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The Pitch

#172 My Town AI: ChatGPT Meets SimCity

43 min episode · 2 min read
·

Episode

43 min

Read time

2 min

Topics

Investing, Fundraising & VC, Leadership

AI-Generated Summary

Key Takeaways

  • Discretionary budget strategy: Small towns have purchasing authority up to $10,000 without RFP processes, enabling sole-source procurement. This creates faster sales cycles than large city contracts requiring competitive bidding and multiple stakeholder approvals across departments.
  • Pricing architecture scales three ways: Base platform charges $55-250 monthly per seat based on town size. Add-on modules like grants management cost $500 monthly. Citizen-facing features price at $1-3 per resident annually, creating multiple revenue streams from single customers.
  • Onboarding velocity as competitive moat: Initial town onboarding took four weeks, now reduced to under two weeks with target of two days. Automation of data ingestion from municipal websites and GIS systems removes manual setup burden and enables self-service for sub-10,000 population towns.
  • Revenue milestones misaligned with fundraising: Investors expect $500K annual run rate minimum for $2-3M seed rounds. At current $95-250 monthly pricing, this requires 50-100 paying towns. Four currently paying customers create significant gap requiring aggressive customer acquisition automation and marketing engine.

What It Covers

Nicole Sterling pitches My Town AI, an AI platform serving local governments under 50,000 residents. She seeks $1M pre-seed funding at $7M valuation, having raised $435K and onboarded eight pilot towns at $55-250 monthly pricing.

Key Questions Answered

  • Discretionary budget strategy: Small towns have purchasing authority up to $10,000 without RFP processes, enabling sole-source procurement. This creates faster sales cycles than large city contracts requiring competitive bidding and multiple stakeholder approvals across departments.
  • Pricing architecture scales three ways: Base platform charges $55-250 monthly per seat based on town size. Add-on modules like grants management cost $500 monthly. Citizen-facing features price at $1-3 per resident annually, creating multiple revenue streams from single customers.
  • Onboarding velocity as competitive moat: Initial town onboarding took four weeks, now reduced to under two weeks with target of two days. Automation of data ingestion from municipal websites and GIS systems removes manual setup burden and enables self-service for sub-10,000 population towns.
  • Revenue milestones misaligned with fundraising: Investors expect $500K annual run rate minimum for $2-3M seed rounds. At current $95-250 monthly pricing, this requires 50-100 paying towns. Four currently paying customers create significant gap requiring aggressive customer acquisition automation and marketing engine.

Notable Moment

During a wildfire evacuation debate, Nicole's town council couldn't recall why a specific trail route was rejected five years prior. Her AI instantly surfaced the answer from archived meeting recordings, revealing topography issues and private property conflicts that would have required bridge construction.

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Episode Transcript

Welcome to The Pitch, where startup founders raise millions and listeners can invest. I'm Josh Muccio. And I'm Lisa Muccio. And before we get to the pitch We're doing a live show. Yes. For the first time since COVID, we're hosting a live recording of the pitch in Brooklyn on December 4. 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. On the show today, we have My Town AI, an AI platform for local government. They're raising $1,000,000. Nicole is the quintessential pitch founder. She's everything we're looking for. Who better to build this than the mayor pro temp of a 1,500 person town who also has a background in tech? Nicole'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. Mhmm. She's trying to bring AI to small local governments. But I think the temptation is to think that there's no way it gets big enough by only going after the small towns. I just don't think that's true. We'll see if the VCs in the pitch room agree with you. The pitch for My Town AI is coming up after this. Lisa and I, we're gonna be 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 too. You can RSVP to join us at one of those meetups at pitch.show/events. Yay. It's true that some things change as we get older. But if you're a woman over 40 and you're dealing with insomnia, brain fog, moodiness, and weight gain, you don't have to accept it as just another part of aging. And with Mitty Health, you can get help and stop pushing through it alone. The experts at Mitty understand that all these symptoms can be connected to the hormonal changes that happen around menopause. And Middi can help you feel more like yourself again. Many healthcare providers aren't trained to treat or even recognize menopause symptoms. Middi clinicians are menopause experts. They're dedicated to providing safe, effective, FDA approved solutions for dozens of hormonal symptoms, not just hot flashes. Most importantly, they're covered by insurance. Ninety one percent of Middie patients get relief from symptoms within just two months. You deserve to feel great. Book your virtual visit today at joinmidi.com. That's joinmidi.com. Welcome back to the pitch for My Town AI. Let's meet the investors. Charles Hudson with Precursor Ventures. Sometimes the 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'm so sick of people that are building stuff for building stuff's sake. And a new investor to the show, Dawn Dobris with capital F. Do not …

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