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Introducing PublicStuff

November 15, 2011

Brad Svrluga

We are thrilled this week to introduce our newest portfolio company, PublicStuff. We partnered with our friends at Lerer Ventures and First Round Capital on this $1.5MM seed round, which closed a couple of weeks ago.

PublicStuff was founded by Lily Liu, a talented first time entrepreneur with Carnegie Mellon and Harvard Kennedy School degrees and several years working in municipal government in California and, most recently, in the Bloomberg administration. Lily, through PublicStuff, is taking a practical and elegant approach to helping governments better connect, communicate, and interact with their citizens – “crowdsourcing customer service,” as Lily calls it. And it’s selling like crazy.

PublicStuff helps governments extend customer service through web, phone, and mobile platforms that let citizens of PublicStuff communities report incidents (potholes, downed power lines, litter, etc.), check service status, and monitor resolution.

Using the PublicStuff administrative platform, municipalities can better track and manage resolution of service tickets, and eliminate the inefficient, usually paper-based systems that dominate these environments today in all but our largest cities. For both sides, it’s a simple, elegant, lightweight solution that is improving municipal service delivery in 50 communities across the country. Have a look at Plano, TX’s website to see PublicStuff in action.

Remember the movie Startup.com? It’s one of my favorite memories from Internet Bubble v1.0, when I got my start in the venture business. If you’re an entrepreneur who hasn’t seen it, watch it tonight. It’s a terrific historical perspective on the madness of the Bubble and the tragedy of its bursting, told through the experience of two entrepreneurs and their startup, GovWorks.com. The lessons about the challenges – interpersonal and otherwise – of building something from scratch are timeless.  The trailer is here:

Startup.com chronicles friends-turned-entrepreneurs Kaleil Tuzman and Tom Herman as they work to build GovWorks.com, a collection of websites that aimed to completely change every element of the way that governments and citizens interact. It was a totally logical, yet wildly ambitious goal. They raised $60 million of venture capital, grew from 8 to 250 employees in 2 years, and then imploded.

GovWorks was a business that, if more intelligently managed, deserved to succeed. So with PublicStuff, it’s been fun to think about successfully reinvigorating the failed GovWorks vision.  Fortunately for us, as investors, Lily is taking a far more rational and measured approach to capital raising and company building. I firmly believe that she will ultimately dominate the government services marketplace, but I think she’ll be a whole heck of a lot more thoughtful about how she gets there.

Consistent with Lily’s measured approach to building her business, we took a relatively measured approach to our decision to invest. It’s not that easy to take your time in developing a deep understanding of investment opportunities in today’s overheated NYC startup environment – things are moving far too fast in most cases. Fortunately, with PublicStuff, I met Lily just as she started this past summer’s ER Accelerator program. Biased by a pervasive belief in the venture community that any business that sells to governments is all but DOA, there wasn’t an overwhelming amount of interest from the investor community right out of the gates. But I was intrigued by what I saw, and signed up to be a mentor to Lily through the program.

It became quickly apparent that, unlike so many of today’s startups, Lily had identified a very real marketplace itch that needed scratching. Even as a tiny company with only a couple of employees, she was steadily signing up new customers, pushing out new product releases, and proving over and over that the market wanted what she was selling. Most impressive to me – she sold her first 35 municipal clients without ever meeting one of them in person.

We talked to several of those customers and heard rave reviews. In September I asked my colleague Rahul to join Lily at the annual convention of the International City Management Association to see her selling in action and to talk to as many potential customers as possible. By the end of the day, Rahul had become the company’s #2 salesman (no one will ever eclipse Lily), and had secured over 30 warm leads. He called me excitedly with a “fish in a barrel” report of his sales efforts. The PublicStuff offering is so strongly desired by these customers, and so simple to explain that someone who only tangentially knew the company was able to quickly become an effective pitchman.

With Rahul’s Milwaukee experience in hand, and a growing sense that Lily was a superstar of an entrepreneur, we had everything we needed and signed up to invest. We’re excited to have the deal closed, a terrific group of investors around the table, and a world of opportunity in front of Lily and her team. If you’re reading this, live in a town or small city, and want to help your municipality crowdsource its customer service, tell your mayor or city administrator about PublicStuff. You won’t regret it.

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One Comment

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  1. November 15, 2011

    Congrats Brad!

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