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The evolving startup landscape post-2020

Four weeks into 2021, we are seeing big, exciting changes in our portfolio. We anticipated many of these shifts following the 2020 cycle – the political industry is cyclical. There are predictable peaks every two years where our companies are called to the forefront of our space to perform at the highest level. These seasons are a testing ground for the platforms our founders have worked so hard to build. After each cycle, there is a natural reshuffling as users reflect and share their experience and company leadership refine their models. This unique period gives us as investors a rare window into our portfolio. 

Here are four big trends to watch in existing political tech companies in 2021:

We have seen more acquisition activity in the past few months than most of our history combined. So far, three have been publicly announced – Mobilize, FactSquared and Outreach Circle – and there are others on the way. This is a logical time for political tech companies to find homes in larger entities in the space and we are proud to have supported all three in their journeys. In these cases, consolidation leads to better integration, clearer UX priorities, and greater impact.

Companies looking to build on their success in 2020 are currently refining – in some cases pivoting – their roadmaps to better reflect the needs they witnessed through their clients. For many, that means adding features that were previously parallel to their work to provide a better experience for the end user. These changes have come from deep partnership with and feedback from 2020 partners – an example of the type of collaborative development we encourage throughout HGL. 

Many of the companies in our portfolio were small startups heading into 2020. After proving their model, they have emerged stronger companies. Many of them are currently making senior hires that will help steer their company into the next cycle and beyond. Politics suffers from severe talent drain. We send our very best and brightest back into other sectors the day after Election Day. On the contrary, these new hires give technologists the opportunity to stay involved in reforming our democracy while sustaining the technical infrastructure we worked hard to build. Check out our jobs board for open opportunities. 

FAILING FAST (with style, of course):
And finally, some of the companies in our portfolio will close up shop in the months to come. That is a good thing. As investors, we want entrepreneurs to come to us and try new things. We make investments early to give people space to run at a good idea. 75% of start-ups fail in their first two years as businesses*. This is not a political thing – this is a start up thing. We need to celebrate quick failures and learn from them – contrary to our nature in politics.  Quick failure is part of building a healthy industry and, as investors, we are here for it. 

We are learning from the journey of each of our companies right now and doing the best we can to support our founders. If you worked with an HGL company in 2020, please touch base with them. Share your feedback. Learn more about their future. Make sure you know where they might fit in your next steps, too. We are here to build and learn alongside you as our space continues to evolve.

*According to Shikhar Ghosh, a senior lecturer at Harvard Business School as found published here.