A CivicTech Startup Story & Case Study
Founding a CivicTech startup, launching a product, getting a major client, and spending more money and time on it than I had ever expected was the second-best thing I did in life. The first was having my children.
One day I got home from work, turned to my husband and said, in an exasperated voice, “I’m going to create a product to solve the parent-school communication problem we have seen in the preschools and schools our kids have been to.” It was 2016, I had 15+ years of experience creating digital products and I was tired of working on other people’s ideas; serving missions I didn’t believe in, and following nonsense orders. To be honest, I was angry. I wanted to work on my own ideas.
Within a year, I pivoted my idea from the EdTech into CivicTech, acquired my first customer and launched Lupn. My startup journey started and I was eager to share the big vision with the world.
The Problem: Low Civic Engagement
We all know that government agencies are a few decades behind when it comes to technology. They spend billions of dollars on civic engagement with low return, yet budgets are shrinking. On the other hand, we residents are unaware of the local-public services, events, and programs, and many times are clueless how to deal with civic issues.
Besides the lack of modern technology in the government, we are living in an era of information overload. Humans have created more content in the past 10 years than in the entirety of human history. No wonder we’re unaware of what is going on in our own backyard.
The Solution: City-Resident Communication Platform
To me, aggregating and curating content from a wide range of sources felt very natural. After all, I had dedicated the past decade of my career solving information architecture problems.
My vision was to create a one-stop solution for government (local, county and state), local nonprofits and local merchants to connect, collaborate and engage. For cities, more specifically mid-size local governments, the goal was to increase citizen engagement and satisfaction, and effectively promote and provide greater access to services, programs and events. For residents, the goal was to have on-the-go access to city services, the ability to easily discover events in town and seamlessly engage with their local community.
The way it worked was simply. We pulled content from diverse sources, including government departments, local non-profits, and affiliate partners (local merchant content was also part of the roadmap). We curated that content, in other words, we personalized it by adding filters and building a recommendation system (the last not fully implemented), allowing residents to access what matters most; in real-time and connected with their neighbors.
The Market and Business Model
The market and business model are one of the most fundamental aspects of a startup. With a TAM (Total Addressable Market) of 22,519 cities and counties in the U.S. spending $53B in IT solutions per year, we were aiming at 2,600 mid-size cities and counties for our SAM (Serviceable Achievable Market), and 500 cities for SOM (Share of Market). The business model started with a basic annual subscription fee for the government. The plan was to later include premium features like calendar integration, multichannel content publishing, emergency alerts, and more; we would also include advanced features for local nonprofits and local merchants. We explored advertising in the mobile app by experimenting with GoogleAds, but realized there would need to be a massive engagement per city for it to bring any return.
According to CBInsights, ‘No market need’ represents 42% of the reason why startups fail. While we did our homework research, it wasn’t enough; the technology and business model created wasn’t solving a deep enough pain point for the market to see its value.
The Results: MVP, Sales and Lessons Learned
The Lupn mobile app was approved by the App Store and made available for the 220,000 residents of the City of Glendale, CA to download on April 5th, 2018. With a 50% registration rate, 1,000 WAU (weekly active users) and over 100 new events per week, after a few API integrations, user acquisition and engagement was growing well, but yet not fast enough.
“I’ve been looking for an app like this ever since we moved to the area. There are so many activities in Los Angeles, and I often found it overwhelming when I started to look at various websites. Lupn is a streamlined, location-specific app that allows me to find exactly what I’m looking for, quickly and easily.” — Emily Greene, Glendale resident
While I was facing challenges on the B2C side (Business to Consumer) with the mobile app, the B2B (Business to Business) side was proving to be even harder. Early on, I was alerted about the long sale and procurement processes in government, and unfortunately I was experiencing it first-hand. Without any budget left for sales and marketing, I was struggling to acquire new customers and launch in other cities. The few cities I managed to pitch were asking for a more robust platform. I found myself in a Catch-22 situation. I had no budget to improve the platform, thus, no new customers.
The post-mortem analysis with key lessons learned was covered in my blog post “3 Lessons Learned From My Startup Failure?” I decided to close Lupn in December of 2019. The City of Glendale was surprised with the decision. My family, friends and my team were also surprised, but they also saw it coming as they saw how exhausted I was, not to mention the financial burden I was putting my family through.
These days, in addition to my consulting activities, I enjoy sharing my story and presenting talks on “What Your Startup Can Learn from My Failure” with business and entrepreneurial communities. We have all failed or will fail at one point or another. After spending 3 years building Lupn and failing, I was faced with two options: to keep what I learned to myself and apply it to my next venture, or to share it with other aspiring founders in an effort to help them save money and time with MVP iterations, and to consequently, achieve product-market fit faster and scale.
And as I always say at the end of my presentations…
“Don’t be afraid to fail, after all, that is the best way to learn.”
Adriana T. Torresan is a Product Management leader and consultant. Subscribe to her newsletter at www.adrianatt.com to get updates on her upcoming posts and talks. Or follow her on Instagram at @adriana.t.torresan.