First contact with voters this cycle has rattled the left’s political startup ecosystem and sparked soul searching among venture capitalists and entrepreneurs alike.
Failure for startup founders looks different in Silicon Valley, where crashing and burning can be celebrated for the lessons or “pivots” it brings.
Reaction is proving sharper in the campaign industry, where that exposure can have more far-reaching repercussions despite the smaller pool of users.
“We can’t afford to use the same playbook,” said Michael Luciani, CEO of The Tuesday Company, whose offerings include a relational organizing app. “There’s a higher burden of responsibility.”
That responsibility stretches beyond early investors and users.
At the start of January, Shadow Inc. was contracted for vote tallying by Democratic state parties in Iowa and Nevada — despite the company only “officially” launching in July 2019.
That appeal of being on the bleeding edge of technology has allowed startups to expand into every facet of campaign operations this cycle.
In fact, that’s what progressive startup incubator Higher Ground Labs said at the end of 2019. “Today, our portfolio is providing key infrastructure for over 6,000 progressive campaigns, causes, and labor groups,” HGL said in an email last December. “Every 2020 Democratic Presidential campaign is using at least three of our tools."
The focus on startups on the left is, in many ways, a result of Donald Trump’s win in 2016.
Hope and money poured into many of these companies shortly after the Republican’s victory over Hillary Clinton. Some like The Tuesday Company, which along with Shadow’s predecessor company are graduates of HGL’s incubator, had success in 2018 when Democrats retook the House. Their momentum rolled over into 2020 when many of these companies sought to bring technology into tried-and-true analog campaign processes.
But this explosion of available technology has pitfalls. For starters, not every company has the customer service necessary to deal with a wide-spread problem because a dearth of money or time has limited its ability to scale up sufficiently.
On the other side, many clients lack the institutional know-how to anticipate what they’d need from a vendor until they’re in a pinch.
“We need to think about [training and implementation] for the good of the ecosystem,” said Luciani, who co-founded the company after working for the Clinton campaign in 2016.
“I think that there’s the fear that people are going to look at that [Iowa] incident, and be like, ‘Oh man, technology should not be something we can use.’”
HGL’s co-founders, Shomik Dutta and Betsy Hoover made a similar argument in a recent piece for C&E.
They wrote that the “disastrous experiences with flawed technology shouldn’t trigger a wholesale abandonment of novel digital tools. It necessitates careful dissection to avoid future mistakes while continuously investing in the technology that Democrats will need to ensure historic turnout in November.”
Now, it hasn’t been all bad for startups looking to make a name in 2020. Much less talked about from Iowa was the success of startup Change Research, a Democratic online pollster and HGL alum that got a boost from the fact that the Des Moines Register, CNN and Selzer & Co. didn’t publish its final pre-caucus poll over concerns about methodology.
“We are delighted with the bounce that we’re getting post-Iowa in terms of getting a fresh look from the constituencies that matter most to us in 2020 — Democratic committees and Democratic candidates,” said Reilly, whose company initially pitched down-ballot, low-dollar campaigns with its services.
“We’re competing for that business for the first time at the committee level, and then continuing to [service] those candidates who are throwing their hats in the ring,” she said.
As startups on the left continue to press their cases for 2020 budgets, they should do so without the burden of being judged by a single negative outcome. “There are countless examples of high-profile established consultants who have never been held accountable for colossal failures,” Reilly added.
Ultimately, the money behind progressive tech startups isn’t shying away after an early cycle hiccup. New Media Ventures, which like HGL funds companies and organizations operating in campaigns, advocacy, and civic engagement, opened up its latest open funding call the same night the Iowa caucus results were derailed by the Shadow app.