#172 My Town AI: ChatGPT Meets SimCity

Josh: Welcome to The Pitch, where startup founders raise millions and listeners can invest. I’m Josh Muccio.

Lisa: And I’m Lisa Muccio. And before we get to the pitch…

Together: We’re doing a LIVE SHOW! 

Josh: Yes, for the first time since COVID. We’re hosting a live recording of The Pitch in Brooklyn on December 4th. We are so back. There will be pitches, your favorite VCs, and a happy hour after the show. Tickets just went on sale, grab yours at pitch.show/live

Lisa: On the show today we have My Town AI, an AI platform for local government.

Josh: They’re raising one million bucks.

Lisa: Nichole is the quintessential pitch founder.

Josh: She's everything we're looking for. 

Lisa: Who better to build this than the mayor pro tem of a 1500 person town who also has a background in tech? 

Josh: Nichole's special, but the business itself gets me really excited because I think this is gonna be huge someday, and I don't think everyone's gonna see how huge this is.

Lisa: Mm-hmm. 

Josh: She's trying to bring AI to small local governments 

Lisa: But I think the temptation is to think that there's no way it gets big enough by only going after small towns. I just don't think that's true. 

Josh: We’ll see if the VCs in the pitch room agree with you. 

Lisa: The Pitch for My Town AI is coming up, after this.

Josh: Lisa and I are currently touring different cities meeting listeners and LPs! We were just in SF, we’ll be in Austin next week and New York the week after… because we’re raising Fund II! You can RSVP to join us at one of those meetups at pitch.show/events

Lisa: [unenthusiastically] yay

[break]

Welcome back to the pitch for My Town AI. Let’s meet the investors.

Charles Hudson with Precursor Ventures
Sometimes a business is what it is, not what you want it to be.

Elizabeth Yin with Hustle Fund

Can I ask you a very direct question?

Jesse Middleton with Flybridge

I am so sick of people that are building stuff for building stuff's sake.

And a new investor to the show, Dawn Dobras with Capital F

Do not grow one more inch until you improve this brand

Jesse: Hello

Nichole: Hello, my name is Nicole. 

Dawn: Hi, Nicole, I'm Dawn. 

Nichole: Hi, Dawn. 

Crosstalk: Hey, Charles. 

Nichole: Charles, nice to meet you. 

Elizabeth: Elizabeth. 

Nichole: Elizabeth. Nice to meet you Nichole.

Jesse: Jesse

Nichole: Nice to meet you. My name is Nichole Sterling. I am the CEO of My Town AI, and also an elected public official. I sit as the mayor pro tem of Nederland, Colorado. 

Dawn: Ooh

Nichole: My Town AI helps local governments access their data, build agentic workflows and also simulate impacts to their environment through what we call our low cost digital twins. So let me take you to my town. 

Charles: Yeah.

Elizabeth: Okay.

Nichole: It's 8:47pm. I am in a city council meeting and we are debating a wildlife evacuation route. The valley is currently filled with smoke from nearby fires. But nobody can remember why an evacuation route to the south was abandoned over five years ago. It's lost in board meeting recordings and institutional memory. It's now 7:15am the next morning. And, the, uh, contractor is trying to figure out where in the code is that one paragraph that says whether or not a family's affordable 480 square foot tiny home needs to sit on a concrete slab or floating piers. Every day that this is delayed, that family's construction loan is also delayed and their costs are increasing. It's now 2:45pm and my town manager is preparing the yearly budget. He strikes out the part-time grants manager position, because the board has deemed that that $30,000 to $40,000 needs to be spent elsewhere. Bloomberg has estimated that $2.2 trillion is locked up in grants simply because local governments, do not have grant writers. With 95% of all towns in the United States considered small towns, meaning they're under 50,000 residents. This is a huge problem. So My Town AI is the civic intelligence platform built for the 95%, but scales to the 5%. We see an opportunity for a seismic shift in how local government operates. And we're gonna help them leapfrog into the future of governance. Can I show you what it looks like? 

Dawn: With that intro, let's go. 

Nichole: All right. 

Jesse: I’d vote for you

Nichole: I'm not running yet. That's, that's-

Charles: 4 more years!

Jesse: Just to be clear for the -

Nichole: Yeah. Just to be clear for the record, I'm-

Dawn: This is not a political-

Elizabeth: Is that your town or is that somewhere else? 

Nichole: This is actually somewhere else. but this is one of the towns that has signed on with us. 

Charles: Cool. 

Nichole: So what I'm gonna show you is this first one, remember that tiny home example? here we are inside My Town AI. Says, I wanna build a tiny home in 94 Alpine Drive. What is the foundation that is required? What we've done that's unique is we've actually pulled in GIS, geospatial information

Charles: Oh, cool

Nichole: And by doing that we can actually get to the parcel level. And it says, Hey, to build a tiny home at 94 Alpine Drive, which is located in the mountain residential zoning district, you will need to adhere to specific foundation requirements. Tiny homes in this area must be built on a permanent foundation. considering the local topography and soil conditions, which are typical of steep mountain areas.

Charles: Yeah. 

Nichole: Which is exactly where this is. 

Charles: Wow. 

Nichole: But wait, there's more. now let's talk about a citizen facing one. Oh my gosh. Do you, do you even understand how many fence questions we get from citizens. 

Dawn: I’ve asked fence questions. 

Nichole: You've asked fence questions, Dawn!

Dawn: I’ve asked fence questions. About my trash enclosure.

Nichole: Watch this. Okay.

Dawn: I, I'm inquiring, 

Nichole: Watch this. Dawn. So how high of a fence can I build at 750 West 5th Street? . At 750 West 5th Street, Nederland, Colorado, you can build a fence up to seven feet in height without requiring a permit. 

Dawn: I did it without a permit. I'm sorry.

Nichole: Oh, no

Jesse: We, we had to ask

Elizabeth: At least you're not in Nederland

Jesse: We, we had to ask how many inches or feet off of the property line it needs to be from your neighbor 

Nichole: Exactly

Jesse: 'cause it's gotta be in your property space. Now there is the whole thing. 

Nichole: We call that a setback. Okay. But now we are going to go back to a staff example. So I told you that story about a wildfire evacuation route.

Elizabeth: Mm-hmm. 

Nichole: I am literally sitting in that meeting a few weeks ago. Nobody could answer it. We are once again trying to create an egress route outta Big Springs neighborhood. We are now going to plan out two routes that have not been considered before. However, I was in the meeting and no one could remember why one of the doe trails was considered unviable. This trail would've connected Doe trail to Magnolia. Can you let me know why the board of trustees decided not to move forward with that option? The Doe Trail option was considered unviable, primarily due to several significant challenges. Firstly, the proposed route would commence at a riparian area and then negotiate a steep slope to access the ridge and establish fuel break on national forest land. This would require substantial mitigation efforts, including the likely construction of a bridge, and then from there identified that it also traversed over private property To be able to have this type of information at your fingertips. I can tell you, in that room, at that meeting, I could feel the trust literally draining out of the room just because we didn't have the answer.

Jesse: Would you use the same system to, could you mitigate this now? Like could you say, is there an alternative place that we should go

Nichole: Yeah

Jesse: And it would have that level of- 

Nichole: Okay, you're going- hold that right there, because that is when we get into our digital twin. 

Jesse: Yeah. 

Nichole: There are three parts of this business. There is just pulling the data together. Then there's the agentic workflows. If I already have your data, then let's build some really cool smart automations to enhance our operations. And then from there, we're gonna use all that data to then build what we call the low cost digital twin. So now let me show you what one of these agentic workflows looks like. And the first being around that Grants Manager. As my staff love to tell me, they said, you know, Nicole, there's all kinds of programs out there where you can find the grants and apply to them, but the hardest part is actually the management of the grant. So here I am in My Town. Here's a grant opportunity. And here we've broken out all the milestones and about right here is a mid program report. And what we're pulling over is actually comments from board recordings, things that a local government already creates, but they're oftentimes stuck in those recordings and we're pulling them out to generate these reports on demand. Last is the digital twin. 

Jesse: Yeah. 

Nichole: There was a connected bike trail system that had sat in local government in our committees for years. And it was just because nobody had the ability to know like, well, how do we connect these bike trails? But if you have GIS information, you can pull activity tracker data together and see where the most populated trails are. And so that's where the digital twin is like, ah, I need to prototype, I need to simulate, I need to ask questions in a virtual way. And so this next one is all around that, this is a real question, we've got five jurisdictions right now ranging in size from 1500 to 76,000 that want just this component built out, which is this. Based off our municipal code and current business makeup, where can we have an additional dispensary in Nederland? They have to have a certain distance from schools, from parks, from churches, from other dispensaries. If somebody were to do this manually…

Jesse: It's like plotting on a map with a compass. 

Nichole: They're plotting on a map, trying to figure out what was the new business that just came in. Oh my gosh, is there another one? You know? Right. 

Elizabeth: Yeah. 

Nichole: And so that's hours, and if not hours of a staff person's time, it is actually thousands of dollars of a consultant's time. Because this is who they're going to hand it off to. 

Dawn: Ah, nice job. 

Nichole: Oh, thank you. 

Charles: How do you onboard a city? 

[cross talk]

Dawn: Go to market

Charles: How do you onboard a city? 

Nichole: Yeah. at this point I have not had to do any outbound. 

Charles: Mm-hmm. 

Nichole: Folks are finding us just like a tech company. Right. That's how I wanted to build it. 

Charles: Oh, I mean, like what, if you wanna get set up, do I like, have to have every, like how do you get all the information?

Dawn: How hard is it?

Nichole: It's all public data. 

Charles: Yeah. 

Elizabeth: But for example, the grants, like what does that connect into and how do you know it applies to this city or not that city or stuff like that? I guess like where, how do you get all these integrations? Like even public data, like are you scraping their website or like, there has to be someone putting in an input. 

Nichole: Yeah. So some of it is being scraped off their website. 'cause you know, we enter into an agreement with them and they're just like, yeah, go for it. We're trying to make it as low lift on their behalf as possible. and grants you start by looking at some of the states. because there's just tried and true ones that they go to every single time. 

Elizabeth: Mm-hmm. 

Nichole: We are going to have to be a little dynamic in this because a lot of that federal funding has been cut off. And so local governments are looking in other directions, but that's also why, on the backend, we're investing from an agentic perspective as well. Right. To help us with the data processing that kind of thing. Our first town, it took us like four weeks onboard. Now we're less than two weeks, and we hope to get that to two days. 

Elizabeth: That's, that's quite fast. 

Nichole: Oh, okay. Good. Yeah.

Dawn: And how much are you charging? Like how do you make money? 

Nichole: What I think is really awesome about this is the smaller of the small towns will buy this. And the reason why is because they're so under-resourced our smallest towns are 300 people and they pay $55 a month. And then it scales up from there. So 1500 people are paying $95 a month, and then from there it could be up to $250 a month depending on, you know, the size of the town 

Jesse: What's the amount of towns that fit in your ICP today? 

Nichole: There's 75,000 towns, townships and special districts. 95% of just local governments are small towns under 50,000. We're really trying to focus on 1000 up to 80,000. especially for this digital twin piece of it. It's an economic development play. Show me the bike paths, show me the additional businesses I can have. Show me where I can have affordable housing. 

Dawn: How did you come up with your pricing structure? I mean, I'll just say my, my initial reaction is that feels really cheap

Nichole: In, for some of the smaller town, and there is an onboarding-

Dawn: I mean, I get it for 300 people. 

Nichole: Yeah. For 300 people

Dawn: But I'm just, 80,000, like-

Nichole: Oh no, 80 thou- yeah. 80,000 would be upwards of that $250 per seat, per month. 

Dawn: And how many seats would, uh, uh, 80,000- 

Nichole: Our little itty bitty towns are like three people. And then up to the big towns, it can be, you know, 20 plus. 

Jesse: And you're charging by the town staff who access, not by like a citizen who is directly-

Elizabeth: The residents

Jesse: But a citizen would have access in your example, or they would be asking a staff member to look it up for you. 

Nichole: That's a different pricing structure. 

Jesse: Okay. 

Nichole: So our towns are asking us to go citizen facing. 

Dawn: Yeah, that's what I was gonna say. 

Nichole: They want the same thing for their citizens. And so that, in Govtech, that's typically between $1 and $3 per citizen per year. And so that's another way that this makes money. 

Elizabeth: Right now, how many towns are you working with? 

Nichole: So we released eight pilots of like, we didn't charge, we just said, hey, free. You guys wanna try it? half of them are now paying and two of them are still going through their pilots. And then the additional two are just kind of figuring out what they wanna do. And then we've got an additional five that want this. 

Dawn: What does that pipeline translate for this year? 

Nichole: It's a $2.2 million pipeline. 'cause, well, those are the ones that are paying. And then we built a pipeline of 40 towns that are like, Hey, can you send me a free trial? And so where we initially had built these environments for them so they could trial it. Like we just, we can't do that anymore. So they get the Nederland instance that they can go in and play around. 

Dawn: So you have pipeline on potentially 2.2 million, which is amazing, congratulations. 

Nichole: Oh, thank you. 

Dawn: Um, how long, like how long would that actually take you? Could you handle that? 

Nichole: Right. Um, yeah, we're, that's what we're trying to work on, especially on the back end, is to get the automations up and going because we’re sort of impressed by how many people were like, yeah, I'm, I'm interested. 

Dawn: It's a good problem. High class problem.

Nichole: Oh, thank you. 

Jesse: Who's the team? Who's the we? 

Nichole: Yeah. So, I'm the CEO, Kavitta's outside. She's my CTO. We actually met through the nonprofit that I started called Women Defining AI. We also have a team of about five engineers, two of them I used to work with at a previous startup. 

Elizabeth: What were you doing prior to becoming a city council member? 

Nichole: I've always been in startups and deep tech. I was in software defined networking before this gig. For about six years. my first AI project was probably 10 years ago 

Dawn: What are you fundraising? 

Nichole: I am currently raising a 1 million pre-seed. We have raised 435,000 up to this point. I'm using it to help scale the sales side of things, but then also our engineering so we can get those automations going on the back end, get these towns onboarded.

Jesse: Had you raised money before the 435 that you've closed? 

Nichole: No. I invested my own money. 

Jesse: Okay. 

Nichole: Um, 50,000. 

Dawn: And do you have terms set on that? 

Nichole: I do. It was a SAFE, it was a 7 million valuation cap and a 20% discount. 

Dawn: What's keeping you up at night?

Nichole: It's crazy to think like, how cool this could be, how big it could be. Sometimes it's scary.

We’ll be right back.

Elizabeth: Who ends up buying this within a city? Like what is that process? 

Nichole: Town managers are typically who we reach out to, town and city managers. However, folks that are in my same role, like an elected official, because I do some speak, a lot of speaking at these, uh, AI conferences and for local government, I'll oftentimes get my counterparts reaching out to me. But it is primarily, the town manager and the rising one, especially for this is an economic development officer. 

Dawn: And is that process easy or hard? 

Nichole: I speak the language, I'm creating the thing that I wish I already had, They get excited because somebody of their own is creating this. 

Charles: Do they have to, do these ever have to go through any like procurement or competitive bid or can you, can you just like, sole source buy this?

Nichole: I’m so glad you asked that. Yes. Not sure if you know this, but local governments, many of them have discretionary budgets up to a certain amount. So like for my small size of a jurisdiction that's up to $10,000 that my town manager can say, alright, we've got money in the budget, we can go ahead and just buy this. typically, you have to go through the RFP if there are competitors

Charles: mm-hmm, yeah 

Nichole: You can sole source this and other people have told me there's nothing quite like this, so this is legitimately a sole source. 

Charles: Wow

Elizabeth: Hmm. 

Jesse: It is.

Elizabeth: I have seen others, but anyway, yeah

Jesse: So I, I was actually gonna say, so I, I, I was racking my brain through your whole pitch. I, they're not doing this yet in the same way, but I have a company in my portfolio that is selling into government, local government, these towns, the same numbers that you're giving, they started from the citizen side. But this is going to be on the roadmap. It is on the roadmap. 

Nichole: The digital twin part?

Jesse: Yeah. I think because of that I probably wouldn't invest in this. if the founder would not consider it a conflict for him, you should talk. 'cause I think there's some work you could do together. 

Nichole: Okay. 

Jesse: He's a, he is a great, I, I spent the whole time you were pitching, being like, do I want to ignore the fact that this could be a conflict, but I think it's a conflict.

Nichole: That's okay. Understood. 

Elizabeth: What do you think your customer acquisition looks like in the future? 

Nichole: I mean. I don't particularly love salespeople, even though I am a salesperson. I would, I love like, a product led, I love folks to be able to sign up for a free trial, see what it's like, and then allow them to say, okay, let's build my system. 

Elizabeth: But I guess even to generate that lead with the city in the first place, like how do you think about getting more leads? 

Nichole: Oh, I see. Um, yeah. I mean, at this point, what I'm doing right now is I'm actually building some automations for lead gen contacting the towns and the cities that I don't have contact with and starting just to create that pipeline. So I'm, I'm currently working on that right now. 

Elizabeth: When did you start this company? 

Nichole: So technically we incorporated last year, June of last year. I had hired, you know, Kavitta, our CTO as a contractor. She pulled together a team within a couple of weeks. And we started to create basically the MVP, , ran outta money, and they stuck around, uh, surprisingly. And then got my first check fundraising in, in February, onboarded our first towns in, I wanna say like end of March, April. 

Dawn: Okay, so I'm gonna, I'll jump in. I'm interested in doing due-diligence here. Some of the things that I find really interesting is the pull on the customer side. I think you're fantastic. I think you, put you on stage and let her go. 

Nichole: Okay. 

Dawn: What I don't know is I don't know the competitive space and I don't know the pricing space. I'm in for due diligence and our target check size we look at between 5 and 7% ownership. So we'd have to look at the deal structure there. 

Nichole: Okay. 

Elizabeth: What do you think your burn rate will go up to after this round? And I guess you had talked a little bit about what you wanna achieve being a lot more on the product side. Are you gonna put any towards lead gen, customer acquisition, stuff like that? 

Nichole: Yes. Because I would like the help. I don't like to have to create the automations all on my own. I would, absolutely love some help on that side. So right now our burn is about $39,996. We're hoping to keep it around like an additional 20 to 30,000. So anywhere between 60 and 70 K in burn. 

Elizabeth: And you know, obviously things are always dynamic, but if everything were to go to plan, which it never does. But what are you hoping to achieve? Like just from a milestone perspective with this round?

Nichole: I would love to get up to that 350,000 ARR. And be positioning ourselves for a more formal seed round 

Dawn: And how long do you think that'll take? 

Nichole: I'm hoping, about a year from now. 

Elizabeth: I will just be very like, direct thoughts here because I think one of the things I'm grappling with is, like the, the burn rate numbers that you're talking about make total sense. But I think at the next round, people will want to see more. As far as revenue goes. I think that the bar to raise 2 to 3 million is going to be higher than that. But part of this I get is that, you know, the price point is low. And so even if you're getting a lot of cities, you're not getting up to that level. So this is where I feel like there's this puzzle that needs to kind of be solved around the fundraising, the revenue, and I, I, I'm not quite sure how to solve that. 

Nichole: Gotcha. So your feedback would be that we need to raise more revenue in order to hit that 2-3 million seed round.

Elizabeth: Yeah.

Nichole: And how, by how much would you suggest?

Elizabeth: This is, you know, it's always hard to pinpoint. But I would say at least half a million revenue run rate, if not more. I think some of it has to do with like, growth trajectory and, you know, all this other stuff. But, um yeah. 

Nichole: That doesn't scare me either. I mean, 350 is a number that I've sort of, you know, like you said, what's the puzzle to piece together? 

Jesse: How, how many towns is 350 roughly? 

Nichole: Ballpark is about a hundred, a hundred towns, Right now we're at eight. 

Jesse: Yeah. 

Nichole: 13. 

Elizabeth: Mm-hmm. Mm-hmm. Not all paying though, right. 

Jesse: Four are paying

Nichole: Four are paying, and an additional five, nine will be paying in the next month.

Elizabeth: Mm-hmm. 

Charles: How hard would it be to get the sub 5,000 people towns to be basically self-serve? 

Nichole: That's what we're working toward. 

Charles: Yeah. 

Nichole: We don't want 

Charles: Yeah, it doesn't work. It doesn't work otherwise, right? 

Elizabeth: No 

Nichole: and not even sub 5,000, sub 10,000, honestly. 

Charles: Yeah.

Nichole: Um, they know where the data is. They can point to it. Why not make a majority of it self-serve? 

Charles: So I think I would be in for 25, but I have a bunch of questions that will have to get resolved in due diligence. It's mostly around, um, this is like something Elizabeth said, like, kind of like, helped crystallize it for me. I think this business works well if your marketing presence and energy is focused on getting the towns that are worth your time, but you've gotta have a different engine that's probably more like a marketing engine that gets all of these towns that are below the line for you such that you can pick them up with less effort. And I don't know how you get to the revenue number that you probably need without at least getting the beginnings of that marketing engine self-serve for the small, I'm, I'm quite confident anybody you meet who's of a sizable town, you will close them because you're very thoughtful and you know the customer. I would just hate to see you on the phone or even in your inbox talking to these like little tiny towns

Nichole: Right 

Charles: I think there's like a temptation to do that 'cause they're gonna wanna talk to you 'cause you're the expert

Jesse: And they're gonna close. 

Charles: And they'll close.

Elizabeth: They’re gonna close

Jesse: They're, they're, they're, to your point, they have that need that's, they don't have any people. So, and so they're like, they're gonna be the ones that are like, yeah, I'll sign. 

Nichole: You know what, something I forgot to mention. The data piece, folks coming on, is that per month, per seat.

Charles: Yeah. 

Nichole: And then we have the citizen facing, but when we talk about like the grants manager and stuff, that's actually additional revenue on top of it. So where we've priced that out, that grants sort of automation is $500 a month. Um, even small towns. So 

Charles: You don't need to get many grants for that to pay for itself. 

Nichole: Exactly. even 1500 people can wrap their head around that. 

Charles: Mm-hmm. 

Nichole: Versus 30,000 

Jesse: Yeah. 

Nichole: Of a price tag. 

Jesse: Your, your growth hack's gonna be the grant applications. Just apply for a grant for this problem, immediately get that grant, and pay for itself.

Nichole: Yeah.

Jesse: The, um, the I, no, 'cause when you were saying the numbers, I was even thinking without these numbers, I was doing the math. Like on your target towns you're talking about. It was only 50 towns to get to roughly a half a million in revenue, not a hundred even. And that's without your grant stuff

Nichole: Yeah, that’s without the grants

Jesse: I started doing that math. Right. Eight, four to eight seats, $125 a month per seat, roughly. And that, that was your example in that 10,000, 50. But I agree, if you're getting $55 a month, one seat. 

Elizabeth: Mm-hmm. 

Jesse: And no grant writing.

Nichole: Right. 

Jesse: You would need 300. You know, so like it's, uh, it is a lot 

Nichole: And, you know, and, and, an advanced an, analytics package or something like this digital twin piece full transparency we're still trying to like figure out 

Charles: Yeah. Of course

Elizabeth: Sure

Nichole: Exactly how to price. And some of these automations, there's another automation in my head that I was sitting literally in a meeting, we were debating changing one word in municipal code. And I asked my town, I was like, hey, if we change this one word…

Charles: What happens? 

Nichole: What happens to other parts? And it said, Hey, you'd have to be careful of here, here, here. And I was like, oh my gosh. Everyone just stop. We're not making any decisions.

Jesse: No one breathe

Nichole: No one say anything. Um, and so it's, it's, those use cases just come out. And those are additional ways, you know, nobody is hiring policy analysts, but they'll pay 3 to $500 for that automation. 

Elizabeth: Mm-hmm. 

Dawn: I think there's a lot more pricing power than you are talking about right now.

Nichole: Yeah. 

Dawn: And I don't even think you've scratched the surface on use cases. 

Nichole: Yeah. 

Elizabeth: I think where I'm landing, and this kind of ties in with my comment. The struggle is, you are awesome and I absolutely can see this vision and it's a real need. I think I'm still struggling with sort of, I call it the money puzzle of getting your revenue high enough, making all of that work plus, being able to raise the next round and all this stuff. So I think unfortunately I'm gonna be out. Thank you. 

Jesse: Yeah, thank you. 

Dawn: You're awesome. 

Nichole: No problem. Thank you. 

Jesse: Thank you. 

Elizabeth: Thank you

Nichole: Appreciate it. 

Lisa: Yay.

[applause]

Jesse: I wanna clap for this

Josh: Last pitch of the day. 

Jesse: That was a good last pitch. 

Dawn: That was a good one. That was a great one. 

Jesse: That was a good last pitch. 

Dawn: She's really strong. 

Elizabeth: Yeah. 

Josh: Yeah. I was, in like, thinking about this deal. I'm curious what you guys think. Like I thought, okay, everybody else that's trying to tackle this AI in government is likely going after the big cities first. And I thought, wherever that money's going, I wonder, like, is there an opportunity for her to just take everyone else. 

Jesse: That's not what I've seen, to be clear. So

Josh: No?

Jesse: I've looked at three. We actually have two. I just forgot. We have two companies in our pre-seed fund portfolios with the same name going after Govtech. 

Josh: Wait what?

Jesse: Um, so like, it's, uh, anyway, it's a whole thing. Uh, they, they wound up at the same place, but no, I actually think that people are recognizing the fact, like, the big cities are not where you wanna start to sell. I mean, that's really hard. So the, the company Force Metrics that we backed, like they started with smaller police forces. Like, they've grown right, now they sell the massive ones, but I think her approach is right, and I actually think people that are starting out trying to sell, you know, Los Angeles or New York or Miami, pick a big market. It's a crazy uphill battle. There's so much politics, like it's

Josh: Yeah

Jesse: There's 20 people that want to just put their name on the fact that this thing's coming in before you even got to a place of approval. So I think her approach is right, and I think it's actually most people are recognizing that. The challenge in that is these are still very low tech, slow moving, especially in the smaller town. Like they're using chat GPT personally, probably. You know, people are using it, but they're, they're not sort of ready to replace whatever else they're doing. You know, this could take jobs potentially, right? It may not, because there's actually not enough resources that can answer all the fencing questions. But like, that's the fear, right? There's still that fear and so I think there's, it's a double-edged sword, but I, I think the approach is right. 

Josh: As you were talking, Charles, just about the, the strategies with her, I was psyched because I thought, man, if I'm investing in this. And Charles is advising this founder, she's gonna have an edge.

Charles: She has to do all the work. For all I know, my ideas are terrible. All I can do is ask her good questions. And to Elizabeth’s point. I know the things that like, I was, I was very close to saying no. And in the end I was like, I think the process of getting to know how she's thinking about some of the questions I have will inform whether this is someone I want to work with or not. And I was like 51-49, and I was like, I'm gonna say yes because I think I'm gonna like the answers, but it's not like an obvious, I'm a hundred percent sure I'm gonna like all the answers. 

Josh: Huh. And what questions are you gonna ask, Dawn? 

Dawn: I need to get smart on the space, but I like her a lot and I like her profile. You can put her on stage and she can sell this like nobody's business. she's mature, she's been around for a while. Maybe a first time founder, but someone who really understands the space. So that's the type of founder I really like to work with. She seemed open and receptive to feedback, but still had a backbone and was really strong. It's really early. Right. There's a lot to figure out. Like I'm listening to everything you're saying. Of course. Like, $300,000 isn't enough to do the next round. Like there's a lot of issues there, but she seems like the type of person that could handle those challenges. 

Josh: And Elizabeth, you just didn't get the sense that she's moving fast enough in her plan, or is it something else? 

Elizabeth: Well, I think we very, we at Hustle Fund. We very much love people who are extremely customer acquisition centric. She did say some things, but I felt like I really had to tease it out of her, like what I, here's an ideal answer I would've loved for her to have said. Was out of the gates, said, with this next round of funding, we are going to programmatically cold email X number of cities in the US and like this is kind of the automations we built for that, et cetera, like, but instead I heard we are going to build, you know, this back in the, and I get it, you gotta build tech too. But I didn't really hear that many customer acquisition centric answers until I really pulled at that. 

Josh: Got it. 

Elizabeth: Yeah

Josh: The end. 

Jesse: The end

Elizabeth: The end 

Josh: Day two. Thank you guys. 

Charles: You got it.

Nichole walked out of the pitch room with interest from Dawn and a 25k commitment from Charles. The diligence town hall, after this.

Break

Welcome back. Immediately after this pitch – so immediate that our producer was an hour off the red eye home when it happened – Dawn and Nichole got on a call. And then, as quickly as she diligenced, she passed. Because, quote, “despite our strong affinity for you and your founding team, this is too outside our core investing expertise to move forward.”

Now Charles on the other hand, took a couple weeks…

Charles: Nichole. 

Nichole: Hi Charles. How are you? 

Charles: I'm good. It's been a little bit of a bonkers morning already, but such is life. 

Nichole: Well, uh, looking at your schedule, trying to schedule something, it's been a bonkers couple of weeks. 

Charles: It's a lot. It's a lot, but, you know, we'll, we'll get there. We'll get there.

Nichole: Yeah.

Charles: How, how have things been since The Pitch? 

Nichole: My goodness. We're onboarding another two towns. I've got pilot going for our digital twin. Basically towns are asking me to create the software. Uh, do you ever ever recall the SimCity? 

Charles: Oh, do you know how much of my youth I wasted playing SimCity? It's always in my mind. Remember when the earthquake would happen in your whole town would- 

Nichole: Yes. So I've had that request and that's always sort of been my main like, oh my gosh, what if, kind of a thing. And now that customers are starting to say, Hey, could you like design something so that I could design my park? And I'm just like, you guys are helping me live my childhood dream. So it's been fun. 

Charles: Wow. 

Nichole: Yeah.

Charles: I mean, I guess for me, like a couple things I really wanted to make sure I understood were just how you think about deal size, growing over time.

Nichole: Deal size, growing over time is a, you know, these five jurisdictions that are asking me to all create this one thing, this one thing of where can I have X? That in my mind is sort of the ongoing growth of the product and like these more advanced solutions that we can continue to productize. So I see deal size increasing over time just because of the ability to access more and better information from the data that we're already sitting on.

Charles: Yeah. How do we scale you, since you are like such a unique asset for the company? 

Nichole: Yeah, we've been really kind of thinking hard about sort of this in-app experience of like, how do you create the viral loops? Because what, what people send me is, oh, cool, look what I was able to do, and now I wanna be able to replicate that and have them send that out to other people to sort of pull folks into the app and so that's how I would like to scale myself. 

Charles: Okay. Is there an upper limit on city complexity or city size you could support today? 

Nichole: No. In fact, our pilot that we're going in with the largest town is 145,000 people. So we're already trending in that area. 

Charles: And where are you in terms of putting together the round? 

Nichole: So I have about 565 left. 

Charles: Okay. 

Nichole: And I'm just in the process of just talking with other investors at this point. Everyone asks me what’s my timeline and I was just like.

Charles: You’re like, as soon as possible 

Nichole: Whoever's first. I don't know how to answer that. Like I can put a timeline on you all, but you also have your own timeline, So

Charles: Yeah. 

Nichole: I dunno. 

Charles: Well, what questions do you have for me? 

Nichole: How are, I mean, you all are making active investments and

Charles: Yeah. 

Nichole: All of that. How, what's the process look like for you? 

Charles: I will send you like a preliminary due diligence form. I'll send it to you actually, maybe just in the name of not getting distracted by whatever comes next. Since I have you here now, I'll send it to you. It's mostly company hygiene stuff. Like who owns what, company's not getting sued, right. There's like not some mystery co-founder who absconded with 50% of the ownership, that kind of stuff. 

Nichole: Nope. We're all here. 

Charles: Yeah, it's that kind of thing. It's that kind of thing. 

Nichole: Excellent. Okay. And then from there, like the entire process, you guys, it's a few weeks

Charles: It's pretty straightforward. It's a couple weeks. Yeah, it's pretty, pretty straightforward.

Josh: That was a delightful call. 

Lisa: Yes. 

Josh: I mean, I've been waiting for SimCity to show up on this show. 

Lisa: I played SimCity but never understood how to play SimCity, but Rollercoaster Tycoon, 

Josh: So fun. I was very good at that. 

Lisa: Yeah, that's my jam. 

Lisa: So Charles, is he investing in Nicole? 

Josh: That's a great question. He followed up, he sent the email on the call. Nicole's going through the diligence process. She filled out all the forms, background check. We'll see what happens there. As far as The Pitch Fund, what are we doing? 

Lisa: We are waiting on Charles to finish his diligence. 

Josh: Yes, we are. So we'll also close the loop on that in the finale. 

Lisa: I'm hopeful. I think this is a super interesting company. I would love to invest in Nichole. I think what got us excited about this deal originally was we had just finished doing our diligence on Lockstop and so had talked to the Parks and Rec department in like Rogers, Arkansas, right? and so I feel like we understood a little bit about like those small town local government dynamics and discretionary budgets and that they have the cash to spend on this, you know?

Josh: As long as it’s below a certain dollar amount.

Lisa: As long as it’s under a certain dollar amount, right.

Lisa: So a lot of the things that we learned during the diligence on Lockstop I felt like really applied here and helped us see like why this is a good company. 

Josh: Yeah. Love those discretionary budgets. 

Lisa: I’m always saying this

No offer to invest in My Town AI is being made to the listening audience on today’s show. But you can become an LP in our fund. Fund I is closed, but in Q1 of next year, we’re doing our first close on Fund II. To learn more, check out our brand new website for the fund at thepitch.fund

Next week on The Pitch…two Slovakian swimmers building… electric construction equipment

Patrik: I picked up the phone, I called Adam and I said, Hey, I got this opportunity and I think this might be the next Tesla of this industry. Are you in? 

Adam: I almost yelled. I was like, yes, of course, I, I'm in, I'm in. And uh, within the week I was on the plane to Slovakia. And that's uh, where our business journey started.

That’s next week! Subscribe to The Pitch on your favorite podcast player so you don’t miss future episodes. You can watch full length versions of every pitch over on our Patreon at The Pitch Uncut.

And if you’re a founder and you want to be on season 15 of our show, apply now at pitch.show/apply

We’ll see you next Wednesday, in the PITCH ROOM.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, and Enoch Kim. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Music in this episode is by Breakmaster Cylinder, The Muse Maker, The Firmware Rebels, Dame Asu, David Swensen, Soul City, Greg Jong, and Peter Jean & The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.