A GovTech Startup Story & Case Study

(Original post can be found on Medium.com, published November 17, 2020.)

Starting a CivicTech startup, launching a product, landing a major client, and investing more money and time than expected was the second-best decision I ever made. The first was having my children.

One day, I arrived home from work, turned to my husband, and said, exasperated, “I’m going to create a product to solve the parent-school communication problem we’ve seen in the preschools and schools our kids have attended.” It was 2016, I had over 15 years of experience in creating digital products, and I was tired of working on other people’s ideas, serving missions I didn’t believe in, and following nonsensical orders. Honestly, I was angry. I wanted to work on my own ideas.

Within a year, I pivoted my idea from EdTech to CivicTech, acquired my first customer, and launched Lupn. My startup journey had begun, and I was eager to share the big vision with the world.

The Problem: Low Civic Engagement

We all know that government agencies are decades behind in terms of technology. They spend billions on civic engagement with low returns, yet budgets are shrinking. On the other hand, residents are often unaware of local public services, events, and programs and are clueless about handling civic issues.

Besides the lack of modern technology in government, we are living in an era of information overload. More content has been created in the past decade than in all of human history. No wonder we’re unaware of what’s happening in our own neighborhoods.

The Solution: City-Resident Communication Platform

For me, aggregating and curating content from various sources felt natural. After all, I had spent the past decade solving information architecture problems.

My vision was to create a one-stop solution for local, county, and state governments, local nonprofits, and local businesses to connect, collaborate, and engage. For 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, easily discover events in town, and seamlessly engage with their local community.

The system was straightforward. We pulled content from various sources, including government departments, local nonprofits, and affiliate partners (local business content was also part of the roadmap). We curated that content, personalized it with filters, and built a recommendation system (not fully implemented), allowing residents to access what mattered most in real-time and connect with their neighbors.

The Market and Business Model

The market and business model are critical aspects of a startup. With a Total Addressable Market (TAM) of 22,519 cities and counties in the U.S. spending $53 billion on IT solutions annually, we targeted 2,600 mid-size cities and counties for our Serviceable Achievable Market (SAM) and 500 cities for our Share of Market (SOM). The business model began with a basic annual subscription fee for governments. The plan was to later include premium features like calendar integration, multichannel content publishing, and emergency alerts; we would also offer advanced features for local nonprofits and businesses. We experimented with advertising in the mobile app using GoogleAds but realized that significant engagement per city was needed to see any return.

According to CBInsights, ‘No market need’ accounts for 42% of startup failures. Although we did our research, it wasn’t enough; the technology and business model didn’t solve 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 Glendale, CA, to download on April 5th, 2018. With a 50% registration rate, 1,000 weekly active users, and over 100 new events per week, user acquisition and engagement were growing well but 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 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 faced challenges on the B2C side (Business to Consumer) with the mobile app, the B2B (Business to Business) side proved even harder. Early on, I was warned about the lengthy sales and procurement processes in government, and I experienced it firsthand. With no budget left for sales and marketing, I struggled to acquire new customers and launch in other cities. The few cities I pitched to requested a more robust platform. I found myself in a Catch-22 situation—no budget to improve the platform meant no new customers.

I covered the post-mortem analysis and key lessons learned in my blog post “3 Lessons Learned from My Startup Failure.” I decided to close Lupn in December 2019. The City of Glendale was surprised by the decision. My family, friends, and team were also surprised, but they saw it coming as they saw how exhausted I was and the financial strain on my family.

Conclusion

These days, in addition to my consulting work, I enjoy sharing my story and presenting talks on “What Your Startup Can Learn from My Failure” with business and entrepreneurial communities. We all fail or will fail at some point. After spending three years building Lupn and failing, I faced two options: keep what I learned to myself and apply it to my next venture or share it with other aspiring founders to help them save money and time with MVP iterations and achieve product-market fit faster.

And as I always say at the end of my presentations…

“Don’t be afraid to fail; after all, it’s the best way to learn.”

If you have any questions or want to discuss reaching product-market fit, building exceptional product teams, and creating outstanding products, I’d love to hear from you. Feel free to get in touch!