The political startup

The political startup
Could Silicon Valley change the consulting world forever?

Sure, technology has changed politics by making organizing and communicating far easier. But it might not stop there. Outside-the-beltway political startups might just change the face of the political consulting business by shifting its center of power. 

Until recently, the model for a large consulting firm had been to bring in some big names, identify some deep-pocketed clients, charge a hefty retainer and go from there. The critique is that it's not exactly an incubator for innovation. Now, technology startups versed in the ways of Silicon Valley are developing campaign tools of their own, and those at the center of that innovation hope their methods will decentralize the consulting world and shift influence away from Washington.

Take NationBuilder, a Los Angeles-based online firm that recently took in millions from a group of well-known tech investors. It was a vote of confidence in the company that was founded by Jim Gilliam, who came to the consulting world after producing several documentaries.

“Fundamentally for our business, we’re building it as a software company,” he explained to C&E recently.

It’s that kind of methodology that’s attracting the likes of Sean Parker, the founder of Napster, Marc Andreessen, the founder of Netscape, and his business partner, Ben Horowitz who together pumped $6.25 million into the firm in March.

“Historically, the folks that have tried to solve [the problem of integrating technology into politics] have approached it as consulting company,” Gilliam said. “They get a few big customers, they put some tech together and they end up sort of creating this Frankenstein monster because you’re getting paid by the hour.”

It’s a different model in the technology-startup world. Typically, you have a high up-front cost, but you offer your product at a low price point so you can get a large number of customers. In the campaign world, this includes people running for mayor, or state legislature or lower-tier congressional candidates as well as national and statewide candidates.

“The price points that they wanted to hit were in the $50 a month range,” Gilliam said. “To do that, you’ve got to put a lot of upfront investment.”

That’s where the money from Parker and Co. came in. Prior to that, NationBuilder, which dubs itself an online toolkit for leaders, had been operating on about $500,000 of startup capital. They had taken on about 300 clients since it made a soft launch about a year ago. For Gilliam, the first year had proved his company was offering a product the market was willing to pay for.

“Our business works really well at a large scale,” he said. “Historically, people have had to have a few hundred, maybe a thousand customers. We will have hundreds of thousands.”

NationBuilder doesn’t give strategic advice. It leaves that to the campaign’s greybeards. Instead, it creates an online presence built around the candidate. It creates ties to social media with petition and donation features, and allows for interaction with supporters. “It helps you bring people together to accomplish something,” he said. And despite coming from a progressive background, Gilliam calls it “aggressively non-partisan.”

That sort of openness, combined with the low cost, is exactly where Gilliam predicts the consulting world is headed as technology exerts a growing influence over campaign politics.

“The platform is for anybody,” he said. “We’re just doing the technology. We’re not telling you how to run your campaign. We’re not doing the strategy stuff. It’s available to everybody.”

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