Since early 2017, Higher Ground Labs has invested aggressively behind the promise of relational organizing tech startups. In 2018, the Analyst Institute study showed that political messages from friends dramatically outperform any and all other modes of political communication – furthering our conviction in relational contact as a core campaign tactic.
Despite this incontrovertible evidence, Democrats have woefully underinvested in relational, especially when compared to mail, television, and digital advertising spend. Our 2018 landscape analysis found that Democrats have invested just 1/25th the amount in relational compared to digital and television delivery technologies, despite relational outperforming digital and television in effectiveness. New political advertising restrictions at platforms like Twitter and Google will only heighten the need for effective, trusted messengers to share political content with friends.
Earlier this year, Higher Ground Labs issued an open-call for relational organizing tech startups to apply for a generous tranche of investment capital. We studied and benchmarked our applicants and are now prepared to make investments in the companies and approaches we are most compelled by.
HGL did an open call for applications to our relational fund and drew interest from current HGL portfolio companies and new applicants. Over the past few months, HGL collected data from our applicants to measure impact and durability. This included the number of campaigns and causes serviced; number of app downloads; number of monthly active users; the number of political messages sent per volunteer; voter file match rates; revenue; headcount; net burn; and much more. We created a series of ratios out of the gathered data to optimize for outcomes we thought most important – mainly, which companies had the most volunteers spending the most time on the platform sending the most messages possible. We followed this work with a series of client interviews, product demos, and interviews with other experts in the field. Finally, we tasked talented engineering and design experts, Irene and Preston Tollinger, as our outside experts to submit a technical report on our finalists.
We are pleased to announce two large follow-on investments into Outvote and Tuesday Company. Both companies serviced an admirable number of campaigns and causes, graded well on UI/UX, and have ambitious product roadmaps for 2020. We are thrilled with the work these companies are currently doing and excited about the teams leading the effort.
We also noted with great pleasure the success of Empower (previously MyRVP). Our inability to engage with Empower was purely structural, as Higher Ground Labs is organized as an LLC and Empower is organized as a 501C4. The revamped UI/UX and organizer-first flows appear very promising and have received rave reviews from non-electoral clients.
All three of these entities approach relational contact by empowering invested volunteers. They work with field, digital or organizing teams to move their offline activists to online messengers. We believe this type of organizing hub is key to building digital first campaigns in 2020 and beyond, and note that this is just one angle of relational contact. There are still opportunities for relational innovation around other campaign activities – such as fundraising, opposition research, etc – that we hope to see flourish in coming years.
We also see the need for further consolidation for survival. Higher Ground Labs does not typically support monopolies or oligopolies, but the current relational market is too competitive and fractured to achieve long-term sustainability. While our investments are not dependent on consolidation, we have been encouraged by the willingness of founders to openly entertain M&A options. We hope to announce more on this subject shortly.