Polco - Driving Local Change

Great, so I'm Alex here with Nick, and we're the co-founders of Polco, a civic communication company that's changing how representatives and their constituents communicate. So this is town hall meetings in America, and everyone from local governments to state and federal representatives are relying on these events, and they're actually often the primary means of communication and feedback, and unfortunately they're terrible forums for that. Officials will know how these two angry people feel, but they don't know if it's representative of everyone else. And to supplement their understanding, most are actually relying on outdated technologies like phone calls and even postcard mailers. Every once in a while, we see some that are using email or social media or expensive polls, but those rarely work. And the result is that decision makers don't get good information or feedback. The squeaky wheels get their way and the quality of decision suffers. The good news is that we're changing that. So at Polka, we license the platform to local governments and other customers for them to get reliable, insightful data on what their constituents think. The way it works is customers post questions and start discussions on our platform. They share those through all their communication channels as well as Polco's existing user base, and then they receive reliable data in return on those responses. So the key is that we verify the identity of all of our users with publicly available data. We anonymize the results and the comments and then display everything back in insightful dashboards that can be broken down by things like age, gender, district, ward, whatever it is the decision maker needs to make an informed decision. Things have been going well so far. So we're currently in about 30 municipalities, have significantly increased both customers and revenue since the spring. And we're in the middle of a $2 million fundraising round to scale our municipal sales and begin to push into other complementary customer segments. We monetize the product by licensing it on an annual basis to our customers. And those price points can range from $1,000 up to about $25,000 a year, and that just depends on target audience size and the features that they need. Of note, the price points were determined for municipalities so that they could stay below RFP thresholds and make contracting quick. All of this is driving towards a pretty large market. It's over $70 billion in total, and we've deliberately chosen to begin with the municipal segment for reliable revenue, user acquisition, and general brand awareness. And with 90,000 local governments It's a pretty sizable market in its own right, but the beauty of the product is how widely applicable it is. So many of the complementary segments are actually higher value and higher margin, and we've already had traction in several of those categories. So I want to quick touch, touch quickly on how that application and complementary segments actually answers a question that we often get, which is how do you scale this? How do you scale in the, in the public sector, in the government space? So we've established strong product market fit and continue to grow our municipal customers at a good pace, and now we're adding in some accelerants. And so specifically, one of those is growing our user base. So currently, our sales and onboarding flow involves helping our customers get their own users for us, and believe it or not, they're actually glad to do that. We recognize the power of kind of growing the user base ahead of new leads. So the most attractive opportunity to do that is actually state and federal representatives. They deliver reach, users, and recognition, and they also deliver some serious revenue. So at the federal level, legislators actually have built-in budgets of $500,000 per legislator they can use that we use to engage constituents called the franking budgets. And then there's campaigns and media organizations as well. So again, we've kind of intentionally put a foothold in this stable, predictable municipal market, and we'll continue to focus on that. But the key to growth and scale is right here with what you see in these complementary markets as well. So real quick about us, Nick and I met while we were teaching at the Air Force Academy. He was teaching econ and I was teaching political science, and we both kind of had a love for tech. We actually had a brief hiatus from each other. He was at Amazon, I was at Google, But we came back together when we realized we had both the technology and a fantastic market opportunity with Polkadot. And I will stop there. Happy to answer any questions. All right. Thank you so much. That was great. First, Christine, let's go to you.

Okay. So a couple of questions. One is what's happening with the user relationship and You know, folks are responsible, they are verifying that they are in someone's district. Do you own those relationships? If they move to a different district, do you continue to own that relationship? Can you share that relationship for, you know, among different politicians that might be relevant for that particular voter? And then, want to understand to what extent you've got, you know, sort of cycles that are related to campaign cycles. So, are you going to have a year of pretty revenue and then a year of terrible revenue just because it was a campaign year versus not a campaign year and so forth? But that does happen often. So if you can speak to that, that'd be great. Sure.

Christine, we got the second part about the cyclical nature of campaigns. Can you talk a little bit about— just elaborate on the first point? It was cutting out a little bit. [SPEAKING SPANISH] It sounds like we may be getting some feedback. Sorry, Christine. Go ahead. Yeah, it's better.

Okay. Yeah, and I've got a time lag on when I'm hearing you guys, so there's probably like a 5-second, 10-second delay as well. So the first question was about the relationship with the folks that are being polled. So if I come in and I respond to a poll, do you own the relationship with me? Is there a particular, you know, municipality that owns the relationship? Is it a particular candidate or officer? Relationship, you know, can they transcend, go across, use different folks that might care about what I have to say? You know, how does that work separately from the sort of super bowl issues?

Yep, got it.

Awesome. Yeah, so every, um, everyone who responds to content that's posted on Polco becomes a Polco user, and once they're there, they're given a feed of content just like you'd see on Twitter or Facebook. It's a Instead of kittens and food, it's questions being asked to them by their local government. And so in the sense that we have a relationship, it's kind of an ongoing, you know, notification-based relationship. We tell them when new content's posted for them and continue to engage them that way. I'll let Nick take the second question about the campaign cyclicality.

Yeah, thanks for the question, Christine. On the campaigns, our underlying core generator of revenue is absolutely licensing to the municipalities. 90,000 local governments across the country. But in the campaign years, there's a lot of people running and there's some real revenue decisions can be made pretty nimble. So we like to layer that just on top, but always maintain that core. So that's the way we think about it. Yeah, that piece is cyclical, but it's also large and fast, top layer. Okay, great.

Thank you. Larsen, question for you. Sure, I wanted to learn a little bit more about how long you guys have been around and how long it took you guys to get those 30 municipalities on board is my first question.

Yeah, absolutely. Company was founded May 2015, so the first thing, we had 3 municipalities out of the gate. When you launch with a city, you don't want to fall on your face, so we want to make sure the platform was pretty mature. So we actually worked with the first 3, I think, up to, you know, we had a few come knocking on the door, so up to the first 10 It was really like testing features. Then we felt comfortable right around January 2017. And so over this year, then we've started to put the pedal to the metal, refine our sales process, refine our sales assets, and just so recently aggressively start the outreach. So most of those have been 2017. Awesome.

That's great. Congrats on that, guys. Curious what sort of the engagement has been on the platform. What have you guys learned and where are things sort of trending from a user interaction perspective?

Yeah, we've learned a lot. Uh, the different use cases are astounding. Some of them just want to ask questions about sentiment. How do you feel about road safety in your city and use those breakdowns by district? Some want to do hot topics. How do you feel about the wheel tax increase? And so the use cases have been, I think they're complementary. What we're starting to see is people who get one start using the other and folks who use the other start using the first. So they like to start to engage kind of full spectrum policy lifecycle. So we've learned a lot from them by doing that, but overall, it's been pretty good.

I think on the user side too, one of our— we have kind of two internal targets for our customers. One is that they get more people on Polco than they have on Facebook, and that's amazingly easy to do. And the second is we typically shoot for 1%, 3%, and then 5% of the voting population in the first year, sequenced off depending on what their communication channels. And we've been able to do that with about half of our customers so far. And not all of them have hit that year. So, pretty good. The standard's unfortunately extremely low, so it's very easy to make our customers happy. It's much harder to make ourselves happy. But in that sense, I think the engagement numbers look pretty solid.

That's awesome. Last question is, can you shed some light on the key metrics that you guys track internally for success? You mentioned a little bit of it right there, but just curious how you guys are, you know, What is good for you guys?

Yeah, we probably have different metrics that we track in the different pieces, but to me, what I'm most focused on, every time we get a look from a city, almost every city is using SurveyMonkey right now. It's just not citable. They can't use it. It takes them a bunch of time. Every time we get a good look from a city, there's extremely strong interest. So what I'm most focused on is decreasing the number of touches per city. It's sales process engineering. You know, we're tech guys, we're tech engineers of background. We're just starting to really love now the sales process engineering. So as fast as we can, as few touches, and we're making real progress there. So we're excited about that.

All right. Thanks, guys. Thank you very much. You guys did great. And thank you to our panelists.