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Thursday, July 31, 2014

Tech Talk: Engaging Local Residents Through Government Apps With CitizenSync

Posted By on Thu, Jul 31, 2014 at 9:25 AM

Tech Talk is a weekly series that explores the people behind startup companies in the Cleveland area.

Zac Sebo is no stranger to hard work. Shortly after completing his bachelor’s degree in sport sciences and management at Ohio University, he went on to co-found two companies — KegFLY, a daily deal website for college students, and CollegeVolt, a marketing agency for startups — before becoming Vice President of Operations at Campus Shift, an online marketplace to buy and sell textbooks. After little more than a year, though, his entrepreneurial spirit got the best of him, and he left the position along with two co-workers to pursue his most ambitious work yet: a common mobile app platform for city governments.

The government, more often than not, is far from the cutting edge when it comes to technology. Sebo aims to change that. His company, CitizenSync, creates and maintains custom mobile applications for local government, which integrate proximal information like nearby businesses and upcoming events plus historical data, maps, forms, and tools.

Since CitizenSync’s founding in 2013, three cities — Oberlin, Granville, and Fairlawn — have contracted the startup to maintain an “official” app for those respective cities. Sebo credits the momentum to CitizenSync’s two-prong approach: the government appreciates the technical expertise which it oft times lacks, and local businesses are eager to attract more eyeballs. Advertising is a big part of CitizenSync’s revenue strategy — the company charges advertisers a monthly fee, ranging in the case of Oberlin from $49.99 for 1 self-serve ad to $249.99 for 10. The model’s been working thus far — CitizenSync plans to launch a redesign of its apps and is in talks begin serving a new city, Strongsville, soon.

To learn more about the founding of CitizenSync and Sebo’s plans for his business’s future, I sat down for a discussion with him and CitizenSync’s two other co-founders, Chris Haynes and Darren Mills.

How did you get your start?

Sebo: So we were showcasing this college app at the JumpStart Expo a few years back. The mayor of Hudson at the time came up to us and said, “I heard about this app. I want to see what it does.” We showed it to him and he was like, “Wow, this is really interesting.” He came up to Chris and asked if we could build an app like it for his city. And so that’s when the lightbulb kind of went off. A few months later, the three of us ended up leaving that other company for personal reasons, and we started CitizenSync.

The idea was almost planted by the mayor of Hudson. He wanted us to connect all the information about the city in one place, and we thought there was a need for this in terms of citizen engagement.

If I understand correctly, only part of your revenue comes from cities that contract you. You also charge businesses to advertise within city apps, right?

Sebo: There are two revenue streams. Basically what’s happening is, we approach the city and we let them know about this opportunity that they can take advantage of to improve community development and citizen engagement within their city — not saying that it’s bad, but it just gives them the ability to make it stronger. So if the city’s interested, and they feel like they can’t do this on their own — i.e., design, develop, and staff people to run this application — that’s where CitizenSync comes in. We provide a solution for the city.

We bill the city, and then we also can allow businesses to place in-app promotions in the official app of their city. At the end of the day, what we’re doing is empowering the city to capitalize on the local mobile marketplace within their backyard.

The best way I can sum it up is, our apps are a communication tool for the city, official marketing and advertising tools for all of the businesses within the city, and also a discovery tool for all of the residents and visitors in the area, who can use the app to find hyperlocal information. It really is connecting a few different components all in one place.

Haynes: Also when we do it, we don’t just partner with the city. With Oberlin, it was a collaboration project between the city, the college, and their business partnership. With Granville, it’s going to be the village of Granville, Dennison University, and their Chamber of Commerce. With Fairlawn, it’s the Chamber and the city, so we’re collaborating with all the relevant entities.

Sebo: we’re approaching the city first, because most likely the city has the most eyeballs, they have a lot of trust in most cases among their constituents. If we can get the backing or support of the city, it in turns makes our job easier when promoting the application with them to their community. It also opens the door to additional entities that want to support it financially and just to make sure people know about it.

Who’s funding CitizenSync? Was it difficult to find investors?

Sebo: Most of our funding is coming from one angel investor right now, and we’re actually gearing up to put together a second follow-on round.

We haven’t had much difficulty thus far. Before we ended up landing our first round with our investor, we had probably had only met with three or four other people beforehand. It wasn’t as hard as some people may think, at least for a first-style round.

Haynes: I think our experience from our previous work helped. We had won the Ohio innovation award with that company, so we already had a well-established network.

Sebo: We all have done other things before this, so I think we’ve been able to see it from another perspective before trying to go at it for the first time — we understood how to approach it. We are aware that there are things within the Cleveland area that people are having difficulty with. I could take this idea out to California right now, and not have much traction, and get a $5 million investment, whereas here you need to have a $1 million in sales, a hundred thousand users, it’s just more proof of concept.

Haynes: People in Cleveland… demand a little bit more from you

Sebo: One of the investors that we almost were working with, part of his team was like, “I can’t touch the software, it’s not a physical product.” It’s kind of hard to get people to that understanding.

Haynes: There’s a lot of old money here in Cleveland, so it’s just them getting used to tech, really. It’s getting better.

Sebo: Everyone wants innovation but hates change.

Why base your operations in Cleveland? Is there a decent pool of talent here?

Haynes: There’s definitely talent, that’s for sure. There are so many universities in the area.

Mills: Cleveland was recently named seventh in the nation in terms of talent for tech, which surprised me. I don’t think we ever sat down and said we should leave — we’ve known Cleveland is where we were going to do this.

Haynes: We’re all from the area, for one.

Mills: When you come around that turn on 71 and you see the skyline every time, that’s home.

Sebo: There’s a resurgence happening in the city. There are a lot of young people staying here, there are people that are young that are moving here, and that in turn relates to building more infrastructure to house more jobs and companies. Companies are moving here - big tech companies are bringing their offices here.

Haynes: It’s also cheaper to run your business here because office space is more affordable. You can pay a developer 50 grand who in California would be demanding a six-figure salary.

Sebo: Back to my point, we want to be a part of that renaissance, because we’ve seen what Cleveland has gone through to a certain extent. We want people to see CitizenSync as that huge awesome company from Cleveland.

How are things progressing? Are you continuing to see interest from cities?

Sebo: We’ve met with about forty different cities since January of this year, and out of those forty, I’d say about 65 to 70 percent of them have actually expressed interest in working with us. Some of them just have budget restrictions or they have other priorities that are taking precedent, so the ones that we brought on right now just make sense at this time. Later on down the road, when cities start to redo their budgets and incorporate us into the equation, they’ll actually be able to come on.

What’s the future of CitizenSync?

Haynes: Phase 2 is, if we can sign 10 to 15 cities in northern Ohio, our goal is to then create a CitizenSync app. The same way you have your weather app on your phone based on location is what is shows you, we would build that app. So every city would have their own app, but we would pull in all the local offers and events from each app into just the main CitizenSync app, so that no matter where you are in Northeast Ohio, you’re always connected.

Sebo: After we get Ohio down, it’s just basically copying and pasting to other areas. It’s really fun what we’re doing — we really enjoy contributing to the entrepreneurial scene in Cleveland. We hope that people not only like what we’re doing, but we also hope that we can be an example for other potential aspiring entrepreneurs who maybe have some doubt about starting a company. So I think we enjoy, overall at the end of the day, working for ourselves and helping to solve problems. Hopefully the young college students that we go speak to in Mentor occasionally can take something away from us.

Mills: To our generation, it’s pretty obvious that if cities were to fully embrace technology, there’s a lot that could be improved

Sebo: A lot of people who work in government tend to be a generation behind. We’re hoping that we can bridge that gap — at the end of the day, it’s not just selling cities on what we can do for them, it’s educating them about why we’re willing to help and how we do it.

Mills: The city officials tend to ask us where on the trend line they’re falling — are they an earlier adopter, or are there people already doing it? I like that question, because it means they know it’s coming. They’re not asking if it’s a product they need, because they know they need it.

Sebo: It’s more or less like, we’re telling the city, “Hey, we’re giving you an opportunity to be a forward thinker in your region. This is your opportunity to set the standard instead of being a follower.”

Haynes: And ultimately, we were just tired of opening our phone’s Friday night and wondering what we were going to do tonight. We wondered why an app like that hadn’t been made yet, so we just decided to give it a try.

Sebo: Honestly, we’re doing a lot of this on the fly. When it comes to engaging government and local municipalities, there’s no rulebook on how to do that, especially when you’re trying to implement technology. So it’s really fun and interesting to see how we’re applying our previous knowledge to stuff that’s kind of the “unknown unknown.”

People ask me if I’m ever going to get my master’s degree in business, and I say no because, what are they going to teach me in that classroom that I can’t learn on my own? What I really like about Cleveland is that, all of the entrepreneurs and accelerators and incubators want to try and open up their doors, and I think you have the opportunity to get a little more attention here than you would out West, because there’s so much more action happening.

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