Today, ElectNext announced that they had raised $1.3mm to launch a data, analytics and marketing service to bridge the data gap between politicians, lobby groups, and their constituents. The company provides contextual political data to media properties (Crunchbase for politics) and in turn uses that reach to provide actionable insights for campaign managers. Brooklyn Bridge Ventures led the round.
Describing it that way, however, makes the story a bit neater than advertised. This business model isn't how Electnext started, nor was investor interest always this strong. I think there are five key lessons here that put the company in the position to succeed that they're in now:
1) Find a lead.
It's very fashionable these days of crowdfunding and party rounds to go out, tell a good story to individuals, and piece together a lot of cash from a lot of folks--with no investor in particular really taking any responsibility for advising the company. I had been meeting with Keya and her team months and months before I actually invested--because I liked the space and was impressed by her personally. Yet, the product needed direction and Keya had a lot of questions about how to prioritize her time as a non-technical founder. We've been on a schedule of meeting up every two weeks and have worked together to hone the strategy. It's been a terrific partnership and I've been super impressed with her ability to learn fast. She knows campaigns like the back of her hand, but she's a first time CEO of an internet startup. What's most important here isn't that I was around to help--but that Keya has an innate ability to ask relevant questions at the right time. I think it mattered less who the lead was, and more that, unlike a lot of other entrepreneurs, Keya reached out and leveraged the resources she had around her wisely. Her success thus far is a function of her ability to know when and what to ask--and to surround herself with people who can provide her answers.
2) Fail fast.
Many startups in the political space have tried the direct to consumer offering--like Votizen and Popvox. It's a tough slog, and, at the end of the day, it's tough to gather the audiences and then figure out a business model to support the effort. ElectNext started out along that path, but quickly realized that it would be more efficient to leverage the existing audiences already at major media properties. They left themselves plenty of cash in the bank to pivot and give themselves enough runway to execute the new model when the writing was on the wall for the consumer offering.
3) Use existing models of success.
In the poltical data space, information is all over the place, and often inaccessible, even though voters want to be informed and political figures and groups want to get their data out. Media properties gather big audiences, but none of them are quite resourced to solve the data problem. This problem isn't new. Singleplatform built a $100mm business gathering up menu data for restaurants and augmenting the offering that media properties had--creating a service to merchants in the process. They power, for example, the menus you see in Foursquare--something Foursquare would have been unlikely to gather themselves.
When ElectNext looked at their strengths, they had great media relationships, disaggregated data, and two sides that wanted better transparency--as well as the interest in making transparency actionable. Same situation. The SinglePlatform team was very generous with their time in helping ElectNext work through it's model and solidify a base for an attractive offering to all sides. The business isn't exactly the same, and ElectNext's knowledge of their space helped them craft a custom offering for their stakeholders, but they started out in a great position because they had seen a similar model work elsewhere.
Too often, startup try and reinvent the wheels around business models, inventing completely new things that have no proxies for success in other areas. That limits who you can learn from and seems incredibly risky, versus porting over something that worked in another sector and making it fit for what you're doing.
4) Keep up with the investors you meet, even when they turn you down..
Sometimes, you can tell when an investor genuinely has interest in you as a team, but just can't get their on the model. This happened to ElectNext. Everyone seemed to be very impressed with their team, but a lot of people didn't love the consumer offering. When the company pivoted, they solidified their offering, got some key proof points, and had continued warm enough connections to investors they had met previously to reapproach people. Almost overnight, investors jumped on board with the new model. The key here is that the change in the company was real. It wasn't just a slight tweak. It was a definitively different approach--one they committed to before necessarily waiting to hear what investors thought.
5) Go find the customer money.
The driving force behind ElectNext's consumer to B2B pivot was the thought of "What will customers pay for?" The aim was to create a real business and so they sought out ways they could provide real value to paying customers. They stayed in constant contact with key customers and built up a network of "friendlies" that could give them back channel feedback on what would appeal and what wouldn't. This helped them hone their offering.
If you've got interesting political datasets, work for a media organization that covers politics, or you're running communications and/or social media for a government official, candidate or lobby group you should reach out to Keya at keya@electnext.com to find out how you can work together.