Today, ArchiveSocial announced a $53 million investment from Level Equity. We sat down with ArchiveSocial’s founder and CEO, Anil Chawla, to get his perspective on growing a successful company in the gov tech market.
Note: The parent company of Government Technology, e.Republic, is an early-stage investor in ArchiveSocial through e.Republic Ventures.
One of our investors, Steve Case from the Rise of the Rest Fund, talks about the "Third Wave," which is an entrepreneurial movement focused on the unsexy markets. These markets are critical industries and provide critical services from the standpoint of how society functions. That's exactly what we're seeing here, the government is critical infrastructure to the way that society operates.
But for decades, there has not been much investment in innovation around government. What we're seeing today is startups, entrepreneurs and companies — small and large — recognizing real pain points in government that can be solved with innovation and new technology. We've been fortunate, and I've been fortunate personally, to be an entrepreneur at this time and catch this Third Wave. When you build companies that are successful, that grow, that deliver real value to the customer, that ultimately comes back as revenue and investor returns. Investors have seen that happen with other companies in the space, and our news today is yet another data point that gov tech is a market worth investing in.
You've had significant growth during the last 18 months, doubling your customer base to 2,000 agencies. What were some of the key elements to your growth that other startups and companies in our industry should take note of?
Laser focus. We have been laser-focused on our core value proposition and how to best serve our customers. Even as we reached a thousand customers, it may have been tempting to go off in different directions and get complacent with our core value proposition.
At ArchiveSocial, our core tenet has been to provide the best possible, most comprehensive, most reliable social media archiving service available. This is so critical for our business because we exist in an evolving landscape where social networking platforms change all the time. We made a concerted effort to remain focused on our core value proposition and not get complacent. We've invested in product, we've invested in continuing to educate the market and now, 18 months later, we're at a different stage in our company. We will absolutely continue our primary focus on public records compliance. But we recognize now that we have the capacity, particularly with this investment, to expand our focus and provide other types of value to our customers.
It's important for entrepreneurs and small companies to recognize where you are as a company. Have you really mastered your core focus and have you stayed focused long enough to truly deliver that value proposition? Are you continuing to deliver value to your customers day in and day out? And if you're not, you should remain focused on that. It's not about funding, or anything else but delivering value to your customers.
What role does the venture, strategic partnerships or growth equity play in scaling a company in the gov tech market?
In any company's life cycle there are different stages of the company and we're very fortunate to get to the stage that we are at today in terms of growth and to have the growth potential in front of us. Despite being a company that's been largely organically bootstrapped, we are in a different stage as a company. Growth equity plays a very important role in taking a company like ours to that next phase, giving us the financial backing to be able to make bigger investments in our product and in our focus areas.
It's important for companies to recognize that it's not about funding. It's really about what are you trying to accomplish; where are you going and are you methodical and confident in your approach, and leveraging the appropriate resources available to you. For us at this stage of growth, growth equity is that resource to really help ArchiveSocial to get to that next level of serving our customers.
Timing's everything in the market. Any advice for companies that are on the fence with raising capital or exploring when is the right time to fundraise?
There's no question or secret in the investment community that right now is a great time to raise money based on valuations, available capital and the general public markets. The best advice I have for fellow entrepreneurs is to be really introspective on why you're choosing to raise money and why it's a good idea now. Too many companies raise money because that's just the thing to do. There's a lot of pressure for entrepreneurs and early companies to demonstrate success by raising money.
Raising money in itself is not success; it's a means to support the success you already have. Companies should pay attention to the product-market fit they have and the growth path that they're already on. They should look at money as a way to accelerate success in a confident path rather than as a solution to not having confidence or an actual path forward.
Government is an industry that relies heavily on personal relationships and contact — this can pose a real challenge for early stage startups that are looking at trying to scale. How did you scale your ability to reach and have personal contact with agencies across the country?
It starts with the philosophy, "Treat others as you would like to be treated." That causes all of us at ArchiveSocial to operate as authentic human beings. Whether it's a cold sales call, webinar, or that first onboarding, almost everything we do is remote. By being authentic, you can capture a majority of that human relationship.
Now being in person certainly is ideal because there's nothing that can quite compete with face to face. We do take the opportunities to sponsor conferences and attend them. And it's been important for me personally as the head of the company, from when we started to today, to get to as many conferences as possible. It's also important for my executive team to get in the market to shake hands and talk to agencies. That's gone a long way.
I can't underscore enough the fact that government is a relationship-based market, both between vendor and government agency, but also agency to agency. The most important thing to do as a company is to treat each and every customer as important. Agencies talk to each other, and we've been fortunate that when agencies talk to each other, they're often saying nice things about us because of our approach.
What are the two most important lessons you have learned working with the government?
My most important lesson in government is to treat every agency, large and small, as important. Because every agency and government is critical and it exists for a reason. Every agency plays a role in the fabric of society. When we serviced the Obama administration, we treated our incoming, small town customers as important as the White House. Our approach has been to give everybody the top level of service because the way you treat one agency is how you're treating the whole market.
Second, it's critical to understand the role that government and the people who work in government play in society. It's easy as a vendor to gloss over government and get stuck believing the typical stereotypes around government. What I found is that most of those stereotypes are not true regardless of your political bent. The agencies and the individuals that we work with aren't there just to take a paycheck. They're there for a real reason, and they're solving real problems. Many of them have a social mission to serve the general public and are trying to do the best they can with very limited resources. The moment you recognize that, it changes your approach and how you convey your value proposition to somebody that has limited resources. You must be prepared to show government employees that they can excel in their job and their agencies can excel in their mission by leveraging your product.