Mack McCormick, a legendary historian of American blues records and the musicians who made them, has famously said that what he did "wasn't research, it was search."
In other words, he was an original explorer and mapper of terrain, as opposed to the later investigators who'd follow his blazed trails.
For some startups, the work of landing inital customers requires an analagous type of "search," as opposed to research. You drive the miles. You log the legwork. In the process, you gather crucial contacts and firsthand knowledge about your industry--the sort of insider wisdom that creates high barriers to entry for future competitors.
One startup living through this process is OpportunitySpace, the makers of an online information platform that maps, organizes, and shares the property holdings of government entities. And as OpportunitySpace has found out, searching comes down to a essential tactic: networking.
Search, Not Research
Right now, most local governments do not even know what they own. The records of their holdings are often disorganized, usually on paper, and seldom digitized. If they're digitized, it's on an outdated spreadsheet.
This is where OpportunitySpace is performing its own version of search. It's doing the legwork of locating and sorting through these records. The aim is to create digitized, online versions that anyone--the governments, local developers, concerned citizens, environmental activists--can access.
How does a startup like this land its initial set of customers? Cracking local governments has always been a challenge, usually one requiring patience, connections, and the capital or cash flow to survive a lengthy sales cycle.
As it turns out, cofounders Alex Kapur and Cristina Garmendia smartly networked their way to their first client, which is the consolidated city-county of Louisville, Kentucky. Their strategy provides a great example of a networking principle that is easy to grasp but difficult to execute: When targeting a customer, network your way not to the customer, initially, but to at least three of the customer's trusted connections.
The cofounders first learned this principle from Scott Sherman, the founder of the nonprofit Transformative Action Institute. He served as an informal advisor to the cofounders while they were part of the Points of Light Civic Accelerator, a four-month program that invests in and supports seed stage social ventures. He explained "the laws of three introductions" as a way to spur actions. Over the next two years, the cofounders would take his lessons to heart.
Every Connection, Conversation Matters
It began during the summer of 2012. At the time, Kapur and Garmendia were students at the Harvard Kennedy School of Government. Kapur was already in hot pursuit of potential partners and like-minded thinkers regarding data-driven land use and real estate development. He attended the International Open Government Data Conference at the World Bank in Washington, D.C. "By sheer luck, I was sitting next to a gentleman named John Sullivan from the General Services Administration, who was working on a way to improve the quality of data to manage the federal government's facilities," he recalls.
The lesson: When you're at a conference, start a conversation. After Kapur and Sullivan chatted, the latter introduced the former to Ethan McMahon, who worked for the Environmental Protection Agency. McMahon was interested in using open data in the area of brownfield remediation. Naturally, he was interested in what OpportunitySpace was building.
It was McMahon who first told an official from Louisville about OpportunitySpace. That official was Ted Smith, the Chief of Economic Growth and Innovation. Smith has a national reputation as a champion of open data for economic development. So it's no wonder McMahon was eager to tell him about OpportunitySpace.
Meanwhile, Kapur reached out to Jayson White, who at the time was Program Director at the Kennedy School's Ash Center for Democratic Governance and Innovation. "Jayson was very generous with his network of contacts," recalls Kapur. White reached out to many municipalities on the company's behalf--including Louisville. And that was the second trusted contact from whom Smith heard about OpportunitySpace.
The third also came during the summer of 2012. White invited OpportunitySpace to present at the Urban Policy Advisory Group, a forum where city leaders meet and share ideas. The host was Stephen Goldsmith, a professor at the Kennedy School and the former Mayor of Indianapolis. Smith was in attendance while Kapur presented. After the presentation, he introduced himself, and told Kapur that he'd already heard about what OpportunitySpace was up to.
And that's how this searching startup landed its first customer.
Closing Takes Time
After working with OpportunitySpace, Louisville fast-tracked 250 properties for development. In a process that closed just weeks ago, the city-county awarded $38,000 to four separate proposals to convert those sites into useful properties. It was a great moment for the startup. And in some ways, it was nearly two years in the making, going back to the networking of 2012.
How do you stay afloat when sales cycles can take two years? You bootstrap and you fundraise. Kapur cashed out his own 401(k) when the company launched. So far, the company has raised roughly $80,000 in founder contributions, friends and family money, and awards. For example, as the winner of the Public Sector Innovation Award, presented by Accenture as part of Harvard's I3 Challenge, the startup received $10,000. OpportunitySpace is also close to closing a $500,000 angel round. "We're essentially fully subscribed. There's a tiny bit of room left. I just need the signatures," Kapur says.
It also helps that, along with Louisville, the startup has four other paying customers: the Rhode Island localities of Central Falls, Pawtucket, Cumberland, and Providence. Cumberland was initially unable to export property data from its tax assessor's spreadsheets; Garmendia wound up calling the assessor's software provider, to figure it out. Talk about search, not research.
These are the growing pains of a startup. The plan, says Garmendia, is ultimately to "publicize our data standard to make it easier for cities to give their data to us in uploadable form."
For now, though, OpportunitySpace is moving one city at a time. Some big names are on the docket: Boston, Miami, San Francisco, Seattle, Chicago, and Austin. Cracking these markets won't be easy, but this much is clear: OpportunitySpace has a tested networking blueprint in its favor.
If you want to network with OpportunitySpace, feel free to contact them at email@example.com.