Indigov: A New "CRM" for Government

Looking into the constituent relationship manager (CRM) for public officials to better do their job and address the people that put them into office.

Today I’ll start off by asking you: how big is the US government (in terms of elected public officials)? Your initial reaction (if you’ve taken some civics or government class) might be around several hundred if you count the president, vice president, 435 in the House, 100 in the Senate, etc. But let’s not forget our state and local governments, like the 19.4K municipal governments, 16.5K township governments, 3K county governments, 50 state governments, oh and the 35K special purpose governments that cover utility, fire, police, etc. That comes to something around 87K governments. (And if you’re a US citizen over the age of 18, living in a US state, and don’t know your state’s senators - take a few minutes to look them up and please vote). 

So, that’s big. And it’s weird to think of our government as a market or industry, but that’s the thought exercise for today as we take a look into Indigov,  a constituent experience management platform, who self-categorizes themselves as “an operating system for representative democracy.” By Indigov’s calculations, we’ve got 570K elected officials in the US who collectively receive over 53B constituent messages per year. That’s almost 100,000 constituent messages per official per year. And a brief refresher from your civics or gov class: constituents are a citizen whom a legislator has been elected to represent, and therefore a legislator’s job is to serve their constituents by representing their interests in the legislature—hence, the US “representative” democracy (we don’t vote directly on everything, we vote for representatives who vote on our behalf). 

Now picture a US politician—old white dude? Sounds about right. Now imagine that old white dude in the 21st century, with a huge inbound of mail, e-mail, calls, tweets, DMs, webform submissions, etc. on a daily basis. That’s why when you file your complaint about the massive pothole on your street (an annoyingly common problem in Pittsburgh), it takes a couple months before you even get a generic apology response (and then probably a couple more weeks until the pothole actually gets filled). Because the old white dude your area voted into office has both a physical mountain of mail and an even taller digital mountain of messages/requests/complaints from his constituents. And this problem really stems from the tech [innovation] deficit in government operation agencies. So you have this problem of an unbounded increase of constituent communication (with email, social media, etc.), a mostly static support staff size, and nearly all of the government IT budget allocated toward maintaining and operating (antiquated) legacy systems that can’t keep up. 

Alex Kouts seems to have been working toward a solution for this problem. A Marketing & Supply Chain Management dual degree from University of Maryland (and an MBA from there too), Kouts has done his fair share of product and marketing roles for various tech companies. Most notably, he worked for a govtech company called Brigade and then worked as an advisor to congressmen as to how to increase the efficiency and effectiveness of government, which ultimately led him to found Indigov in 2018, as he bridges the gap between Silicon Valley and Washington DC.

Indigov is a new, specialized type of CRM (constituent relationship manager - not customer), serving all levels of public officials from members of the US Congress to mayors, and everyone in between. Their approach is three-pronged: 1) Indigov Platform serves as an enormous inbox that intakes everything like emails, webforms, scanned mail, social and phone calls and puts it all on one interface. Then it also helps the user triage all these messages with auto-email response to mass email as well as smart tagging for various constituents based on topics people care about. 2) Indigov Outreach helps elected officials proactively manage their list of constituents so he/she can communicate with them on topics they care about. Indigov Outreach also provides polished, trusted .gov templates that are easily customizable with drag-and-drop elements, and provides engagement insights post-send. 3) Indigov Websites is a website-builder specialized for public officials and are designed to be more responsive and interactive with voters. For instance, one design implementation immediately pushes a menu to website visitors, asking if they’d like to sign up for a newsletter, request a meeting, or help their community, etc. (I tried looking for examples of websites built through Indigov’s tools, but unfortunately their customer list is kept confidential, even the ones they quote on their website 🙁). Together, this three-pronged solution allows elected officials to assure their constituents (i.e., those who voted them into office) that their voices are heard. 

Digging a little more into Indigov’s technology, turns out their product is built on Zendesk, an OG CRM (customer relationship manager). One thing I wanted to point out (considering it’s been a hot topic in tech) is [cyber]security, which as you can imagine, is a top priority for politicians. Turns out Indigov’s “best-in-class security” that’s “trusted by over 120,000 companies, federal and state government agencies,” is actually just the Zendesk platform and its existing security tools. While some might not think this is impressive, I think this is actually a really smart move by Kouts: by not building everything from scratch (i.e., a blank codebase) and using what already works [well], Kouts can focus on specializing these existing tools to build a new product for a whole different market. In fact, Zendesk wrote a brief case study on Indigov as a customer, providing some cool stats on Indigov’s effectiveness that I’ll list here:

- 99% faster response times

- 70% reduction in manual intervention

- 66 hours of weekly staffer time saved

- Reduced required 58 clicks to 3 clicks to respond to a piece of constituent mail

- Reduced response time from an average of 80 days (Indigov’s website says the average was 45 days) to just 8 hours

And based on the “190M Americans supported” with Indigov, TechCrunch estimates that Indigov has hundreds of customers. In terms of funding, Indigov raised $25M in their Series B round in May 2022 from Tusk Venture Partners, Wicklow Capital, Valor Equity Partners, and 8VC, bringing their total funding to over $38M. So it’s clear that Indigov has proven its fit in the market, provided value-add to their customers, and decent funding. But Indigov still has room for improvement in terms of their technology. Something that caught my eye in the same TechCrunch article was Kouts’ boast as to how the Indigov workflow management system that filters through all inbound messages through various channels “applies exact text-string matching in scouring their content.” Kouts explains how this method has a “basically zero” error rate whereas with NLP or ML, error rates can range from 2-5%, enough to be a big problem if a constituent receives a response that isn’t appropriate, turns it into a social media post, and it becomes a scandal. 

After just recently taking my ML final, I agree with Kouts that his product is one that doesn’t allow for much, if any, room for error. And there’s another issue of making a mistake that reveals the automated nature of the response, which can also upset constituents—no one wants to talk to a chatbot (especially one that doesn’t help). But it’s 2023. Text-string matching is one of the first things students learn in their intro to CS class, and everyone with a computer has witnessed the power of ChatGPT. AI startups are popping up left and right, VCs are raising funds or committing capital just for AI. Error rates for Kouts, if he keeps up, can fall below 2%. Indigov can and should leverage this new wave of tech development in AI, ML, NLP, etc. to become better, to become smarter.

So, let’s talk market. I started this story with how big the US government really is in terms of market. And Kouts adds on, mentioning that through recent initiatives like FedRAMP (Federal Risk and Authorization Management Program) in 2011 which is a government-wide program promoting the adoption of secure cloud services, there’s this window of opportunities for new companies like Indigov that can get in on the ground level and define what govtech really is and can be. And let’s not forget… the US isn’t the only representative democracy on this planet. I can totally see why VCs would be all over this type of technology if it’s creating a new market. But is it really creating a new market? Companies like CivicPlus, PUBLIQ Software, and GovPilot have already been building new technology for local governments, prioritizing communication with residents. And perhaps the longer you’re in the market and the bigger network you build, you have the bigger advantage (I can imagine the network effect being important —especially if it gets to the point where you develop technology that becomes standard or mandated in government). 

Plus, the battle between David and Goliath remains a threat. Indigov builds off of Zendesk—what’s stopping Zendesk from developing their own constituent management platform based on their existing CRM? Or Salesforce or any other top CRM like Microsoft, Oracle, or SAP? Will they be a bit slower in developing this technology? Maybe, if they’re not prioritizing the market. But threat of new entrants (that already have strong brand names) is real. However, Kouts claims that Indigov is a better fit for public officials specifically due to their expertise with government officials and voters. [OG] CRM’s are designed for company-customer relationships, but not for government-constituent relationships, which are fundamentally different. Kouts argues that Indigov’s customers need a lot of hyper-specific features that normal CRMs can’t understand without expertise in the area (which, of course, Kouts has). But I wouldn’t be surprised if in 10 years, only a few players take hold of this industry—so investing in Indigov (in the long-term) is betting that Indigov will be a winner—and figuring out their chances of winning takes a lot more than a blog post—I’ll leave that up to you to decide.

So to wrap up today’s discussion, Indigov has a lot going for it: they’re going after a big market that’s not [yet] concentrated, and they’ve definitely established product-market fit and have produced real ROI for existing customers. But there’s a lot of room for improvement (which is also a good thing) and the threat of new entrants is imminent. I’ve never looked into govtech before, so this was a fun exercise for me—hope it was fun for you too!

Civically,

Vivian

Disclaimer: any companies explored in Underground Tech are not in any way related to sourcing efforts by SGE or FTV Capital and are strictly based on personal interests.