Bridging the Gap: How CivicReach is Revolutionizing Government Customer Service

Founder Shares – Chip Kennedy

00:00:02 – Chip Kennedy

You hear this a lot either because you’re a non technical founder or you’re a technical founder. And I think it’s malicious in that it buckets people into roles that don’t make sense anymore, especially with AI. But even well before that, technology is accessible to those who want to put the work in to understand it. And if you can understand how to use technology as a tool to create a solution to some problem, you’re an entrepreneur. Hello and welcome.

00:00:31 – Trevor Schmidt

Welcome to the Founder Shares Podcast, brought to you by Hutchison, a law firm in Raleigh, North Carolina that helps founders and entrepreneurs in technology and life science companies start up, operate, get funded, and exit. So whether you’re already an entrepreneur or want to be one someday, or are just fascinated by the stories of how a business goes from idea to success or not such a success, this podcast is for you. Today’s guest is Chip Kennedy, a social entrepreneur and the founder and CEO of Civic Reach AI, a startup with a bold mission to leverage Void Voice AI to make local governments better equipped to serve everyone. Chip’s vision is rooted in building technology that enhances equity, access and dignity in the interactions between citizens and their government. On today’s episode, Chip shares his journey from freelance technologist to social entrepreneur, explaining how his passion for building impactful technology inspired the creation of Civic Reach AI. We’ll explore how his company is using voice AI to solve universal challenges in government customer service, such as long wait times and inefficient communication, while also addressing concerns like data privacy and responsible AI practices.

00:01:37 – Chip Kennedy

I learned even at a young age of what the difference a phone call can make. So if you’re someone who’s living on the margins, you’ve fallen on tough times, you’ve lost a job. A phone call can be the difference of, well, do my children have a bed to sleep in, a shelter tonight? You know, where’s my next meal going to come from? And on the other end of things, I’ve had friends who are incredibly well off, but they still have the same customer service issues with government in terms of I a tax mistake happened and that the labyrinth that is trying to figure out what that is. So it’s these moments in my life of learning and recognizing that it’s a universal problem. It’s felt very differently by different folks, but those interactions are really common and they’re all too often painful. And I can speak from my own experiences. So a lot of this, you know, entrepreneurs do customer research and our end users an everyday resident who needs help with something. I realized I’ve Been doing this research my whole life.

00:02:28 – Trevor Schmidt

Chip also talks about the balancing act of social entrepreneurship, ensuring his company stays mission driven while navigating the realities of scaling a tech startup in the government sector.

00:02:37 – Chip Kennedy

From my perspective and in my career, it’s really been focused on seeking out entrepreneurs and myself as an entrepreneur building companies that are rooted in a mission of making people’s lives better. There’s always this debate in the startup world of well, is that a nonprofit idea or a for profit idea? And I think thinking through social entrepreneurship as a lens of saying, well, it doesn’t have to be either or. You can create a sustainable business, a high growth business, an exciting big new business, and root it in something that’s, that’s good. It’s not always easy to follow those two things. It’s not always easy to make business decisions that mean that I’m going to make more money and I’m going to help more people. Sometimes those things are at odds. But I’ve loved challenging entrepreneurs and challenging myself to think about those two things constantly. And then the companies that get built as a result usually are net positive.

00:03:24 – Trevor Schmidt

Yeah, I mean, cause it’s interesting because as I think about just the typical path for a startup company, you have this idea, you get some traction, you get investment. The investment comes in, your VCs are looking to meet a certain revenue goal or whatever it is, you’re looking at multiples and all of a sudden becomes just about money and growth and finances. How do you fight against that kind of momentum?

00:03:48 – Chip Kennedy

I guess it’s a good question and I think the best way you can fight against that methodology is really look at the nuance of it. So when you start a company, you have optionality to do anything. And you know, the best part of being an entrepreneur is you start with a blank canvas and it can be really scary. But you also get all of these decisions that you own and in those decisions you can choose to say, this is where I want to spend my money, these are the vendors I want to work with, this is the mission I want to go after. And then as you mentioned, you climb up that ladder. If you choose to be a for profit venture backed, you start to have stakeholders and investors and board members that are putting pressure on you and have real stakes. You get to choose who those people are as well. And I think a lot of startup entrepreneurs I know sometimes can forget that. And even myself in the early stages, I need an investor. But really challenging myself to say who is that investor? Are their values aligned with me? Do they Know that I want this company to be a B corp? Do they know that I’m a social entrepreneur? Are they themselves rooted in that mission as well? And if not, are they going to be patient for me making decisions that might not be always about money? It’s a for profit company. We’re going to make decisions about making money, but we’re going to keep those in balance with what our core mission is and how we want the world to be better through what we build.

00:04:57 – Trevor Schmidt

Yeah. And I feel like that sometimes is hard because sometimes as a company founder you’re like, I don’t know if there will be another check around the corner. So do I have to take this money to make the company survive? And when you try to balance that with that mission goal, it makes it really. How do you balance that?

00:05:12 – Chip Kennedy

It’s a great question. I’ve never regretted money I haven’t taken. That’s great. I’ve been very broke at times. I’ve had companies that have run out of money, but I’ve never left a check on the table that didn’t feel right, that I then went back and said, oh, I should have taken that. And I’m not the only entrepreneur. I know where there’s horror stories whether they had that pivotal decision of taking or not taking money that maybe didn’t align with their values of sometimes something down the line because you’re not value aligned goes wrong. And money’s not about the money, it’s what you can do with it. And when you bring someone on who gives you money, they’re almost always becoming some sort of partner to what you do with that money. And you don’t want partners that don’t share your vision, social entrepreneurship or otherwise. And so I think thinking through it, through that lens has always made it a little bit easier for me. And I’m really grateful and proud. And I spent five years as an entrepreneur in New York. I’ve been in the Research Triangle, extraordinarily happy for three doing similar work. And in both places, there is not a shortage of entrepreneurs, investors, stakeholders, vendors who all have shared missions of mine. And it’s all just about taking the time to find those folks who are aligned.

00:06:19 – Trevor Schmidt

So was this focus on social entrepreneurship always there for you? Did it kind of develop or when did it develop?

00:06:25 – Chip Kennedy

I think the rules of it in my mind stay the same, but the definitions have changed over time as I’ve learned and grown myself. But I’ve always known at my core that starting companies, you know, is something I was excited about and the idea of building great big things and creating a team that builds great big things really became what I wanted my career to be about.

00:06:45 – Trevor Schmidt

Okay.

00:06:46 – Chip Kennedy

The social piece is all right. If I’m. If I aspire to have this power, how do I challenge myself to use that power in a way that, you know, is net positive? And so that’s where the evolution of, well, how do I be a social entrepreneur came from, and how do I surround myself with people who are doing a good job of that? How do I have just as many maybe nonprofit entrepreneurs in my network as for profit entrepreneurs as a way of challenging my own thinking? And those are all ways that have evolved my thinking, but hopefully my values along the way haven’t changed all that much.

00:07:14 – Trevor Schmidt

Yeah. Well, speaking of the kind of change over the time, what did you think you wanted to be when you were a kid?

00:07:19 – Chip Kennedy

Great question. Architectural engineer.

00:07:21 – Trevor Schmidt

Okay.

00:07:22 – Chip Kennedy

I said architect when I was little. I think I was just good at blocks. Okay. And then some uncle said, architects don’t make any money. Be an architectural engineer. So I guess the money crept in there. But with that said, I stood there for a long time, and what I learned is on the engineering side of it, I did have a passion for engineering, and I still do. In terms of the technicalities, how to make something work, how does something work? How do you reverse engineer something to make it work better? And I think so many entrepreneurs, especially those of us that build software products, have to think like that. The departure and why I think I would make an awful architectural engineer these days is I’m not always detail oriented in terms of, okay, we know how it works, we know how it might work. Over here now, implementation every day. I find that that’s just not always in my skill set. I’d rather be the person who can get people excited about a problem and have them work with me to follow through and to really think through implementing these new ideas.

00:08:19 – Trevor Schmidt

And when did you realize that that wasn’t your skill set or wasn’t your strongest skill set like the detail oriented? Was it something you learned painfully or was it something you developed over time?

00:08:29 – Chip Kennedy

Two versions of that? The unpainfully. I can tell you any architecture classes I’ve taken. I haven’t done well in any entrepreneurship classes I’ve taken. I’ve done very well in.

00:08:36 – Trevor Schmidt

There you go.

00:08:37 – Chip Kennedy

Okay. The more painfully is I’ve scaled many teams over the years at different companies for myself, for other companies, and I’ve learned through being a manager at startups, a manager of people, I’ve learned what My skill sets are and often get reflected and what gets done and not done and how effective I am at bringing a team together. And so that’s where I’ve learned my shortcomings. And often that’s painful because you steered a team member in the wrong direction or you ran out of money faster than you wanted, or those mistakes have high costs in startups. And so those are the painful version of learning what I’m good at and not so good at.

00:09:11 – Trevor Schmidt

Gotcha. So when did you transition to doing the computer engineering or computer science?

00:09:17 – Chip Kennedy

I mean, that was as early as high school. Just seeing the writing on the wall of what technology could do, and being the person in my big family who was the one person who would tinker with computers and try and get them to do things they couldn’t do before, I just kept scratching that itch. And I still am now, as an AI entrepreneur, I’m looking at things that we don’t fully understand and figuring out how to use them to help people and still scratching that edge.

00:09:39 – Trevor Schmidt

So would you say technology has always excited you, or is it kind of.

00:09:42 – Chip Kennedy

Absolutely.

00:09:43 – Trevor Schmidt

Yeah.

00:09:43 – Chip Kennedy

Yeah.

00:09:44 – Trevor Schmidt

Very cool. So tell us what you’re doing with Civic Reach AI, of course.

00:09:49 – Chip Kennedy

So I founded a company called Civic Reach a little more than a year ago here in Raleigh, North Carolina, and we are a voice AI platform for local governments to have better communications with residents. Taking the AI piece out of that and focusing on the problem we’re solving, we’re really trying to help governments. That’s towns, cities, counties, government agencies that often are under budget and understaffed in their ability to do simple things like pick up the phone to answer requests for those listening who don’t work in government. You can think of your customer experience of government as every time you have to wait in line at the dmv or if you have a question about your county tax assessment. These too often can be painful experiences if you’re waiting on hold or if you’re going in person. But these are what government customer experience looks like. So we want to help governments and give them the tools to be more effective, efficient, and kinder in these experiences, which they want as well.

00:10:40 – Trevor Schmidt

Right.

00:10:40 – Chip Kennedy

And voice AI comes in as this tool where you essentially have AI that can help pick up the phone in a way that enables governments to do it more frequently and more positively than they can now.

00:10:52 – Trevor Schmidt

So I don’t mean to sound dumb, but voice AI, so literally the AI is kind of talking in however you need it to.

00:11:01 – Chip Kennedy

It takes an adjustment. But you call the phone and this would be, say you’re calling your local water department to pay a utility bill. And instead of the water department picking up, it’s an AI that picks up. You can think of it as a well trained intern or administrative assistant. And the reason we’re excited is because commonly in that water department across the country, there might not be the staff for someone to pick up the phone. So we’re not trying to optimize someone out of a job, but instead we’re creating an area of customer service between all of us and our local governments that didn’t exist before. What I think was under your question is, is it creepy?

00:11:37 – Trevor Schmidt

Well, I mean, there’s that aspect of it because I’ve seen a lot of AI and some of it is creepy, some of it’s funny, some of it’s like just amazing that the technology is what it is. And so if you could talk a little bit about, about that, about how far we’ve come with like even voice AI in the last year, two years.

00:11:54 – Chip Kennedy

It’s exponential growth.

00:11:55 – Trevor Schmidt

Yeah.

00:11:56 – Chip Kennedy

In terms of what voice AI can do, what AI can do, and mostly talking about generative AI, and we use a lot of generative AI in our product, but we also use technology that’s decades old.

00:12:05 – Trevor Schmidt

Okay.

00:12:06 – Chip Kennedy

And some of what we’re trying to do is more available in people’s imaginations. Now, that wasn’t before, even though some of the technology we use isn’t particularly new. And what this evolution in AI has done for a lot of folks, that includes our customers, my team, our investors, is it’s captured people’s imaginations. Whereas if I started a voice AI company three years ago, I think I could build it with the technology that was available three years ago. But I don’t think I could convince people that it was going to do something that solved the problems the way that we’re solving now. Part of that has been the technology, but part of that has just been society moving forward. And to answer the question from before, of there’s a little bit of adjustment, but we’ve noticed in our testing and how we roll this out and just using other people’s tools is we all adjust pretty quickly and we’re all more adaptable than we think. And the intentionality of these tools isn’t always good, but when it’s good and it’s solving a problem, trust gets built easily for us to these systems and we enjoy using them.

00:13:10 – Trevor Schmidt

I was gonna say, in the end, people just want things to work and they want their problem solved or answer question. And if you Pick up the phone.

00:13:16 – Chip Kennedy

To call customer service, government or otherwise. You have a problem that needs to be solved, and sometimes you’re calling because you’re frustrated. Right, Right. So if we can get really good at solving that problem, it could be AI, human, anything. We just want to help folks get better at that.

00:13:28 – Trevor Schmidt

So was there a particular moment for you that was the germination of this company or. I know you talked about some of the problems that you’re looking to solve, but, like, what was the founding principle or what made you do it?

00:13:39 – Chip Kennedy

I think there are a lot of sort of insight moments along the way. The earliest was when I was little. My parents started a nonprofit, and we put on holiday parties every year for children living in homeless shelters across Boston. Where I grew up, that parties continue to this day. We actually have a few coming up. It’s December. We’re very excited. And in this experience of being a homelessness services nonprofit co director, I learned even at a young age of what the difference a phone call can make. So if you’re someone who’s living on the margins, you’ve fallen on tough times, you’ve lost a job. A phone call can be the difference of, well, do my children have a bed to sleep in, a shelter tonight? Where’s my next meal going to come from? And on the other end of things, I’ve had friends who are incredibly well off, but they still have the same customer service issues with government in terms of a tax mistake happened and the labyrinth that is trying to figure out what that is. So it’s these moments in my life of learning and recognizing that it’s a universal problem. It’s felt very differently by different folks, but those interactions are really common and they’re all too often painful. And I can speak from my own experiences. So a lot of this entrepreneurs do customer research, and our end user is an everyday resident who needs help with something. I realized I’d been doing this research my whole life, and so the culmination of turning Civic Reach into a company really just came of grabbing all of these things. And then looking at the moment we’re having generative AI in the last two years and saying, well, is this a good application of it or not? And the answer from folks I worked with, the answer from governments I talked to, is overwhelmingly yes. And that’s where I took another step forward and another step forward to build a company. And I’m grateful that those steps have culminated to today.

00:15:20 – Trevor Schmidt

So how much of it is customized for, like, a specific government, either office or city or Town or state government. What’s the process of you take on a new customer?

00:15:29 – Chip Kennedy

That’s a great question. So we’re early. So we’re just setting up our first customers now, which is exciting. The process is we learn that government, we look at the data they have available, we make our best effort with that government might be the city of Raleigh and say, well, what data is good? What data is bad, what data is outdated? AI in general is based on good data. Generative AI especially, is based on good data, bad data in, bad outcomes, out. So we work with governments to help them recognize and figure out where they are in their data governance and the current strategy. And then where we can build on top of, we then build voice agents that get deployed on the phone. And it can be a 311 system, a customer service center, or it can be a separate test line. It really depends on where that government is. And then we work with them to test. We work with residents to have them try it out. We embed ourselves in that community so we can really be on hand to say, this is an emerging technology. It can be scary for folks. Let’s hold everyone’s hand, the callers, the governments, everyone, to see if they like it. And we get to learn, and these governments get to learn how to implement this. And so far, so good. It’s been going well.

00:16:34 – Trevor Schmidt

That’s good. So is it kind of a separate. I guess I’m not articulating the question, but do you go into a specific administrative office and you’re doing a solution, say, for the dmv, or do you kind of come in and set up a standalone call center that can handle all things and then funnel out to these different organizations.

00:16:53 – Chip Kennedy

We right now are looking at systems that do both. Okay, so we will build for a specific department or the dmv. We talk to single cities and towns that might say they want a centralized call center for all of their departments. We’ve talked to counties that want the same. It really depends on the need. The underlying technology is very similar. You’re training AI to effectively transfer calls between individuals or departments, but the scope varies based on what each government wants.

00:17:19 – Trevor Schmidt

Right.

00:17:19 – Chip Kennedy

So right now, for each government, we’re crafting that something you didn’t quite ask. But the vision here is, for Those not familiar, 311 is a service implemented by some cities in this country, not many, but it’s a centralized phone line you can call. And the whole premise of it is that as a resident, you have a need and your government can solve it. So you Call. And it can be, I want to report graffiti on my street. There’s this pothole I’m hitting every day on the way to work. I want it fixed. My cat’s stuck in a tree. Everything that’s not 911.

00:17:49 – Trevor Schmidt

Right.

00:17:49 – Chip Kennedy

And there’s a lot of things that our governments can help with that we often don’t know. 311 is that phone line. You don’t have to know which number to call. You just call 311. We dream of a day where that’s as ubiquitous as 911, where everyone in this country, no matter where they live, no matter how rural, urban, they. They don’t have to know which service is which government. They don’t have to know that this is a county concern. They just can call a number and get information and services. That’s the dream state for us. So to your question, yeah, we’re going with each government. We’re building what they want right now, but we really are moving towards that interconnected network that we dream of where all governments participate and we as residents benefit because then we can just call a number and get help.

00:18:29 – Trevor Schmidt

And this may. You may have just answered this question, but my mind. Is there a specific application that is like your dream application of this technology for the government space?

00:18:39 – Chip Kennedy

It’s a very good question. The extensibility of AI means that we get to solve a thousand problems at once. That’s the difference between technology that we get to build today versus a week ago. So there’s 1,000 applications. Right?

00:18:51 – Trevor Schmidt

Right.

00:18:52 – Chip Kennedy

I use the DMV example often, and I will give credit to North Carolina’s DMV that has an online chatbot that’s surprisingly great, and they invested a lot of time and energy in it. But here in North Carolina, not to call out the dmv, but when I have a problem that the chatbot can’t solve, it’s a notoriously painful process. The phone calls I’ve had to make, the waiting in line, a lot of that has to do with I’m missing a piece of information. So my dream state of our system, if we ever work with North Carolina dmv, which we’d love to, is to work on those other harder use cases that weren’t as easily put into their first chatbot and say, well, we can start to solve that and solve this problem of listening to a resident on the phone and then giving them a critical piece of information, such as which DMV is open, what paperwork do you need? And reducing all of these friction points of having to wait in line when you didn’t have to, or having to call when you didn’t have to. And over time that compiles and give me my day back, but would give thousands of people their day back and let people not be as burdened by government systems as they sometimes can be now.

00:19:57 – Trevor Schmidt

So, I mean, you touched on it early on in what you were talking about. But I also want to talk about how do we safeguard some of the harms that are potential with AI, both in kind of job replacement, but also. So that’s one, I want to talk about the risk of job replacement, but the other is also when the chatbot fails and you can’t kind of find the answer you’re looking for, you can’t get it to say what you needed to, not having a person you can actually get to. So I guess your system is going to do it much better. But how do we still guard against those types of troubles?

00:20:31 – Chip Kennedy

It’s a great question. And any AI builder, entrepreneur, engineer, any large firm, which is almost every technology company embarking on AI systems should have a commitment to responsible AI. And so in thinking of what is responsible AI, it’s really working together to define that. I give credit to IBM for their responsible AI principles made by a lot of their executives here in the Triangle. I give credit to the current presidential administration’s AI executive orders that really focus on guardrails and safeguarding AI. And then how I think about it as an entrepreneur is really how am I learning from this. Some of these talk about systems and scales that we’re not at yet, but it’s important for us to think through well, at the scale we are in, what harm can we do and how do we protect against that? So the things that we borrow from all of those resources is setting guardrails. So thinking of the worst case scenarios and then hard coding that into our system to say if you trip this wire, it’s no longer an AI system. We have to end the call or send it to a human.

00:21:30 – Trevor Schmidt

Can you give an example of what that might be? I don’t want to get into anything.

00:21:33 – Chip Kennedy

Too proprietary, but yeah, yeah, we do sentiment analysis. So listening to the resident on the phone and if they’re particularly agitated, we’ve made the decision that we don’t want to assume the AI is going to handle that. Well, different people have different thoughts on this, but we don’t have the perfect technology to know, well, is this truly an emergency or not? But we know they’re agitated, so why don’t we transfer that to a human and our human in the loop design, which is another principle of responsible AI is having human oversight and humans involved. And so we are listening for cues of this person’s frustrated. Let’s maybe find that the human that can talk to them instead of an AI. So that’s one way that we sort of call it a parachute. So that’s a guard wheel that we’ve hard baked in.

00:22:19 – Trevor Schmidt

Okay. I guess it sounds like as part of the system, you do have those ideas of human intervention at certain touch points. So it’s not, you know, it’s never the situation where you hope, I guess what I’m like, this past week, my mother was flying in and I tried to help her with an issue with her flight with Delta. So I talked to Delta’s chatbot, God help me, it had no idea what I actually wanted to talk about. And so I logged off of that and tried to call in. And it’s like, okay, now it’s going to be an hour and 15 minutes to get to live human beings.

00:22:52 – Chip Kennedy

Right.

00:22:53 – Trevor Schmidt

And part of my mindset at thinking about this question, the problem is, all right, so you replace certain humans to do something more efficiently with this AI technology. And then when you actually do need to talk to a person, you’ve eliminated so many kind of person roles, that almost makes it harder to get to the one problem or one question that the AI can’t answer.

00:23:15 – Chip Kennedy

There’s a lot baked in here. I share your fear, and I don’t trust Delta to not do exactly what you just said. And we have all the evidence that they’re doing exactly that. And that when we call Delta in the future, you’ll wait an hour and 50 minutes and then an AI will pick up. I won’t speak for Delta or what the airline industries, what we’ll do with customer service and AI, But I can speak to government and the research we’ve done and the work we’re doing. But first, to zoom out of what is good customer experience that’s AI driven gonna look like. And I’m opinionated in that we should not be replacing humans wholesale in the long run. Do we have as many Tier one, the folks who first pick up the phone in customer service centers? Probably not.

00:23:58 – Trevor Schmidt

Right.

00:23:59 – Chip Kennedy

But how do we rethink now? What are humans uniquely good at? I do not think humans are uniquely good at picking up the phone and following a script. I think robots are fantastic at that. I think humans are fantastic at problem solving. And so if 40% of calls that come into any call center Government or otherwise are complicated problems. Your mom’s flight’s coming in, and there was a specific issue having to do with specific weather, and she has specific needs. Amazing. How do we build a system so that you have the availability of a human and then the 60% of calls that are just more route that can be solved by a script. Why don’t we export that to the robots? Once again, I don’t know how Delta’s gonna make decisions, but what we’re doing at Civic Reach and what we see in the government space is there’s very little conversation on, oh, this is gonna replace my customer service agents, or it’s gonna replace Linda, who picks up the phone in Parks and Rec.

00:24:47 – Trevor Schmidt

Right?

00:24:48 – Chip Kennedy

No, Linda’s overwhelmed. Linda can’t stop picking up the phone. IT Department directors can’t stop picking up the phone to reset people’s passwords. We’re taking these route tasks, and we’re saying, what would you do with the time if we gave you back the two hours a day of the password resets? If. If we gave Linda four hours a day back of wrong phone numbers? That’s not my department. And what Lynda can do, what that IT Department can do, what every customer we talk to can do, they have a long list of what they can do. So no one’s losing their job in these cases. We’re just seeing a way of helping folks in their current jobs do the things they enjoy and delegating the things they enjoy less. These route tasks, these annoying tasks to helpful AI agents that act like interns in their office and specifically take the role of picking up the phone. And that we see is beautiful. And we’re way less worried about job replacement in these cases.

00:25:35 – Trevor Schmidt

No, I agree with that. And I think that’s something we often forget as we’re standing in whatever government line we’re in, is that you’ve got people who are tirelessly trying to do three or four jobs. And, yeah, they can’t take that time to, like you said, tell somebody, no, this is not this department. You need to call.

00:25:53 – Chip Kennedy

One of our most universal learnings from the research we did at the start of Civic Reach and continue to see to this day is that when you interview residents who know little about the government that they’re trying to get resources from. Dmv, help desk, whatever you need. And when you interview those same government officials that are operating those systems and in charge of those systems, the desires and the problems to be solved are very similar. The person on the other end is very rarely your enemy. They’re not. It’s the systems and the bureaucracy that gets placed, the technological bureaucracy that has often kept us apart and made us feel at odds with each other. And if we can solve that, then I think we’ll make both sides a lot happier.

00:26:29 – Trevor Schmidt

That’s exciting. So speaking of bureaucracy, what are, what are some of the challenges in kind of working in the government space and trying to contract with the government and all of that?

00:26:39 – Chip Kennedy

Yeah, for those govtech founders out there, you know, these are common tropes, but they’re true. It’s long sales cycle, it’s very manual, it’s very in person. It’s the hardest sales process of any industry I’ve worked in. On the flip side, you can use that to your advantage. And if you’re willing to put the work and the effort and your brain to how to sell effectively and really how to learn as you go, you can have success in it. So that’s one area and then the other area, it’s very fractured. We often talk about, for those who’ve founded tech companies or those who are building any company, you solve someone’s problem and then you figure out, well, who else has that problem and how can I repeat my solution for all of them? Government is often a space where the problem shape, size and details look different from one customer to another. And we work with local governments and it’s especially true. So it’s a challenge as a company that needs to scale one product or versions of one product to figure out what are the through lines between this town, this city, this county. They’re all interested in our product. How do we build one thing that will make them all pretty happy. That’s, I’ve noticed, a bit harder in the government world. It’s a challenge worth overcoming, but one that we face every day.

00:27:50 – Trevor Schmidt

Now I would imagine like the budgetary issues are a challenge as well because Parks and Rec is going to have their budget and DMV’s is going to have their budget and you know, finding kind of how to allocate so you can solve everybody’s problems. Is that a challenge or is that.

00:28:05 – Chip Kennedy

It is a challenge. Not just having a credit card form on a website. You know, when I’ve built more consumer facing technology is different in terms of how you get money. But I’ve mostly built technology and products as an entrepreneur and so I really think of this as a product mindset now that I’m a govtech entrepreneur and the question is, how can I build a product that solves a worthwhile problem? For these customers, I want to make the world better. I want to solve true problems and I want them to agree and understand that they agree with me that this is a problem worth solving. If we can do that and we build the product and we build AI that works well to do that, then it helps solve a lot of the how you get paid problems. And this is true in entrepreneurship, govtech or not, oftentimes. And I’m biased, I’m a product builder. But when I’ve consulted other entrepreneurs, I’ve worked for other entrepreneurs and the problem is we’re not getting paid enough. We can’t figure out how to get more people to give us money. It’s always a product problem. Make the experience better, make what you’re building better. Go invest in the research and development, whether it’s software, hardware, otherwise. And often by doing that you find oh, people are more willing to pay because you raise the quality of your product. And so I think of that with ourselves as well and any government technology and there’s a lot of government technology that’s bad. It’s a notoriously under invested in industry in terms of innovators and innovation. So the bar is pretty low and it shouldn’t be. It’s embarrassing. But that’s an opportunity for us to say we’re going to bring you a really high quality product, we’re going to care. We’re going to be a team of technologists that do this right. And that has helped us get a lot closer to figuring out how to make money and to sell.

00:29:44 – Trevor Schmidt

And you’ve touched on this a little bit, but talk to me a little bit about how you think of scaling because as I imagine like, okay, doing something in Boston is going to be completely different than doing something in Durham, which is going to be completely different than doing something for my. I grew up in small town western Nebraska, so flying in to drop into Dawes County, Nebraska, wholly different system, wholly different issues and problems. How do you scale with that?

00:30:08 – Chip Kennedy

Yeah, there’s a lot of answers to this in terms of company building, product, et cetera. I can touch on a few of them in terms of AI products. One thing I’ve learned in one of our principles is just separating data from the product I mentioned. You need good data for good AI. But if we build systems such that a city or a town owns their data and we’re building the product on top of it, we can have opinions on how they structure their data, we can help them make their data better governed and better organized. But at the end of the day. Dividing those responsibilities between product and data can let us build a product that is independent of the data that’s served in. And what that allows us to do between a small town in Nebraska and Boston is still have the same product in both places, but because the shape of the data in each place is different, therefore the outcomes are different and catered to the diversity of the audiences. We’re testing that a lot now, but I think it’s going to be one of the core principles of our company for a long time and how we think our goal is to be an AI company that effectively uses data, not necessarily the company that’s just taking data from our customers and holding it back from them. We want to empower governments to govern their own data and understand their own data. And then that will, to answer your question, allow us to scale better. There’s a host of other ways as just an entrepreneur and a person building a tech company of how do we build a product for different people in different places? And that will be a lot of what we learn along the way.

00:31:28 – Trevor Schmidt

Yeah. So what do you see as the biggest opportunities for the company maybe in the next 12 months and in the next five years?

00:31:36 – Chip Kennedy

It’s a great question. I think our biggest opportunity is to be an AI for government company. And that’s not related to our specific product per se, but to earn that trust and earn that trust by doing right by customers, by building systems at work, by helping residents and helping governments with the technology we build. With that trust, there’s a massive opportunity to help an industry move forward. Industry is govtech and local governments using AI In a time where there’s a ton of uncertainty, in a time where AI can be scary, People question the marketing of AI, the bubble of AI, all these things that can undermine, well, what can it actually do? And we’re really bullish. I’m really bullish on the outcomes are amazing and this is going to change the world and we’re already seeing that. But folks need help and industries need help and I’m really grateful for the opportunity. And I think it’s a massive opportunity for civic reach for us to be that trusted player so that when governments have questions about AI, we’re the ones who can help guide them through it. And we’re building the systems that can make their entire government more AI enabled, whether it’s for our products or for other products down the line.

00:32:44 – Trevor Schmidt

So you talked about a little bit some of the fear, some of the uncertainty, just the media frenzy around AI. What are some of the hurdles that you’re seeing in helping these governments overcome kind of the opportunities that you described.

00:33:00 – Chip Kennedy

Some of it is marketing in bubble people sick of AI, but I’ve noticed it’s actually cyclical. So I might talk to someone one month that says, I don’t want to talk about AI, I’m sick of it. And then a month later they downloaded a new ChatGPT update personally and their granddaughter showed them something and they’re back in. Which shows us the pace of evolution and how excited we keep getting about this and proof that I don’t think we’re in a bubble, but there’s a host of other things that in the market might hold us back. There’s a lot of pending regulation legislation. We’re all for good regulation around AI. I think it’s awesome. And I can attest to the federal, state, many states and local governments have come together to really talk about regulation and AI and that’s fantastic. We should want to take this fledgling but very powerful industry and make sure that we’re putting societal and legal guardrails around it so that it benefits everyone. And we don’t have companies building things for negative outcomes. But at the same time, we have to make sure those regulations still allow us to be a company. And another thing is just trust and proof over time. A huge hurdle is I can shout from the rooftops about how exciting this technology is, but we’re a new company, I’m an entrepreneur, that trust gets earned over time. And government is a very, not very particularly risk tolerant place for good reason. This is taxpayer money. And so that trust doesn’t come overnight, I will have to work really hard to build it. I’m dedicated to building it through this company. I’ve loved being a person who gets to build that trust, but it will be a hurdle because it does take a lot of effort.

00:34:34 – Trevor Schmidt

Now, in the government space, is there the same kind of, I don’t know, word of mouth benefit? So like if you have super success with your first local government, is that, I mean, do they talk about it in their boardrooms or whatever it is?

00:34:47 – Chip Kennedy

Yeah, I’ve, I’ve never seen an industry where there’s more. Yeah, word of mouth sales. Some of our potential customers right now came to us only because of a testimonial from another government we haven’t even worked with. But it’s a government who understands our mission as a company, knows our vision of how we’re building, understands the tech we’re building, and trusted us to say, I like what you’re building, I’m going to bring you in front of other governments. We’ve seen that for other startups in this space. Help them take off and also bury them. Word of mouth goes both ways and the adage that I think I keep relying on is build a good product. What’s going to give you good word of mouth is your product works better than expected. What’s going to tank you early on in your first customers is if you underdeliver. And so really trying to as a company be focused on building a good product, not rolling out AI features that we don’t yet trust and really doing this right with governments.

00:35:41 – Trevor Schmidt

So do you have a target customer that you think if I can land this, this is going to be something we can point to that everybody’s going to be like yes, we can roll out from here and that’ll get you your momentum that you need many.

00:35:53 – Chip Kennedy

Any good sales cycle has 100x targets of folks you want to work with versus the ones you actually do. But we do think this technology will work best in any municipality. We’re looking at larger and mid sized cities right now as well as large counties in this country.

00:36:06 – Trevor Schmidt

And what is the definition of that? It was a large mid sized city.

00:36:10 – Chip Kennedy

Great question. Being in the city advocacy world, city can be any size. I’ve learned this. But we’re looking at municipalities with a population over 50,000 in counties that are either large geographically or also have a population over 100.

00:36:25 – Trevor Schmidt

Good. So I want to hear your opinion on it because I know we’ve talked about the AI bubble and you said we’re cyclical so we’re not in an AI bubble. You don’t think we’re.

00:36:36 – Chip Kennedy

I’m an entrepreneur and a product builder. I’m not a predictor of markets. But I think bubbles from a technology standpoint in my career I can think of blockchain have to do with when we don’t see the outcomes that were promised to us entrepreneurs like me. And with AI I can see the outcomes that have been promised to us. Lots of people are selling snake oil. There are AI scams out there. It’s a problem. But by and large people are building systems that are delivering on the promises that were made over the last few years of what AI will do. And this is just the beginning. And there have been technology trends in my career fueled by venture capital, fueled by investments, fueled by entrepreneurs like me that didn’t pan out that way. In terms of AI bubble, from a product standpoint, I don’t see it because we keep Building products that are doing the things and lots of folks don’t even know. I’m very lucky in this day job. I get to play around with more advanced AI and then I know that there’s this long tail of folks that are still climbing that ladder and learning and some folks who aren’t yet ready to learn. And so a lot of them don’t even know how powerful these things are becoming. And that can be scary. But it also proves that the technology is delivering. And so it’s now our job not to talk about, well, is this a bubble? But it’s here, right? It’s happening, it’s effective. How do we make it effective in a way that we think is good?

00:37:57 – Trevor Schmidt

Yeah. Well, and I think that’s interesting because I think some of the bubbles that I’ve experienced as well, you’re like, people are excited about it, talking about it. You’re like, I don’t see any real potential value of the technology or whatever it is that you’re Talking about thinking NFTs or some of the early hype around kind of distributed technology underlying blockchain. You’re like, it’s great that you can do it. You haven’t found this use case or anything that’s making me think that there’s some value here. AI is completely different in my mind.

00:38:25 – Chip Kennedy

Couldn’t agree more. And we have a tendency in the startup world and the venture backed startup world to come up with new technologies and then go find a problem to solve. And AI is no different. But to the point you said, I couldn’t agree more. We actually are finding problems worth solving. And that wasn’t true at the same scale with some other recent technologies.

00:38:44 – Trevor Schmidt

So even if it’s not a bubble, though I do think there is. You know, every company we talk to, every pitch deck that we see, you know, there’s some reference to AI or superfuture application. So it’s some, it’s, it’s just a crowded field right now, at least in the conversation. So how do you kind of cut through that as you’re talking to your potential customers, you talk to potential investors. How do you think about that?

00:39:06 – Chip Kennedy

It’s a great question. There’s a lot of noise.

00:39:11 – Trevor Schmidt

Yeah.

00:39:12 – Chip Kennedy

For those who are just consumers of technology, there’s a lot of noise. And I just think of how I talk to my mom about technology and I don’t have great answers for that yet. I’d say test, have minimal understanding of data privacy and how to protect yourself and what not to put into a chat prompt. And then from there, be willing to take risks and trust and see what happens. And I think that’s been really positive for folks in my life to cut through the noise and figure out what AIs can work for them in their daily life. For companies and markets and other entrepreneurs. We’re in the govtech space because of our mission. It’s to create this universal system, but then in the short scale, really help governments get to that next level and use AI in a place that can help them serve all of us better. We love our mission and we found a great way to do that with AI. One way to cut the noise is that we care about working with government. And so the 99% other companies that might be building voice AI or call center solutions or whatever they’re doing, it’s not the same. It’s not as competitive because we have a customer in mind and we have a mission in mind, and they don’t. And that’s fine. Both companies can exist, but we don’t have to worry about them as competition. There’s maybe three or four companies that are doing voice AI that are constrained to the government use case, the local government use case, and we look to them as competitors, but we also, some of them are friends of mine and we learn from them and we’re all trying to learn what this new technology looks like in this specific space.

00:40:35 – Trevor Schmidt

That’s great. And something you said makes me want to actually take a step back because as you talked about data privacy concerns for somebody using AI, how do you think about that for your company? And how do you kind of, as a caller coming in, I may be providing very sensitive information over the phone, sometimes inappropriately, as far as, like, who I’m speaking to. So, like, how do you think about that? How does your system kind of address some of that sensitive information?

00:41:03 – Chip Kennedy

I love that. We really challenge ourselves to think about data privacy a lot. And I think any good AI company should. It also helps. Our COO is our lawyer. That’s good and she’s fantastic. In terms of product, we’re challenging ourselves in different ways. This is a hard problem. By working in the government space, we’re almost always working with publicly available data. So in terms of the data we use to train models, the data we use to build AI systems ingest into AI systems, that is not at a high risk of becoming public because by definition it already is public. In terms of the data that gets created through call transcripts and call logs by individual callers, we’re trying to solve those problems now. Of what we’re doing is recording conversations, if the government wants to record them, and taking transcripts of conversations where it might not have been transcripted before. And then to your point, pii, if someone says their name and then a medical condition, even though they’re talking about a pothole, they just said phi. And so we think about that a lot. One way is building the systems with each government we work with to figure out their risk tolerance. That’s a lawyer to lawyer conversation. And then on the product side, it’s doing our best to scan for PII and phi, knowing that it’s inputs that we can’t control. But then we can go back through our transcripts and find ways to say anytime a person’s name was said, how do we then isolate that transcript and make sure it’s not publicly available and mark it for deletion if it looks like it’s pii? And these processes do work. And a lot of the systems we build is to get governments to be able to do this themselves, not to create more work for them, but to say, hey, you now have transcripts that you can use to do all the sorts of sentiment analysis and you can really learn what your residents want. And you just have to know that 20% of transcripts get thrown out or 20% of transcripts have to be reviewed as a way of us protecting residents from themselves, of releasing information that they shouldn’t have been.

00:42:52 – Trevor Schmidt

Well, as a lawyer who works in the data privacy space, I thank you for actually thinking about this and having some of those issues in the front of your mind rather than like, oh, wait, we should have thought about that.

00:43:03 – Chip Kennedy

Once again, you can thank our coo.

00:43:04 – Trevor Schmidt

Well, if I have a chance to meet them, I will. So I do want to ask, as somebody who works in the AI space, unrelated to your company, is there an application of AI that most excites you kind of not what you’re doing, and then another one that worries you?

00:43:21 – Chip Kennedy

I’m worried about scams and specifically mis and disinformation and just the. The effect on our elections that a lot of people study. And I think it’s underreported. You hear about it a lot. I still think it’s underreported the effect on my mom. She keeps coming up because she’s this baseline of my ability as a technologist to explain things.

00:43:41 – Trevor Schmidt

Right.

00:43:42 – Chip Kennedy

So it’s a good test, but it’s fearful of someone’s ability to take my voice. This podcast alone, even five minutes of this podcast, someone could take it and go Figure out, I think, how to get money from my mom. So that’s a really scary application of Voice AI, which is an area I work in and I don’t yet know how we’re going to protect against that. Something I’m very excited about. Also Voice. I’m very biased towards my work, clearly. But I do think voice is this amazing tool that AI has moved into. It just carries so much information. Information. I listen to a lot of podcasts to digest information. It just suits the way my brain works really well. And I’ve working on a project now just on the side to ingest a lot of information that I used to get over emails that I’m now overwhelmed by. 10 industry newsletters, for example, and turning it into an AI generated podcast where two hosts that are both AI talk to each other.

00:44:31 – Trevor Schmidt

Nice.

00:44:32 – Chip Kennedy

I like it. One, podcast can be done in the background. Two, it takes maybe 30 minutes of reading and compresses it to a 10 minute audio sample. It’s more information dense. And four, it matches the way I think.

00:44:42 – Trevor Schmidt

Yeah.

00:44:43 – Chip Kennedy

And so it’s a way of getting news in a format that I don’t like digesting and putting in a format I do like digesting and then just puts more information to my head during the day. And I love that.

00:44:53 – Trevor Schmidt

That’s really cool.

00:44:54 – Chip Kennedy

None of that existed like six months ago, right? Right. Yeah.

00:44:57 – Trevor Schmidt

No, it’s an exciting time. I tend to be an optimist as well when it comes to it. There’s always things we got to worry about in any technology.

00:45:03 – Chip Kennedy

Exactly.

00:45:04 – Trevor Schmidt

Hopefully the good outweighs the bad.

00:45:06 – Chip Kennedy

Technology is a tool. It’s up to us to have these conversations, lawmakers, decision makers, to say that a tool can be used for good or bad and learn lessons. I think social media, we did a bad job as a society making decisions of what’s good versus bad. And now we get a chance with AI to do it differently.

00:45:22 – Trevor Schmidt

Hopefully we’ve learned our lessons.

00:45:24 – Chip Kennedy

I have confidence we have. And I’ll keep pushing the lawmakers in my life and our customers to keep keep having these conversations as well.

00:45:31 – Trevor Schmidt

That’s great. So we are the founder shares podcast. And so I like to ask all of our guests if there’s one piece of advice that you would share with somebody who’s thinking about starting a company or is early on, what would that advice be?

00:45:41 – Chip Kennedy

Can I give two?

00:45:42 – Trevor Schmidt

Of course. You could give like six if you needed to.

00:45:44 – Chip Kennedy

I think there’s two that I’ve given very commonly to founders in my life and entrepreneurs who have asked for advice that I think feel relevant. One is I’m a technologist and founder, but there’s a term that I don’t like using anymore, which is technical founder. And for those of listening who are founders, you hear this a lot, either because you’re a non technical founder or you’re a technical founder. And I think it’s malicious in that it buckets people into roles that don’t make sense anymore, especially with AI. But even well before that, technology is accessible to those who want to put the work in to understand it. And if you can understand how to use technology as a tool to create a solution to some problem, you’re an entrepreneur. You don’t need a computer science degree, you don’t need a patent, you don’t need to be a technologist. You just need to put that time in and effort to have empathy for the problem you’re solving. And then if technology is the right tool, congratulations. So I coach a lot of entrepreneurs on that and I just love saying that my background’s technical, but that’s not the mark of an entrepreneur. You can be any sort of background and that shouldn’t technology part shouldn’t scare you. Building a technology company. I love that there was a second one and this is common advice, but I love saying it, which is just get started. Whatever resources you have, do something. If you have a day job and you dream of starting a company, there’s so many things you could be doing to interview someone, learn more, apply for a grant, build something using AI. We have more tools than we’ve ever had available to us to create things. Generative AI is a big part of that. And so for aspiring entrepreneurs, that’s my number one advice is go create something and show it to someone else and you’re going to 10x your understanding of your own problem and your own idea and then you do it again, you do it again. And you don’t need to quit your job to do that. You can get started with that tomorrow. And so try it.

00:47:29 – Trevor Schmidt

That’s exciting. I love it. Just get out and do it and try new things. So how can our listeners connect with you? What’s the best way to learn more about civic reach?

00:47:38 – Chip Kennedy

Yeah. So for those who work in government, if you’re interested in our solution, we’re taking on our first set of pilot customers. Now we’re working with cities across the country. We’re always open to more cities that are interested. We have a really cool technology we’ve built and we think it can help a lot. Civicreach AI is the domain name. I’m chipivicreach AI if you wanna reach me directly and happy to have a conversation. And then for founders more generally or folks in the space, I’m very proudly an entrepreneur based here in the Research Triangle. And so I want more folks to get involved in our really thriving tech and innovation ecosystem. So I throw networking events called triangle tech night, triangletechnight.com, you can come, sign up, come through. I think they’re pretty cool. I would do those throughout the year. You can find me on LinkedIn shouting about events in the Triangle. I’m really proud of this place and I love being an entrepreneur in this place and I want more folks to get involved and experience what I get to experience every day.

00:48:27 – Trevor Schmidt

See, that’s great. We just need that as a clip for like an advertisement. We’ll just push that out because it is a great place to do this type of work and to have the ecosystem so very excited. Chips, thanks so much for your time today and I enjoy the conversation.

00:48:39 – Chip Kennedy

Likewise, I appreciate it.

00:48:44 – Trevor Schmidt

Foreign that was Chip Kennedy. To learn more about Civic Reach AI, visit civicreach AI that’s C I V I C R E A C H dot AI thanks for listening to this episode of the Founder Shares Podcast. If you’re a founder or business owner and need legal advice, be sure to check out our team@hutchthaw.com that’s hutchlaw.com we have the capacity to help you out with just about any legal need your company may be facing. We’re passionate about the innovation economy and ready to help you on your entrepreneurial journey. The show was edited and produced by Earfluence. I’m Trevor Schmidt and thanks for listening to the Founder Shares Podcast.