Latest / NC Tweener Talks / Valuable App vs CivicReach: The Battle of AI, Government, and Hidden Treasures
Transcript
- 00:00:04 - Announcer Welcome to Tweener Madness, the high stakes startup showdown where eight promising companies go head to head for a $25,000 investment prize from the Triangle Tweener Fund. Each episode, founders from two companies will step up and pitch their vision to our selection committee. They'll face tough questions, defend their business and make their case. Then, after both have had their shot, the selection committee will decide who moves on and who's heading home. This is the Exceptional eight, where only the shar as startups survive. Here's your host general partner of the Triangle Tweener Fund, Scott Wingo. 00:00:39 - Scot Wingo All right, welcome to this round of the Exceptional Eight. Here we have. In this round, we're going to have Civic Reach versus valuable. Chip Kennedy is representing Civic Reach. Welcome, Chip. 00:00:51 - Chip Kennedy Thanks for having me. 00:00:52 - Scot Wingo Awesome. Your computer fell asleep, so you work on that while I introduce our selection committee. So let's see, to my left we have Dave Neal. He's from Duke Capital Partners. 00:01:04 - Chip Kennedy Hey, Dave. 00:01:04 - Scot Wingo Then in the middle we have Kevin Mosley. He's from Jurassic Kevin and I'm a Jurassic. Has one R and two S's. I'm always wanting to put another R in there. I like, have a weird. I have a weird dyslexic thing with words. I've finally gotten to where I was like, I'm gonna learn to spell this. Okay. 00:01:19 - Kevin Mosley If you'd like to recommend that we change that, we can, we can talk about that later. 00:01:22 - Scot Wingo Okay. Yeah, well, you know, it would be more unique with a random spelling and then Evan Shear from Oval Park. 00:01:29 - Evan Shear Sweet. 00:01:29 - Chip Kennedy Nice to meet you as well. 00:01:31 - Scot Wingo So if folks watching or listening want to learn more about our selection committee, we're not going to do intros because they've been kind enough to pre do intros. So we've got 20 minutes plus of these awesome folks going into their background, what their firm does and that kind of thing. Chip, any questions or anything before we get started? 00:01:48 - Chip Kennedy I think we're ready to go. 00:01:50 - Scot Wingo All right, I'm going to start my 10 minute timer. This is super casual. No one's really kind of blown by, so. And you're a consummate professional, so I know you won't, but it's. The selection committee requires me to do this. Go ahead and start your pitch. 00:02:03 - Chip Kennedy Fantastic. Thank you all for coming today. I appreciate the opportunity to pitch. It's great to meet you. Excited to share more about Civic Reach. So my name is Chip Kennedy. I'm the founder and CEO of the company Civic Reach. What I'm going to talk about today is local government customer experience. Now, that's a mouthful and a little bit foreign. So we'll bring it down to a much more fun topic, paying taxes. Has anyone here had to pay a property tax assessment recently? Any Wake county folks where that number went up kind of high? 00:02:32 - Announcer Yeah. 00:02:32 - Chip Kennedy Okay, so to relive maybe a great experience in your life, let me show you what you went through. You received this assessment to your home, and let's say it came back higher than expected and you wanted to appeal. You then went to this online portal, maybe after some Googling, to figure out the information you needed to start your appeal a couple hours in. At this point, if you get frustrated, you might call this phone number for Wake County Tax Administration. They just don't happen to pick up. So back to hours of Googling to find this second portal where you'll start the process of writing your appeal, adding information. Now, portal number two is going to require you to look up North Carolina State General Statute 105, 317.1 C, which is an online PDF, and I increased the font 3X to make sure you could actually see see it. And that will take us to portal number three, where we'll submit more documentation and follow this process along. How was that? 00:03:28 - Scot Wingo Easy. Easy peasy. 00:03:29 - Chip Kennedy Super easy. Now, I'm not here to give an indictment of our county's tax assessment appeal process, but I am sharing what we know to be par for the course when it comes to our customer experience and how we're treated. And local government. It's not just tax assessments. It's neighborhood zoning changes, paying your water bill, or any potholes you hit on the drive here today. 00:03:50 - Chip Kennedy All too often, when we want to advocate for ourselves and our communities with our local governments, we hit roadblocks and the process is downright impossible. Now, to add some context to how we're feeling, it's not just a nuisance that we feel in this room. Bad experience in government is an upstream problem to a host of issues in democracy. We know that folks who have bad experiences with government are less likely to vote. 00:04:17 - Chip Kennedy We know that on the whole, in this country, collective bad experiences puts a drag on the economy. The prediction is that 9 billion hours are spent every single year by Americans filling out government forms, making phone calls, and otherwise just trying to get benefits from the government that they need. Collectively, everyone is a customer of our own governments, and we're feeling this problem. And the result is that we're losing trust in the very government that's trying to serve us. 00:04:46 - Chip Kennedy Now, the political willpower, the market shaping this as well as mandates from federal government and beyond have never been louder. Cities and counties in this country list both artificial intelligence procurement for customer service and fixing customer service by any means as top IT priorities from the top down. For decades, the federal government has pushed, funded and mandated that we fix customer experience within government at all levels. And we're aware that our new incoming administration has put a premium on any technology that can make government run more efficiently. All told, the cost and market for just picking up the phone by government in this country is worth $28 billion a year at all levels of government. That is the contact centers used to serve us just over the phone. This is where Civic Reach comes in. 00:05:40 - Chip Kennedy We're a voice AI platform for easier, affordable and better government information service delivery for governments themselves and all the rest of us that are served by it. We're new, but our idea has spread incredibly fast among local governments in this country. It's simple. You as a resident pick up the phone and call and AI picks up and delivers the best possible customer service and actually helps you solve the problems you need. Whether that's tax assessments, potholes or anything else. It's phone based customer service that just simply works. 00:06:11 - Chip Kennedy And it pushes us to be the first voice based AI customer experience platform for government in the country. Now our pipeline is growing incredibly fast and we've established a very clear go to market. Our ICP is clear and we're focusing on piloting our technology with cities and counties, the largest of them across the country. Since October, we have entered conversations with over 40 customers and tripled our pipeline value to over $600,000. Of those customers, we've started conversations with most of them in just the last three months. And as of two weeks ago, we have gone post revenue with our first customer and gotten to a 15k ARR. Where we go next is to rapidly provide Civic reach as a voice AI platform for many more cities and counties and many millions more residents in this country. We break down our market many different ways, but we know that even at our starting point, we're talking to a particularly eager market to solve this problem with an incredibly high order value. 00:07:18 - Chip Kennedy Our founding team was handpicked for this social and govtech mission. We're seasoned startup operators, technologists and folks with decades of experience selling to local government. And we're mostly Triangle based. Our advisory board and backing organizations are just as passionate. Includes the Government AI Coalition, the foremost AI regulatory board in the country for local government, as well as Marty Walsh, the former Secretary of Labor. We'll soon be raising a $1.5 million pre seed round which is what my ask is here today. We're looking for investors that are bullish on Voice AI that are excited to fix problems in local government and are ready to roll up their sleeves with our social mission. Thank you for hearing me out. 00:08:03 - Scot Wingo Thanks Chip. Good job. 00:08:05 - Chip Kennedy Appreciate it. 00:08:06 - Dave Neal Who else is out there doing something similar to this? 00:08:10 - Chip Kennedy So to keep my pitch short I threw some things in the appendix and happy to give you a brief overview of our competition landscape. 00:08:17 - Scot Wingo This is a good best practice for other founders having the go to appendix of the most frequently asked questions. 00:08:23 - Chip Kennedy Appreciate that. Continue, but on a brief level and we can dive down as you see fit. We see three different levels of competition. One are the incumbents folks that we all use every day, even if you don't know it. These are the folks that build most local government websites and service delivery tools including Civic and Granicus. We then have other direct competitors, folks who provide customer experience in government, including Polymorphic and Citybot. Citybot is a chatbot that just introduced Voice after we did last month. Polymorphic is a constituent relationship management tool that is exploring Voice as well. When we talk to a government that is actively procuring Voice AI for this purpose, we're almost always compared to these two and so far we're winning contracts just as often as they are, if not more often, and able to compare our AI head to head and coming out on top. 00:09:13 - Dave Neal What have you learned about sales cycle in this market? 00:09:16 - Chip Kennedy It's a great question. So government notoriously is a tough sales cycle. We have the advantage of first mover and early startup advantage, which means for our first year or two we're taking advantage of ways that governments have rolled out the red carpet for tech pilots. So when you see the average order value of $15,000, that's not by accident. We research procurement thresholds for municipalities and we learn what is the cost that will get us in the door not just to make a quick sale, but in order for us to truly be a design partner and learn with these municipalities what our product can be. Because of that, our first contract was sold in less than three months from first conversation, which included sign off from at least eight city officials in that first city. And we expect to use that playbook and process for our next 10 customers and beyond and then build up the sales process and patience so we can start to go after larger contracts, RFPs and do the things that we'll need to do as a much bigger tech vendor in government. It's a good question. 00:10:14 - Evan Shear Thanks. 00:10:16 - Kevin Mosley Can you get a little bit more into the detail of the product itself, like, how did you guys build this? 00:10:21 - Chip Kennedy So from the product perspective, our goal is a free for resident as our end user product, where they're picking up the phone the same way that we would if we are frustrated and wanted to get an answer from that government anyway, whatever that service may be. From the government's perspective, the whole process is no hardware, no downloads. So they're delivered a phone number and they get inbound calls from the AI, meaning that they're not setting up a system by any means. We're handling all of that process for them, which was done after extensive research with the governments we wanted to serve about what would work from a tech vendor. Especially in AI procurement. The AI is agentic. It sits on the line, it does information delivery, so it just listens, gives FAQ all from public information available. And something that cities and counties and governments are particularly good at is just putting information out in the world. So we're able to use it for training these AI systems. And then it's agentic in terms of service delivery, meaning when the resident has a question that requires a form to be filled or a service request to be made, we automate all of that so that city government not only is having phone calls that they don't have to take and spend time on the workflow of the service requests, the emails, back and forth, et cetera, we're automating a large part of that and then doing a warm transfer at the end. So you can always get through to a human by default and the city's not losing that connection to their residents or customers. 00:11:37 - Kevin Mosley Got it. So that's really cool. How is the onboarding process then for the governments if they have to, you know, they've got all this information out there. How do you guys organize that or do you not? 00:11:46 - Chip Kennedy It's a great question. We actually do an extensive amount of data governance for each customer. It is a slightly painful process right now for us because we're talking with customers that are a bit slower when it comes to tech adoption. Data governance is core to good quality AI systems. Governments are not always, especially municipal governments, always there yet. However, in our sales process and in our customer success process, we're helping them with that work. The value add for us later on is that if we're the ones who help them structure that data governance system, we're their go to provider for all AI from our first customer to existing customers who haven't even procured with us yet. We are their source for AI procurement. They're asking us how to plug other tools into our AI system we've built. It sets us up to be the true AI and data layer for these governments, especially when other vendors come in and we can sell directly to them. 00:12:35 - Evan Shear Can you share a bit more about how the current and future administrations do or do not affect the business? 00:12:43 - Chip Kennedy It's a great question. So you'll notice I put an executive order and then an executive order from the new administration that contradicted the one before. We're looking at two trends here and they're not as contradictory as you might think from how we've studied it. One is this long tail independent of politics push from the federal government down to states and municipalities to improve customer service. And I say this is independent of politics. This is just being asked for. People don't like bad customer experience and it does truly have a negative effect on government's ability to serve. That's true in our new administration. You have to look kind of between the details of where it's being said, but it is still being said. And it's been true of past administrations of all stripes. With our new administration's push mostly through doge, of increasing efficiency, putting aside what the actual implications of DOGE are, but reading the text as written, it is explicitly calling for more efficiency. Looking at technology as the driver of that efficiency. We have found this to be true. When we talk to municipalities, if they're thinking through how to improve customer experience and that is the spirit of just improving government for the governed, they fall in line with us as a fantastic play to make things more equitable, better for the residents, and all around a way to just increase the experience they can provide. When we talk to more conservative governments that are only concerned about efficiency, they also see the same value props in us. They just might talk about it differently. They see a way to not to have to have as much staff. They see a way where if they're losing staff, they can now operationalize and automate some of the things that those CSRs did or those customer service reps did. So in both cases it makes us apolitical and it lets us follow both trends with the same product. 00:14:19 - Scot Wingo Awesome. 00:14:21 - Evan Shear When you are going through this sales cycle, what's the main pushback or obstacles that you've been facing so far? 00:14:27 - Chip Kennedy Our whole pushback comes from selling an emerging technology to a hesitant market. GovTech is the most conservative of any market. Adopting tech and voice AI is the next big thing. Frontier technology. How we square that peg is we only look at the early adopters. There's so many indicators in the market. As I mentioned, we follow all of the IT awards for municipalities. There are many. We know who's winning awards, who's taking risks, who's already piloted, who's already piloted AI. That's what gets them on our list. And if they're not going to pass those tests, then we're not going to spend that much time talking to them. And we're making a larger bet that by getting the early adopters involved, they'll help us evangelize this technology to the 90% of the market that's not ready to yet procure this technology. And that's the big bet. Most of our pushback has been, is this the right time? Are we ready for this? The ways we've overcome it is just by having a fantastic go to market and sales process for these governments to figure out what are they looking to do? Is it about efficiency? Is it about better experience? Is it both? And are we talking to the right customers? And once we found the right customers, chief information officers, city managers who really see the value in this solution, they've been our biggest champions. One thing that I do is talk a lot on LinkedIn. As a founder, what people don't really notice is how much I'm interacting with folks in government who do not use LinkedIn very commonly. But the ones who do are shouting about with me and they're shouting about Civic Reach. So we've been able to find those amplifiers and those customers and they help us get over the hurdles of hesitancy of emerging tech. 00:15:57 - Evan Shear Awesome. 00:15:58 - Evan Shear Thank you. 00:15:58 - Chip Kennedy Of course. 00:15:59 - Kevin Mosley Talk to me about Lindsey, your co founder. How'd you all connect? 00:16:03 - Chip Kennedy It's a great story. Lindsey Freeman Avogliano is Chapel Hill based, formerly a lawyer with Smith Anderson, formerly a VC based in New York and all around a fantastic startup operator with decades of experience helping startups. She was our lawyer for a year. 00:16:19 - Kevin Mosley Got it. 00:16:21 - Chip Kennedy So she advised, helped us raise our first round, was a fantastic advisor, and then she was ready to work on her next big startup, not knowing which one. And little did I know that she was scouting Civic Reach as an advisor, looking for a role. So when she left Smith Anderson, she asked if she could come on board. And I knew that I had the best possible operating officer I could ever imagine. She keeps the company running day to day and really thinks through strategically how we can grow as a company here in the triangle and how we can support all the ambitious sales and product goals we have. 00:16:54 - Evan Shear Wonderful, great. 00:16:54 - Evan Shear That's All I got, last one for me is just what keeps you up at night today about the business? 00:17:01 - Chip Kennedy It's a good question. AI is an amazing market. It suits me well. Govtech's an amazing market. It suits me well. The speed of Govtech procurement and the speed of Voice AI are two drastically different things. So I sit in front of rooms of investors all the time that tell me that why are you moving so slow? I sit in front of rooms of government folks all the time and tell me why are you moving so fast? That gulf is only going to grow bigger. So how do we continue to establish trust with our customers and trust with residents? This is a kind of scary tool for governments to use despite all the values they see without compromising that trust. We also need to move at the pace of what Voice AI is doing and make sure that we don't have startups that aren't selling the government test out our space and roll over because we didn't iterate on product fast enough. I think we're bridging that gap really well today, but that equation changes daily. 00:17:51 - Evan Shear Great answer. 00:17:51 - Scot Wingo Thank you. Two quick questions. So I imagine you have to roll out. You can't just like implement everything right? Is it the. Where do you. Where do municipalities start? Is it the tax kind of area? Is it the dmv? Is it criminal justice? Like I don't even know. Like you know where all the. Is it the pothole hotline? Like where. Where do you like get your fast wins so you can kind of like roll out or do you not think of it that way? 00:18:16 - Chip Kennedy We absolutely think of it that way. So there's three and they're not all fast. We're still in government here, but three areas where we are testing implementation to just that question. So within our icp, we've already segmented it. Three use cases that we're testing to see who was most going to procure a contract and where do we provide most value to that community? Number one is the pothole hotline. But everything else, for Those familiar with 311, this is the idea of a centralized phone line where user has an call and you wage a problem. There's known issues that sort of dominate 80% of 311 calls. Potholes, graffiti, illegal dumping. There's a long list that's our starting point for probably a third of customers in our icp. They want that hotline and they've never been able to afford a true call center to serve that hotline. And we're the cheapest option they've ever seen or imagined. Case two is department specific and land and expand. This is for larger cities. We're talking to the city of New Orleans. We are not selling the whole city right now. We're selling one department that use case is workforce development, and our scope will be to workforce development. By the nature of AI and the nature of how we've built this content is independent of it. So if we can have the data that's accessible, we can build a system that knows any content. It's more structurally. How do we make sure that we're respecting the workflows of each department, the workflows of each city. The third bucket is service delivery at the social worker and case worker level. This is specifically around things like weatherization, small grants to residents, generally folks in need that are served either by their governments or by associated nonprofits with their governments who have been a huge new customer to us that's incredibly interested in what we're providing, and that's in the bucket of how to help people most acutely day by day and make sure that their needs are heard. 00:19:59 - Scot Wingo Got it. Last question. I'm asking this for a friend. Any connections to Duke? 00:20:03 - Chip Kennedy To Duke? 00:20:04 - Scot Wingo Yeah. 00:20:05 - Chip Kennedy Not enough to start. 00:20:08 - Scot Wingo I'm just giving Dave a hard time. Yeah. Any of the founders go to Duke or. Yeah, you should definitely talk to the university. I know you probably have heard this, but like the Wolfpack Investment, the Carolina, The Duke folks. Yeah. 00:20:20 - Chip Kennedy Yeah. Currently in talks with Wynne right now about a potential investment. I did not go to a North Carolina school. I've adopted this place, and I'm a huge fan of the Triangle. You haven't heard me shouting about it, but many of our advisors have, so. Wolfpack Investment Network. 00:20:32 - Scot Wingo I think if you watch to do Game on tv, you qualify. Not exactly clear on the rules, but there's. 00:20:36 - Dave Neal I don't know where that is. 00:20:37 - Scot Wingo You've said they're kind of loose, so I don't know how loose. 00:20:38 - Chip Kennedy You can talk about those requirements. 00:20:40 - Scot Wingo Yeah. Selection committee. Last. Last question. Want to sneak one in there? Awesome. 00:20:46 - Dave Neal Thanks. 00:20:46 - Kevin Mosley Great job. 00:20:47 - Scot Wingo Yeah, thanks. 00:20:47 - Chip Kennedy Thank you all. Appreciate the question. 00:20:48 - John Bosman Great work. 00:20:49 - Chip Kennedy Thanks, Scott. 00:20:49 - Scot Wingo Yeah, absolutely. 00:20:50 - Evan Shear Thank you. 00:20:56 - Scot Wingo Here we are in the second part of this round, and we are here with Valuable. And we've got John, Amy, and John. So it's easy. Only two names to remember, but three people. 00:21:06 - John Bosman Perfect. 00:21:07 - Scot Wingo So you guys will have 10 minutes to give your pitch. Most people have not gone over, so it's. You know, we haven't had three entrepreneurs, so that'll be fun. And then maybe even before we Kick it off. Why don't you just introduce yourself and say what your role is for the firm. Amy, Ladies first. 00:21:23 - Amy Wolpert Okay, thank you. My name is Amy Wolpert and I'm the chief customer officer. 00:21:30 - John Bosman And I'm John Bozeman, the chief technical officer. 00:21:33 - Evan Shear I'm John Wolpert. I'm co founder and chief product officer. 00:21:37 - Scot Wingo Yes. And we learned on our reveal exceptional 8 livestream this John has an awesome Millennium Falcon. You may also as well because you're the coder. 00:21:45 - John Bosman But I have the old classic ones. 00:21:47 - Evan Shear Back in the 70s. 00:21:48 - Scot Wingo The Kenner 78. Nice. The live stream got hijacked by talking about Millennium Falcon. 00:21:54 - Evan Shear I can do that. 00:21:54 - Scot Wingo That's likely to happen on my live streams. Okay, you guys have 10 minutes to pitch and we're going to get started now. Go. 00:22:02 - Evan Shear It's good to see you guys. I'm going to go through a couple of slides and then we're going to really go. Go more interactive than I think is usual. And you can throw to us. And we all have our roles and we'll be able to answer questions. But I want to get through the basics. So the basic is we are solving an immediate problem that is pretty clear to us because antiques dealers and estate sale owner liquidators like my wife have it rough. It's a hard business. It is low margin and it is low margin principally because of time. Time is the problem. Somebody once recently asked what is the biggest problem for these people? I said three things. Time, time and time. Wasted time. Vetting estate opportunities. Bad deals that take as much time to vet as good deals. That's a problem. Time valuation, research. Wasted time. Hours and hours and days. An estate. Has anybody gone to an estate sale? Yeah. So you know, the prep time can be in the weeks and it's certainly in the days. And that's just going through photographing things, getting stuff labeled, getting stuff in the right order. You can't really solve that one. You got to move stuff around. You have to clean it up. But then inventorying it and getting it prepped for sale and knowing what you're gonna charge for it, days and days, finally prepping the sale. Waste of time. Spreadsheet L and most of these companies, whether it's antiques dealers or estate sale owners or even auctions, they're on spreadsheets, sometimes paper. So low tech. Our Solution. We are AI people. I'm from Watson. John's a distinguished engineer from IBM. We're both IBMers and in the past we call ourselves retropreneurs. That's people that can Retire but didn't. Right. We think we can take it to the 20 year olds. 00:24:05 - Scot Wingo Once you on Jeopardy, you're like what do we do now? 00:24:07 - John Bosman Yeah, exactly. 00:24:09 - Evan Shear There's three types of entrepreneurs. We'll talk about that. There's the kid that can eat ramen, the guy that already had an exit and the retrepreneur. Right. So in just minutes an estate sale company can do inventory and valuation research on hundreds of items. Saving time. Saving time, saving time, days. It's AI driven efficiency and collaboration, security, seamless workflow and yeah that's all I'm going to really say about AI. We've got a lot of AI. It's a lot of it is invisible. We could talk to you all day about it. What's important is the problem. We're solving the opportunity however in the way we do this. We started on the consumer side trying to help collectors. Our CEO Bill Goodwin is a collector generations back. His family's been collecting since the Mayflower. He loves collecting and he's got some pretty nice things. He doesn't want anyone to know what he has until he sold it. Most of my career at IBM and after and John's as well in ad tech. He's an OG in ad tech came from this conundrum we need to share in order to coordinate but we can't share. We need to know what each other has, what each other's intentions are, what each other's stuff is. But I can't know before I know that you are going to be not going to case my house. So I'm not going to put my $200,000 watch on Facebook marketplace to find out what it's worth. So we have a private data problem and this is the great digital gold past the ad tech age. So if we're thinking that's a pretty tiny problem to solve estate sales, antiques. How much money is in that? Well a there's a lot of money and we'll talk about that in a minute. But the big opportunity is in cracking open wide open. How do you make curation AI intermediate curation the post ad tech ad tech privacy preserving ad tech. I'm not going to sell your data to advertisers. Your AI that I'm helping you build up for yourself which you own inside the valuable platform based on your curation all your stuff becomes the system that allows it to go and find the opportunities that you want want. So you have a great collection. The perfect thing that just came up at Leland Little isn't even on the market yet your AI is going to be able to tell you about it. I didn't have to sell your data to an advertiser to get that connection. This is the change, and it scales because of vectors, which we can discuss later. And this is beyond marketplace. So we deliver value, even if it's just one person on the system. One estate sale company can get value. One collector can get value. But as we grow every transaction from buying watch, selling it to another company, selling it to the auction company, new collector, collector puts it into an estate air, gets it, auctions that, that never leaves. That asset. And its life cycle, its provenance is part of the valuable system forever. And every new transaction is an opportunity for a new customer. That's it. So that's the basic business. Lots more to tell you about. And we can, in fact tell you about the team and the market outlook. You have any questions? 00:27:54 - Scot Wingo So we got four minutes left. If you want to go or any other stuff, we'll add it to the. 00:27:58 - Evan Shear Q and A maybe. 00:27:59 - Scot Wingo All right. All right, sounds good. Put it in the Q and A. 00:28:02 - Evan Shear Bank very closely together. You said that it's a very hard business to succeed in, and there's also a lot of money in the business. So can you walk us through the economics of the market from both a, you know, estate sale company side as well as just, you know, the consumer of the product? 00:28:19 - Evan Shear Yeah. So the. To be clear, we're focused. You know, if you want to fail at two things, do two things. Right. So there is a nuance to this. We do. And our CEO is very passionate about the collector. But we solved the problem for the pro, for the estate sale owner or liquidator, the auction company. We are in talks with auction companies. They're quite interested in how we do things. And with antique Steelers. Right. So when we get that inventory, then lots of good things happen from there. So we focus on them in that industry, the direct, addressable market. Let's stay with the small side. We have comparables, companies that are charging 60 bucks a month, 300 or $100 a month just for effectively, Kelley Blue Book for stuff. And I think that an interesting thing that we've done is to say now it's not just inventory and it's not just Kelley Blue Book. It is life cycle. That that asset goes is findable by your market. You transfer it to the person you bought it to. The fact that you did that is going to give you opportunities with them in the future, and it becomes more interesting. And we think that's viral. Go ahead. 00:29:41 - Amy Wolpert Well, I just, I don't think we hit the low margins part of your question, Evan. 00:29:46 - Evan Shear Yeah. 00:29:47 - Amy Wolpert So the way antique dealers work, we were just with some dealers yesterday at Pickfish Lane on Hillsborough street, and they might buy something for $60 and turn around and sell it for 120. I mean, that's a small example. That probably wasn't the best one. But if they're spending several hours researching how much they can sell it for, it's a hobby, really. I mean, that's not much. So that was the part about it being a low margin. But yet with. I know we're going somewhere with the. Sorry, the baby boomers being such a large generation and all of their stuff. 00:30:33 - Evan Shear Yeah. So this is a good moment. Right. The great wealth transfer is happening. And another use for the app. Again, it's kind of an adjacency thing. Right. I started one of the first ride sharing companies in San Francisco and Uber did a pretty good job of doing that as well. They're adjacent. So, see was a guy at a party that's trying to pick up a date with limo on an iPhone in 2009, and that guy was able to virally spread that app to lots of other people that had nothing to do with that use case. With almost no changes to the app. That is a good situation to be in as an app. We think it's the same thing. By being able to allow inventory for estate companies, you're also allowing inventorying for and management of assets across a family. So Aunt Sally wants the piano and Uncle Jimmy wants this. And there's going to be an argument handling that kind of distribution is almost exactly the same problem. So it's a nice adjacency. 00:31:40 - John Bosman And I would just add it doesn't preclude just the common consumer model. 00:31:43 - Scot Wingo All. 00:31:44 - John Bosman All those fires in California. Imagine if you were to scanned in all your valuables, you get insurance checks and so forth. But how do you remember I had a house broken in, over $80,000 damaged several years ago. I couldn't remember all the things they took. Right. If you just spend five minutes scanning all the items in your house, all up in the cloud, plus it generates Excel and PDFs and so forth that you can store in a safety deposit box. That inventory management, when you have discussions with the insurance companies, when they argue, hey, this area was only worth 80 bucks and you can show what it was and what the valuation was at that time in the negotiations with insurance companies, even at the consumer level, let alone at the business level. It's an interesting Model? 00:32:24 - Scot Wingo Yeah. 00:32:25 - Kevin Mosley Can you go through the secondary estate piece of it? 00:32:29 - Evan Shear Yeah. I mean, there's 1.5 trillion in annual secondary market stuff. There's a lot of stuff out there, and people love their stuff. And we showed the trend towards having to manage that even more. My folks are getting ready to downsize. We have five triggers for the consumer. Size, death, downsizing, divorce, disaster, and discovery. Right. You want to buy something. So, 65 billion in the fine art market. Growing interest in identifying, valuing, and ensuring inherited or purchased art pieces. $78 billion in the luxury watch market alone. And one of our advisors, Mike Capps, who maybe some of you guys know, he's really into the watches. So we've been getting a lot of advice about that and connections in that space. And the platform is extensible. So we think that there were two ways to go with this business. You could either go really specific, and I like specific. I really do. I remember Bill Gurley calling me when I was at Pivotal Labs in San Francisco, and he gave me one piece of advice. He said, focus. I was like, yeah, we're focused on San Francisco. He goes, no, no, no. Focus on South Beach. Be the taxi company for four blocks. And I thought, I never lost that belief system. But once you've absorbed a lesson, then you have to transcend it. Going that specific down into a certain kind of shoe is too limited, valuable, which we also think is a pretty good brand. And we're good at branding is a good way of encompassing all of that. And we think it's still specific enough if we do it right. 00:34:15 - Kevin Mosley So how many professionals are using the platform today? 00:34:19 - Evan Shear We have 450 training course, 500 actives, and of that, we think about 30% of them are professionals. And on one evening, on an email that went out to a bunch of estate sale companies, we. I don't have the exact figure, but it was a remarkable, shocking increase in paid users. Like $200 a year, fully committed, yearly subscription. Just on that one email. 00:34:50 - Scot Wingo Let me give David. 00:34:51 - Evan Shear Yeah. 00:34:51 - Dave Neal Please adjust the features that you have in the app. How did you decide which features to put in it? 00:35:00 - Amy Wolpert That was all listening, but I want you guys to talk more about that. 00:35:03 - John Bosman Yeah. 00:35:04 - Evan Shear And accidents. 00:35:05 - John Bosman Yeah, yeah. I mean, it's come around from several different aspects. One is listening to the customers. Like, we spend a lot of time, and John's done a lot of video recording at these different thrift shops and different resells and consignment shops and so forth, talking with the owners. Right. And so that was really good impact to figure out what features are they missing. A lot of these guys, it's a spreadsheet or handwritten notes. It's amazing how many of these businesses just the idea basically can do an inventory and generate the price tags and generate it in Excel that they can put into quick. Hardly any of them even use QuickBooks from that perspective. And so just having the ability to interact was a game changer kind of set of features. So some of the features came from that, some of them from us using it from different aspects and friends and family is another one, big one from that perspective. And then we've kind of evolved as we've gone that little shift that John Taunton talked about, talking with those and then on hands. So like on hands that were Amy's and the companies she worked at, John and Amy going through with them, saying, all right, let everyone try it, tell me. And listening and recording as they're using the app at the state sales, as they're looking through the house and scanning it, working with the photographer that's scanning the different assets and paying attention. What they complain that they have to do all day and how they're interacting. Oh, can we put a feature in there that saves them time and effort or provides value at that point in time? 00:36:41 - Evan Shear Then we introduced it and vice versa. There are things that they haven't that aren't getting used. And there's one that we'll deprecate pretty soon. I can't say that there's major ones that we've deprecated. We're talking weeks, so we haven't deprecated anything. But we know that there's one thing that we did that nobody's using. So do you kill it because you don't want to support it? Yeah, we're pretty ruthless about that. So we will. But it's also accidents. Right? I can't say that we're. As much as I like being scientific about things sometimes it's not a hypothesis that John was like, you know, I could put labels in here. 00:37:16 - John Bosman I could generate NDFI labels. 00:37:18 - Evan Shear Everybody wants the labels. Like, they freak out about the labels. We could tell them about all this amazing tech. They want the labels. 00:37:24 - Amy Wolpert Well, then they found out about lidar the other day. So John Boseman added, yeah, we have. 00:37:30 - Evan Shear Like, you don't have to pull a ruler out to measure the thing. You just take three shots. Yeah, yeah, you can. Now we have lidar in the thing. And that got rid of a whole extra step for people. And then we again, AI is the whole new world of AI has been, because we would have had to figure out how to do an algorithm to transcode all that into our data set. And John's like, oh, how are we going to do that? And I'm the junior trainee coder. I write code, John writes code better. And I'm like, you know, why don't we just take a picture? Why don't we make that the sixth picture and feed it to the AI and have it work it out? Which worked great. So we didn't have to transcode anything, which was great. 00:38:17 - Kevin Mosley How's it priced? 00:38:20 - Evan Shear So probably going to shift currently. And I wish I could call myself a few months ago and say, hey, don't do that. We're on subscription plans. 5 bucks a month, 10 bucks a month, 20 bucks a month, 50 assets. 205 thousand. Problem is estate sale companies, thousands of assets, and they need an affordable way of handling that. So some of our more expensive features will turn into unit pricing on a premium basis. Probably stick with a core subscription. Especially interesting premium feature is connection to a live expert. So we're beta testing this right now. So as much as the AI is cool, being able to go into a chat with the AI and say, I don't agree with that. Are you sure this is the right price? And then for it to, say, accumulate enough information to say, I got a buddy, Leland Little, who is a perfect appraiser for this thing in particular. Won't waste her time. Would you like me to tap her in? So that kind of thing. We know that there are companies that are charging $160 to $100, $200 a month. A month. And getting it and doing $15 million business basic run rate on a pretty old stack, probably with too many people, but still. Yeah. So we can make that much more efficient because we can vet it. And that professional can come in and instead of spending 20 minutes, they're spending four minutes. 00:40:04 - Scot Wingo Okay, a quick one. 00:40:07 - Evan Shear But you mentioned some of the cons of becoming a marketplace. Do you think there are ever any pros having, you know, years down the line, thousands, hundreds of thousands of very valuable assets that you could potentially monetize. 00:40:21 - Evan Shear So I think I could do a PhD thesis on marketplaces. The ground transit marketplace is the hardest marketplace. You have to have a passenger and a driver in the same location at the same time on the same platform. Let's have a beer and we'll talk about that. And the biggest lesson I learned was never start with a marketplace unless you have a billion dollars. And I'm not Travis or at least 35 million to start of your own money. But what we learned with Flywheel served the taxi fleet company to solve their problem with digital dispatch. Now the cars are on the map while you pull in the users buys you time. Same thing here. You have to know which chick is it the chicken or the egg. And we think the chicken is the dealer. 00:41:17 - Scot Wingo Great. All right, we're going to have to wrap it there. Thank you very much, Valuable team. 00:41:22 - Dave Neal Thank you. 00:41:30 - Scot Wingo Evan, what are some thoughts that you know that you can kind of share on the two companies? 00:41:34 - Evan Shear Yeah, I think it's a tough decision. I think both have a ton of potential and I think maybe the for valuable first it sounds like the market size is absolutely huge. What they're doing today and what they could potentially do in the future if they're able to monetize some of the assets that they get on platform could turn things into a pretty eye popping number for Civic Reach. I was extremely impressed with the presentation. I think the founder market and the founder product fit is extremely apparent. I think that the way that they are thinking about the, the market, their how their product fits in the market and the way that they built sort of an agnostic to the government sort of stature product is extremely smart. 00:42:24 - Kevin Mosley Yeah, I love people solving really boring problems and sometimes it's the things that you aren't thinking about. I really enjoyed that about valuable. I think they're solving a very obvious problem when it's staring you right in the face like it was with us today. I thought both companies did an excellent job. I agree with Evan. I thought Civic Reach founder presentation was excellent I believe and especially his ability to go out and get additional funds as time goes on too. Seems like that group along with their advisor network is really, really impressive and seems to be well connected, well structured. Just a really impressive early stage company. With that said, I do think that you know, valuable setup more maybe roundabout way of going about it. But where they are now, it's exciting. Yeah. As Evan said, it's a, it's a tough call. 00:43:18 - Scot Wingo Yeah. Dave, what are your thoughts? 00:43:21 - Dave Neal So the Civic Reach presentation was extremely precise. I really like that it was, you could tell he knew a lot about the entire market and everything that was related to it and he relayed that, you know, very quickly and concisely the problem they're addressing. I always like to see problems that are ridiculous that should not exist in the year 2025 and if there ever was one, it's the way that you interact with government. 00:43:50 - Scot Wingo Yeah. You have to do to go to the DMV and you'll see like a ridiculous process in action. 00:43:55 - Dave Neal Exactly. 00:43:56 - Evan Shear And. 00:43:58 - Dave Neal I was, I was fascinated with valuable that because that in my 30 or 40 years ago you just go to estate sales all the time. And I can only imagine how hard it would be to do that as a professional and try to do it quickly in a way that you could make money effectively. And so I think that's an interesting idea. It also occurred to me there gotta be other uses for this as well. I mean I was thinking about, I actually take a video of the rooms in my houses so that I know what's there. And if you ever get an insurance claim, this thing sounds like it would be even more useful in that it would price it and give you some idea of value and you could have much more effective arguments if you ever got into a fight with an insurance company. So two interesting ideas for sure. 00:44:47 - Scot Wingo Okay, well this is the tough part. Dave, you're up first. Alphabetically, you have to pick one. Which way are you going? And give us a little bit of a rationale. 00:44:56 - Dave Neal So I'm going to pick Civic Reach. I just thought the presentation, his ability as Kevin indicated to go out and raise additional capital. What he understands about it, the size of the problem. This is perhaps not large venture scale type company, but I think it's one you could build and actually sell for a return that would be good for investors. 00:45:17 - Scot Wingo Yeah, when you, when you see strap and you only raise like you know, six or seven, you don't have to have like a massive, you know, this doesn't have to be a billion dollar exit. 00:45:25 - Chip Kennedy Right. 00:45:26 - Scot Wingo Then names. 00:45:27 - Evan Shear Yeah. 00:45:28 - Kevin Mosley I'm also going to go with Civic Reach. I think for that, that reason as well, the their ability to get to the next stage whether to go raise more money or to go maybe there's a quick exit out there. It seemed like there's a lot of strategic fits that might be able to go acquire them in pretty quickly. I think that's a good investment thesis, Evan. 00:45:47 - Evan Shear Yeah, I'm outvoted so I'll go with valuable. I think the ability for the company to scale extremely quickly and sort of land in the asset collection and protection space, but then very quickly move into the insurance or marketplace space. All with what I assume is a very limited amount of capital needed and very low barriers to entry and barriers to sale. With these potential customers not using any technology whatsoever, it could very easily become a very, very big company very quickly. 00:46:22 - Scot Wingo Appreciate you guys taking time to do this. 00:46:25 - Dave Neal My pleasure. 00:46:25 - Scot Wingo And good feedback and again, there's not like a. This is not a zero sum game. I think both companies can be successful and hopefully they are. So. Yeah. But if, you know, we've. We have Civic Reach moves on to the Fabulous Four and we'll keep an eye. Unfortunately, we won't know how the Choice was for 10 years. That's the other weird thing about Venture. So maybe we'll do A. In 10 years, we'll get back together, knock on wood. And we'll do a retrospective. But until then, we'll have to keep an eye and see how these companies get. Thanks again, guys. 00:46:53 - Evan Shear Yeah, thanks. 00:47:00 - Announcer And just like that, another company moves one step closer to a $25,000 investment in the Triangle Tweener Fund. The competition is heating up and the Fabulous Four is next. Who will rise, who will fall, and who will claim the ultimate prize? This episode was edited and produced by Walk West. Want to follow more of the action, visit tweenermadness.com and follow us on social media for updates, behind the scenes content and more.