, right? Everything is going to integrate. We've got all these different things. We've got web services, meeting services, CRM, you know, we've got these things and they're all going to integrate. And because we're on a platform. And the platform was the sales channel, right? That's the platform. It's a sales channel platform. They bought these companies and were able to use it as a platform to sell to government, to sell these other things into government. And I think that, you know, in government, that sort of works, or, you know, and to some degree, because you know, folks aren't pre— kind of pre-pandemic aren't sort of attuned to what that meant. But I think as you start to see more people using different tools, Google Work, um, and, and, you know, all these different tools, and really understanding like what it means to integrate and, and tie in and be interoperable with other services, other companies that do one thing really well So if I need to integrate this in, I just do a couple things and do a single sign-in and connect them and the data syncs up and it's Company A and Company B and that's really great and it was seamless. That's true integration. I think a lot of people who are working, you know, post-pandemic or during the pandemic and like experiencing this were realizing that's what platform is. It's allowing other people to integrate into your program and can connect with your product easily and not, we've got all of these products, you know, and it's a suite of tools within one company. And instead it's one company and then there's multiple companies that are really great that seamlessly integrate through, you know, APIs or hooks or add-ons or plugins or things like that. And I think folks are just waking up to that.

And that—

and I don't know if people aren't talking about it as a platform, at least the local governments, they don't use that term, but they understand the concept. We want to buy the best product and integrate them in in a real way and not sort of look at it from a perspective of, oh, we've got this one company and we're going to buy a suite of their products and that's integration. Yeah, which, which, which, which they— which a lot of them don't integrate in a technical sense. They're just roll-ups. They've been bought and they've kind of rebranded. So, you know, the platform is— it's a, it's a cleaner brand, um, you know, XYZ Meetings or whatever. And then, you know, it's a platform for them to be able to sell those.

So interoperability is open by default and not a, you know, API for, uh, for a certain fee. So, um, one question I had for you just around your own journey. I mean, you've been in this market for some time. I mean, even back to when I was in government, we were working together. Um, the old days. Tell me a little bit about the, uh, the bootstrapping, you know, philosophy. We've done a lot of coverage on kind of what's happening from a fundraising standpoint and the investors that are playing a really, you know, important role in this market, but not everybody goes that same path. And, you know, you've really leaned into kind of bootstrapping your approach, and we'd love for you to share a little bit about that experience and You know, how it's changed how you approach the market and kind of how you have scaled your company.

Yeah, I mean, I think that, you know, there are moments when I wish we hadn't bootstrapped and then there are, you know, moments which I'm really glad that we had, right? It's really, I think a lot of people don't talk about things like, you know, enough and that it's lonely being an entrepreneur or being a founder, or in my case, co-founder. It's really tough. And especially, you know, I think just in general, it's really tough, but especially in the GovTech market where there's a lot of nuances to selling to government that make it hard to generate market as fast as you can in a consumer-driven or more B2B offering. So it's challenging. It's really tough. And, and Funding is really a valuable source to allow you to alleviate some of that, you know, kind of struggle or anxiety that comes with, you know, starting a company. But I think that for us, you know, because we were building something that was on top of open source that had millions and millions of dollars put into it, We were able to just kind of leverage that and save a lot of money that most companies use for research and development when they're, you know, raising money. We weren't— we didn't have to do that as much because a lot of the stuff that we would have raised money for had already been built in the open source community. So we were able to take that and, and all of the different components of open source that we're using and blend those together into a real product. So we saved a lot of time and money doing that, and we wouldn't have been able to do that if it wasn't— if we didn't have open, you know, open source, um, wasn't, wasn't as mature as it was. And, and like true cloud, right? Joe, you asked to talk about platform. I think a lot of people also don't, don't understand what true cloud is. Um, so, um, yeah, I mean, I, I think that, you know, it's definitely— it's helped us to grow organically more and not get— and focus more on, you know, 2 things I think that are what I'm also seeing is that, you know, there's a land grab of— for users and accounts and data even. Um, but— and it's, and it's generated by, you know, another financial engine that is is, is causing that. Um, and, you know, we can talk about that if you want, but, um, it's, it's causing govtech companies to be less organic in their approach. So things that suffer from— that go by the wayside are product development and customer service, and the emphasis becomes sales, sales, sell, sell. Um, so it's just getting customers, selling them locking them into a 3. I'm seeing 5-year contracts, which is— I wouldn't advise that for anyone for anything. Um, but you know, it's just, it's for us, like, we, we growing organically, it's allowed us to, um, be better, more sustainable. Um, and it hasn't been easy, but be more sustainable and really focus on the core customers we have and how do we make the product better? How do we co-design it with them? And, you know, when you work in that kind of environment, that development environment, you create more of a community, a sense of community that there's more a sense of ownership of the product. And, you know, it's causing what we're seeing is, you know, a lot of referrals are happening. You know, customer referrals and just a sense of more, I would say like more joy around, you know, collaborating and doesn't feel like, oh, they're the vendor, right? Like we feel much more of a community with our customers and we're growing in an organic way and not feeling, you know, compelled to grow exponentially because You know, some financial analyst thinks that's what we should be doing to inflate our— the value of our company.

You know, that's one of the things I was going to ask you was, you know, outside of, you know, open source and platforms and bootstrapping, was there something else that we should be talking about or the market should be talking about that's not part of the conversation today? One thing that stands out to me, Luke, every time we talk, somehow the word joy works its way into the conversation. And I think that that's either unique to you or unique to the perspective that you and your peers at the Proud City maybe have.

Yeah, I mean, you know, so I have this joke, like when we first started Proud City, have you all seen Jerry Maguire, the movie Jerry Maguire? And there's that one scene like at the end where Jerry and Cuba Gooding, Tom Cruise and Cuba Gooding Jr., He catches the ball, scores a touchdown or whatever, and wins the game. And in the locker room at the end, there's all these cameras and Cuba Gooding, you know, it's like, where's Jerry? Where's Jerry? And, and Tom Cruise is over in the, in the corner and he's got, he's got his sunglasses on. And, and then they kind of like, he sees him and he points to each— they point to each other because they like went through this whole journey and then they hug each other. And it's like this big, you know, it's like emotional kind of. They hug and then they flip to another football player. I think it's like Eli or Peyton Manning with his agent, you know, some actor. And he says, how come, how come we don't hug? And the, uh, the agent like tries to hug him and he kind of pushes them away. And I think like for me early on, you know, we always kind of joke like we want to be like, you know, Jerry Maguire, right? We want to create that relationship. And when you— I mean, it's just like how you want to show up in life in general. We can have— that can be a whole nother In Case You Missed It episode. But I think it's just really, if you lose that sense of joy, then you lose the sense of purpose and why you're showing up to do the things from a civic perspective. And I think we're— you see a lot of that lost in our culture today. But if you arrive with joy, then you're able to look at it from, we're going to build a really great product. We're going to build a really great experience, both for our customers and the people that they serve. And, you know, it's just kind of a cultural thing that we think about, you know, when we're building Proud City and how we show up and not, you know, kind of being an aggressive sales, you know, sort of cheesy, sleazy mentality and more just kind of, you know, here's what we do, here's why we do it, here's how. And, you know, having a sense of joy around it.

Joy as a service, now powered by Proud City. So there you go. So what's next for you and for Proud City, you know, looking to the year ahead?

What's next What's next for you?

I mean, I think that, you know, we'll still, we're gonna still continue doing what we're doing. We're refining better how we're communicating our differentiation. I think that we're, you know, we'll start working more, which you're seeing, what we're seeing is the other vendors who are similar to us, kind of what we call merging tech, emerging tech is, Uh, you know, folks like Polymorphic, which do kind of workflow, customer relationship management, customer service management, and AgendaLink, which does meetings management, meetings publishing, right? These are emerging tech companies that are still independent. They do really amazing work in their respective, uh, focuses. And, you know, I think like really Working more with them on channel promotions, cross-promotions, integrations, and really just not being distracted from sort of the monolithic roll-ups. So I think that we're going to definitely start working with those folks more and supporting one another, being more proactive about it. You know, I think that that, that's something that is, that's going to be very important to us. But I think also just, you know, staying the course, not getting distracted by the market M&A stuff or, you know, things that are happening that, um, cause us to be distracted. So I think from a product perspective, we're looking into, you know, soon enough we're going to have an enhanced analytics dashboard, so you'll be able to log in and see all of your kind of web metrics within Proud City dashboard, and that'll integrate with, you know, Google Analytics, and it'll be really powerful. And that's— so that's really exciting. That'll happen in the next 4 weeks, I think. And then beyond that, we're actually looking to enhance some of our security and multi-factor authentication work and beefing that up in a big way. And then hopefully that'll be done You know, by summer, over summertime. So those are 2 big things, or 3 big things that we're, we're kind of looking at and focusing on.

That's great. Speaking of big things, any predictions for the year ahead in GovTech?

I mean, I think that, you know, I think there's gonna be a, you know, there's no— nothing happens fast in this industry, y'all know that. But I think that we're gonna start to see more and more people and government asking questions that are more sophisticated than normal when it comes to purchasing, you know, things like who owns the data, do we own the data, do you own, do you think you own the data? We're going to, I think that that's a big one that's gonna happen, and I think that we're seeing this now, a lot more people are gonna be sophisticated on you know, the, the business of GovTech, you know, we're hearing, are you going to get bought by someone? Um, and, you know, let's say by X or by Y. Um, and so, you know, you have to kind of explain that. Um, and I think that, uh, you know, we're also seeing, or I've heard from other, uh, colleagues in other companies that folks are saying, well, if you do get bought, we want like an if clause. Like, if you get bought, then you still have to do these things for this amount of time. So I think, like, the trends are going to be— I think that local governments are going to get more sophisticated and more demanding on the product and just understanding the business of government more. And I'm all— I'm here for it.

So we're going to sneak in a question here from the audience, but if you have any advice for GovTech founders today, What would it be?

I mean, I think everybody's different, right? Every situation is different. I mean, for us, it's easy to say that we can bootstrap because we leverage technology that was open source technology. It was very mature. I think that, you know, there's two— there's kind of two parts to that question. One is the business part and one is kind of the personal part. And I think that The business part, you know, you really want to find people that are good people and that you trust, whether it's your co-founders or your advisors or your investors who are really into it for the right reasons. And understanding that having those crucial conversations up front that This isn't going to be the same thing as what you read on TechCrunch or Recode or whatever else is out there. It's going to be a different journey and having that conversation upfront and understanding that. And I would say, you know, part connecting with folks that are GUF tech founders, you know, it's often helpful to connect with folks and sort of commiserate and celebrate together because then you realize you're not alone, right? There are common similarities between that all kind of early-stage govtech founders experience. So just kind of creating that support group. And then, you know, I say on the personal side, it's just, you know, really just taking time to detach from it and, you know, really focus on the things that are important to you personally. Because that's going to help you deal with the day-to-day stuff, the business side of it much better. And everybody has their ways of doing that— meditation, exercising, you know, whatever it is. But I would say it's important, whether you're a GovTech founder or any founder, it's very important to invest in that as well, as much as, you know, the business components of your day-to-day life.

Great advice, Luke. Where can our audience go to learn more about Proud City and follow your perspectives?

Yeah, I mean, you can visit proudcity.com. I write occasionally on govfresh.com, and I'm not as active on social media as I used to be, but you can go to @LukeFretwell at the various social media things, and occasionally I'll, I'll post something there.

All right, Luke, well, thanks for joining Dustin and I this week, and until we see you again, have a wonderful weekend.

Yeah, thank, thank you both. Have a great weekend.

Good to see you.