There are a lot of reasons not to like the space that Publicstuff is in. The company sells to local governments, real estate management companies, educational institutions--anyone responsible for public or private infrastructure. That alone is enough to make a lot of VCs throw up a little in their mouths. Slow sales cycles. Joe and Mary Bureaucrat who don't even use the internet because Smalltown, USA blocks it as the decisionmakers. Ugh, right?
Except that its working.
Business Insider wrote about our investment in the company yesterday. So what attracted Howard Morgan, the VC with the hottest hand in NYC as of late (Turntable.fm, Fab.com), to bring the investment back to First Round?
Lily Liu can sell--and she's selling into a huge market.
I'd bet that anyone who looked at this company's early sales traction would have asked her, "Wait... so... how many salespeople do you have? Just you? And what percent of your time have you spent on it?"
What's most astounding is her close rate. She contacted 500 local municipalities in one batch, and had, up until recently, just been working through that initial funnel, closing an significant number of those cities. It was enough to make anyone who didn't love the space realize that she had cracked the code of breaking into government sales--and once you're in, you're in forever. Their product--"311 in a box" if you will--is clearly resonating with entities that can't afford to spend tens of millions of dollars on building the kind of citizen information system that NYC has, which is basically almost every city besides NYC.
There is a lot of talk about needing to be a technical founder. Sure, maybe to get into YCombinator, but, remember, most venture backed companies don't go through YCombinator. If you're not going to build (or design) a product, then you need to be amazing at selling that product (or acquiring customers if you're a SaaS tool). First Round has backed a bunch of great salespeople--Brett Hurt of Bazaarvoice, Wiley Cerilli of SinglePlatform, Chantel Waterbury of chloe + isabel, Sean Black of SalesCrunch, and it's great sales-focused additions to the leadership teams that is driving the success of companies like GetSatisfaction and Monetate.
You can sit in a pitch meeting with an investor demoing your product, and hypothesize as to whether or not there will be a market or even a business model for something, or you can role reverse and "Show them the money". Not everyone's business is a built first, figure out the business later kind of thing like Twitter--and in a world where only 1 out of 100 businesses get funded, figuring out how to sell and generate revenue as early as possible feels like a good strategy--so long as the revenue isn't a distraction from your big vision. I think there's way too much "customer discovery" that involves surveying and not enough that involves check writing and credit cards.
I'm excited that PublicStuff is one of our now 45 NYC area investments. If you're looking to get into the startup world and want to start a career in sales, they've got customers, and a product, and a huge market ripe for the picking.