Digital first supporter engagement tools are increasingly becoming a necessity for nonprofits, especially to engage younger supporters. Winner of the 1Mby1M-Blackbaud Social Good Startup Challenge, The Tuesday Company has built a supporter engagement platform called Team to help nonprofits activate volunteers, grow membership, and raise money through the power of friend-to-friend outreach and digital organizing. The current state of pandemic has injected an acute urgency to its clients who have gone from seeing digital first supporter engagement and Team as something they should implement to something they must implement now.
As campaign veterans, CEO Michael Luciani and his co-founders CTO Charlie Austin and CRO Shola Farber experienced gaps in progressive politics and advocacy. To reach supporters, organizations rely on mass texts, e-mails, and ads that are scalable and affordable but impersonal and ignored. Meanwhile, their volunteers make cold phone calls and knock on doors in a way that is authentic and personal but slow, expensive, and narrow. For the Clinton Campaign in 2016, Michael experimented with the tactics behind Team and his county was the only one in Michigan that voted Democrat in 2016 by greater margins than in 2012. After that election, he co-founded The Tuesday Company and launched Team in 2017 with the aim to solve problems he saw as an organizer and build the tools he wished had existed.
Team is a platform that acts as a central hub for staffers to organize and activate their supporters. With Team’s chat features, staffers build authentic and personal relationships with new supporters at scale and can prompt and track actions. Team matches supporters’ phone contacts against staffers’ target lists, then prompts supporters to contact targets they know and to add other friends as new targets to the lists. On Team, staffers also direct supporters to share content on social media; this enables them to push narratives into real communities using trusted messengers and modern communication methods. Finally, Team is a powerful generator of consistent recurring donations that is 28x more engaging than the email list it replaces. Volunteers reach out to friends and post on social media in a way that is authentic and personal as well as fast, affordable, scalable, and 20x more effective than any other outreach. It was recently featured in Wired.
Initially, Team’s primary competition was analogue organizing methods like in-person meetings and knocking on doors. Other competition is email products like Mailchimp and mass texting products like Hustle. They do not compete directly but compete for the same budget. The main competitor in the campaign space is VoterCircle which has a similar competing product that allows supporters to send emails to their friends. However, they have been consistently losing market share over the last year due to a less robust feature set and management decisions that have alienated their potential customers. Team’s main competitive differentiation is its strength in building for its clients in a way that fits into the programs that they run.
In 2018, The Tuesday Company’s digital volunteering platform Team was used by every Democratic congressional race that won in a Republican district. Working in 2018 with thousands of races resulted in revenue, proof of product-market fit, and a base of customers who have been critical validators and sources of referrals to nonprofit clients. From its campaign referrals, it was able to form partnerships with large nonprofits like the League of Conservation Voters and the Human Rights Campaign.
Team has so far been used by over 2,000 campaigns nationwide from school board to presidential candidates. Since 2019, Team has expanded into the wider nonprofit and advocacy market, fueled by the referrals of its campaign clients. Referrals are its primary sales generator, and its sales team is its secondary sales generator. It currently has over 300k end users who have contacted 1.2M people on behalf of organizations that they care about. 80% of its clients are weekly active users of the Team dashboard. Following the pandemic outbreak, the company saw its new nonprofit client inbounds jump from 20 in February to over 600 last week.
The Tuesday Company is a winner of the 1Mby1M-Blackbaud Social Good Startup Challenge and now has a channel partnership that gives them an opportunity to access Blackbaud’s 35,000+ nonprofit clients. It has a partnership with EveryAction as well. It expects its recent channel sales partnerships to account for an increasing share of its lead generation and lower its CAC. The average cost to acquire a large nonprofit client is $22K and is a six-month sales cycle. Nonprofits purchase a license to Team for a flat monthly rate, depending on organization size and the population of the state. The average LTV of a large nonprofit client is $410K.
In addition to their campaign revenue, the Tuesday Company’s nonprofit revenue has grown from $20K in 2018 to $250K in 2019. It expects revenue to exceed $2M in 2020. It currently has $40K of nonprofit MRR, $400K in new nonprofit ARR in Q1 of 2020, and $850K in new nonprofit ARR in its sales pipeline.
The Tuesday Company’s top target segment is large nonprofits in the US that have over $10M budget. US-based nonprofits spent $61.5 Billion on outreach in 2017. 50,000 small ($1-10M budget) and 15,000 large (more than $10M budget) nonprofits represent its TAM in the nonprofit space, with a potential annual revenue of $48K/year for small nonprofits and $180K/year for large nonprofits. This represents a $5 billion + market opportunity with only domestic sales.
The Tuesday Company’s channel partnerships with companies like Blackbaud can be a complete game changer and can also lead the way for a potential exit path.
The Tuesday Company bootstrapped for the first six months of the company. It then raised a pre-seed round from Higher Ground Labs in 2017. The funds were used to improve its MVP, find product market fit, and show traction with a dozen clients. It next raised funds from angel investors including Reid Hoffman and Chriss Sacca in 2018 to scale up operations and in 2019 to pivot to the $5B+ nonprofit market. Having found product market fit and proven traction in the nonprofit market, it is now looking to raise funds to scale the nonprofit business.
The Tuesday Company is currently raising convertible debt in a pre-series A round. It aims to be profitable and then raise a series A round in 2022. Its ideal institutional investor would be excited about the future of digital-first communities of common cause and share its vision of expanding through the nonprofit vertical.
This segment is a part in the series : 1Mby1M Incubation Radar 2020