The GOP’s Missing Innovation Ecosystem

Innovation is like a chemical reaction. It needs reagents in the proper quantities in order to proceed. If an element is missing, the reaction won’t start. If another element is not present in sufficient quantities, the reaction will stall. When you scale these individual reactions into the thousands and millions, you get an ecosystem. 

The conservative political movement lacks an innovation ecosystem. There are components of one, but no complete, sustainable system. That’s what Startup Caucus is building.

The Left is successfully building out their modern innovation ecosystem. They’re welcoming entrepreneurs and technologists into their movement, funding their work, and adopting their solutions. This chart showing new technology startups in the political space reveals Democrats’ accelerated pace of innovation compared to Republicans.

This data tells the story of a stalled chemical reaction in terms of the Right’s approach to innovation. So what are the components missing or absent in sufficient quantities for the conservative innovation ecosystem to function properly? 

Talent

Startup Caucus works with a number of entrepreneurs and technologists who are building products to run more effective political campaigns. Before we launched in 2019, however, there was no dedicated “welcome center” for founders to learn about the right of center political ecosystem and how to build, grow, and scale a company for Republican campaigns. 

We still have a lot of work to do in getting the word out to prospective founders and letting them know we’re here to help. For those that we do get to know, one of the most significant challenges remains the lack of financial support for this business model. It’s not clear to them that they will have the talent or capital they need to build a successful company. 

Investors

That’s where committed funding for the innovation ecosystem comes in. The Left has invested more than $20 million in for-profit technology startups over the last 4 years. Many of the companies they have seeded have had successful exit events through acquisitions by incumbent providers. 

Startup Caucus invested $150,000 in our first batch of companies and we’re in the process of raising a larger fund for our next round of investments. That’s still not enough to match the coordinated, strategic investment we’re seeing from Democrats. 

Users

Our portfolio companies also confront a significant talent deficit on Republican campaigns. In many cases, Software as a Service (SaaS) must become software with a service because internal campaign staff are stretched so thin they cannot properly leverage the tools provided to them. 

This results from a few contributing factors. The first is a misaligned focus on preserving cash on hand (COH) during the early stages of a campaign. Second is a widely recognized lack of digital marketers and tech-savvy staff to work on campaigns. Finally, we see an over reliance on outside consultants and vendors whose business models have not adapted to the needs of modern campaigns.

Like the companies we mentor and invest in, Startup Caucus is always iterating, always improving, and always learning. In order to support entrepreneurs and technologists, we must address broader challenges impeding a sustainable innovation ecosystem on the Right.