SaaS provider and consultancy Kuorum supports governments, municipalities and corporations in carrying out their co-creation initiatives with citizens and employees. Founded in Madrid in 2013, Kuorum has pivoted four times, joined many acceleration programs and raised approximately €200,000 in private and public funds. In 2018, the business finally started to take off, generating €230,000 in revenues and the company is now looking to double its revenue in 2020.
Kuorum has fundamentally benefited from a paradigm change that is taking place in the public sector. More than 2bn people representing local governments and civil society organizations have increasingly demonstrated interest in co-creation and citizen participation at all stages. Co-creation processes, which are based on the premises that "those who are affected by a decision have a right to be involved in the decision-making process," are intrinsic to the Sustainable Development Goals' (SDGs) criteria of inclusion and justice, shaping the way public participation can be achieved.
At the regional level, the Spanish Law 39/2015 on administrative procedure will require the digitalization of all auditing process for any local regulations starting from October 2020. Spanish city councils will soon need a tool like Kuorum to enable residents' participation in decision-making processes so as to establish inclusive institutions at all levels.
CompassList interviewed Kuorum CEO and co-founder Matías Nso at the 2019 Smart City Expo World Congress in Barcelona.
This interview has been edited for length and clarity.
How does Kuorum work?
Kuorum is a SaaS for governments and companies that facilitates the launch of citizen engagement webpages in less than a minute, customizing a page for the specific entity to launch polls, petitions, debates, enquiries, participatory budgeting as well as editorials in blog format. Citizens have to create an account to get involved in the process.
The greatest advantage of using Kuorum is that the startup can manage each account from the backend and accounts can therefore be categorized based on user interest and level of engagement. This allows Kuorum to gather relevant data to efficiently segment the user base.
How was the co-founding team formed?
The co-founding team comprises me, Iñaki Domínguez and José María García, engineers with experience in different sectors. We got together six years ago to work on a Tinder-inspired app for the public sector. It started as a game but in less than a week, we had 1,000 registered users. We were then accepted into an acceleration program, so we decided to leave our jobs and dedicate ourselves full-time to this project.
The truth is that our very first idea failed. In all, we started over four times, but we never changed the name of our company. The first project was to create a debate community and that failed. For the second, we launched a tool to create political campaigns, copying a well-established model in the US but we failed again. The third project was about big data analysis for public institutions and it didn’t work out too.
Finally, when we were about to go bankrupt, new regulations were established to seek the input and active collaboration of citizens, creating a concrete demand in the industry. An example of the efforts that are currently undertaken to establish active collaborations and co-creations between public sector and citizens is the Open Government Partnership, an international organization comprising 79 countries with the goal of fostering transparency and citizen engagement on public matters.
What is your business model? How do you monetize?
We monetize through a yearly or monthly SaaS subscription. The pricing depends on the city council's size and the features they want to include in the platform. The basic subscription includes the minimal features that are needed to be compliant with the General Data Protection Regulation (GDPR) on data protection, while the premium subscription includes participatory budgeting, which is one of the most complex features to set up and also one of the most in demand.
How much have you raised to date and who are your investors?
We initially bootstrapped the company with €24,000 from 3Fs. We then joined the Dotforge acceleration program in the UK and it backed us with a further £30,000. After that, we raised €120,000 from an Erasmus Plus European fund and received a €30,000 loan from Net Mentora. We had a moment when we almost went bankrupt, but in January 2018, Spanish angel investor Manuel Matute came in with €40,000, and, with that money, we manage to finalize the platform development and find the right market fit.
Who are your target customers?
We focus mainly on the public sector because it has been our sector of reference over the years; we can capitalize on our expertise in this field where we have developed an extensive network of contacts. Our product is designed for public entities but can be also adapted for corporations. We launched a project with Spanish construction company Sacyr to promote employee participation in discussions to boost innovation at work, and another with Ferrovial, a Spanish transport infrastructure and urban services company, where we helped design a waste collection service by gathering feedback and opinions from citizens.
There are many misconceptions about public entities, especially from VCs
What are the limits, if any, of working with clients in the public sector compared to the private sector?
There are many misconceptions about public entities, especially from VCs. Some of these are true but many others have to be debunked. One misconception is that public entities always pay late. That’s not true – at least, not in Spain; if this happens, the entity will be penalized with an expenditure ceiling. It it also not true that public entities pay badly; they pay quite well actually. Another misconception is that there’s a lot of business uncertainty since the government changes every four years. I have friends in the B2B sector working with companies where the CEO changes every two years… I don’t think they have a better life.
Which markets have you expanded to and where are you looking to expand to next?
Apart from Spain, we have worked with the city councils of Vienna and Manchester. The UK was very appealing for us, but we were stuck for years because of Brexit. We are now eyeing Germany, Austria and Switzerland as they are very interesting markets. We have recently onboarded external collaborators in Colombia, Chile and Mexico. Last October, Colombia held elections, and we are looking into this market as a base from which to start operations in Latin America in the following months.
Which features of the Kuorum platform do your clients use the most?
For clients in the public sector, the participatory budgeting feature is used the most because it’s a way to rapidly grow the user base and that’s mainly due to the economic incentive behind it. We launched a participatory budgeting exercise in Madrid, and managed to gather over 2,000 users in less than two weeks.
Have you considered integrating blockchain technology into Kuorum's platform?
We are currently working with a partner to integrate blockchain technology, specifically for citizen identification, into Kuorum's platform, and aiming to launch this feature in 2020.
We are also looking into using natural language processing (NLP) to filter the initiatives available on the platform and classify them by area of interests. We are working on this in collaboration with the University of Vienna, which has already developed this technology and needs to test it in real use cases. In March, their PhD students will arrive to help us with integrating NLP in our system.
In Spain, even if the word “participation” appears 14 times in our Constitution, real cases have proven that there’s still no real participation
How do you ensure the protection of citizens’ data?
We are GDPR-compliant. We validate each user that subscribes to the platform although users stay anonymous. To give an example, only citizens are allowed to offer input during participatory budgeting. We ensure this by requiring the user's Spanish National Identification document, postal code and birth date, before processing this information through secure networks. The user's information is then sent to the municipality’s server for verification, and if the information is correct, it validates the user's profile.
We never store citizens’ personal data. A SMS confirming the activation of the account is sent once the user is verified. The SMS adds an additional level of security, making sure that the same user does not participate more than once in the same survey or debate. An alternative process to protect citizen data and ensure users do not have more than one account is through blockchain, and that’s why we are now working on integrating the technology into our platform.
What are the biggest challenges Kuorum has faced?
We have faced many, but sales has definitely been the most painful one, mainly because no one in the team has previous experience in it. We overcame this problem by creating a board of advisors with experienced sales professionals. We had great mentors like Jesus Gallo, the founder of Restaurantes.com, who trained us in sales. Thanks to him, I mastered this skill. A second challenge has been finding talents, both in the commercial and technical areas.
Achieving the SDGs require people’s commitment. Based on your experience, which government and municipality is working hardest to foster citizen engagement?
I think that Estonia is a great example as it digitalized its administrative infrastructure long before the citizen participatory culture exploded. It is very hard to stimulate participatory culture if it is not supported by technology. Here in Spain, the situation is slightly different because even if the word “participation” appears 14 times in our Constitution, real cases have proven that there’s still no real participation and we are lagging behind.
