The Role of Stories and Reputation in Local Economic Development

Conversation with Zencity CEO and cofounder Eyal Feder-Levy

Zencity is a Microsoft and Salesforce-backed civic engagement tech startup that works with over 200 cities and local government agencies across the country to provide data around organic community feedback online. Last month, Zencity acquired another startup in this space called Elucd.

UrbanTech Founder JT and Eyal discussed last month how cities are using new data platforms to remove friction from urban life, how Zencity works with localities to help them understand civic engagement, and much more.

The role of stories and reputation in local economic development

J.T.: Eyal, thank you so much for joining me. Can you explain a little bit what Zencity is and what you do on a day-to-day basis?

Eyal Feder-Levy: Sure. So Zencity city is a startup, and we are based in Tel Aviv, Israel, and our goal is to help local governments understand the needs and priorities of the communities they serve on a community and large-scale basis.

We measure inputs coming in from many different channels, both our proactive ability to question the survey, the community, and our ability to listen in on organic discourse things people are sharing on social media. And provide an in-depth analysis of community needs and priorities to power decision-making around policy, resource, allocation, and messaging.

Today we serve about 200 local governments, mostly in the U.S.

J.T.:  What are some examples of the kinds of governments you're working with?

EFL: It's a variety. First of all, we're super transparent about it.

You can go on our website and see the list of our customers in full. But we work with cities as big as LA, Chicago, Houston, Phoenix. Those cities are number two, three, four, five, and six in the U.S. top 10 largest cities. Still, we also work with cities like tiny communities, including the village of Lemont, Illinois, or the town of Blue Ash, Ohio, or the city of Rockport, Texas.

So it's quite a wide diversity from Cities of 10,000 residents to cities with 4 million people like in L.A. 

J.T.: Not to get too much in the weeds, but I guess what does the product look like? Or what are the services specifically like you provide to localities? I'm sure it changes a lot based on what the locality or city needs, but could you maybe go a little bit more on to that?

EFL: So it actually,  it doesn't change that much. It's a SaaS product, meaning it gets the same for everybody. And the way it works is very simple. We basically loop in the data coming in from all these inputs and use some A.I., some machine learning to make sense of this infinite stream of unstructured data created by cities.

Or we're talking about listening in on that organic discourse. We're talking about hundreds of thousands or even millions of comments monthly for the communities that we serve. And we loop in all that conversation, and we run a few algorithms on them to recognize the topics that are being discussed, the sentiment in each one of these comments, whether it's supportive or a detractor.

And then, we upload all of that raw data, in a very simple, easy-to-read dashboard. City managers and mayors can access online on their mobile, on their browsers. But basically, at the end of the day, you'll see a graph that says, here are the topics that are being discussed in your city, for example, transportation or gun violence or COVID vaccines.

Here's the volume of conversation on each one and the sentiment towards it according to your community.

J.T.: That's awesome. I'm curious. So you're in Tel Aviv, but you work with a bunch of U.S. cities. I know Tel Aviv has a very active tech community, so I'd love to hear a bit about how you think about that dynamic?

EFL: Yeah. Sure. The majority of our business is in the U.S. about over 180 communities of over 200; we serve or are in the U.S., almost all of them in essence. And they're also pretty widespread in 34 different States, from California to Wyoming.

And I think it's it's an interesting experience that a lot of our team is. American and just living until Tel Aviv. I was born in Boston. We have someone who worked for the city of Hoboken, all the way to people who moved to Israel when they were two years old.

But, I think one of the interesting things about being based in Tel Aviv is that there's, as you said, a very active tech scene here. It allowed us to recruit a lot of top engineering talent and raise a lot of venture capital to build a company that really serves this use case that didn't exist that much here in Israel.

We're one of them, probably one of the first go-to companies here in the local tech scene. 

J.T.: How do you go about building trust with the urban planners and manager you work with?

EFL: When we started out, I was very much aiming to target the planning community as customers. But we were surprised to find out that the pain of not understanding the community at large is actually a pain that's felt across the local government organization, across all the different departments, and especially among senior leaders. Today, the majority of our users are city managers. So the city manager's office, including the city manager, deputies, and assistance communications teams who report up to city managers, are very active users of ours and roles like strategic planning.

And, of course, more classic planning and even police departments, transportation, departments, parks, and recreation public works. We have users across the board, with the city manager's office being our hub usually. 

J.T.: Yeah, that makes a lot of sense. Are there any interesting urban trends or city trends that you've observed coming out of COVID? 

Obviously, a lot has changed in the last year but is there anything at a high level you'd call out to the listeners or the readers, as I don't know, maybe one or two things that were really interesting or surprising, or maybe weren't so surprising.

EFL: Yeah. I think right now, what are the most surprising trends for us was? And we started talking about this a few months ago, was the skepticism towards the vaccines. One of the most interesting things in my perspective is the role that local communities play when it comes to vaccination.

Because we don't think about it often and in most places, the county or the state would be responsible for the vaccine operation and the city would be supportive on the logistics side, but there is a very clear vested interest for a city to raise the vaccination numbers within it, because that's a ticket into reopening local businesses to begin fully emerging from this crisis to some level or another.

And one of the things that surprised me a lot is when we started seeing conversations about the vaccine, we started seeing that there was much more negative sentiment and skepticism and misinformation about this than probably about any other issue in the cities that we work. We've been tracking the conversation for quite a long while now.

Just being a little bit in the future now in Israel when it comes to vaccines, we are hitting that skepticism wall hard. What's standing between Israel and reaching that herd immunity is that we're plateauing on that 60% vaccination mark, because a lot of people that are just skeptical about the vaccine are not showing up to get their shot.

J.T.: Yeah. Wait, so I'm curious, and maybe this is like a more in the weeds question, but you're talking about sentiment and measuring that, but what does that look like from a tool perspective? And can you maybe walk me through the tech stack a little bit?

EFL: Yeah. So, imagine mapping out cities, social media, landscape, social media, local media, online conversation all of the pages and groups and accounts and hashtags and everything.

And that picture makes up the online conversation that's happening in the city. Once you map that out, you get access to a very, wide, very strong collective consciousness of the community and of the different population that could be different pockets of communities, including, by the way, communities that are Somewhat removed from government, usually communities of migrant workers, or communities of people that don't speak the local language.

J.T.: Yeah. The communities that fall through the cracks of measurement seem to always pose an issue. Like in the U.S. with our census and getting accurate counts is so important because it's like really hard to track these big populations that aren’t super active in local government or stay under the radar a bit.

EFL: When you think about the census example, think about how many communities don't trust the government enough to let a government, a representative, knock on the door and report information back to the government.

For example, on platforms like social media, like Facebook or Twitter, connecting with one another and talking about their day-to-day life is common practive.

So Zencity maps out all of these conversations, and then we train models to recognize what these conversations are talking about and what are they positive or negative sentiment in their essence. And that could vary very widely, right?

 It's not just people tagging the, I know official Twitter handle for the City of Syracuse and speaking their mind, it can be somebody uploading a selfie to Instagram and saying what a wonderful day at the park they're having, or on the other hand, somebody tweeting about them hating to be stuck in traffic, or somebody writing a long post on Facebook about how much they love their kindergarten teacher and what a big change they made in their kid's life. 

All these things are valid feedback points to the work of government on some level or another, right?

So parks and recreation department or the transportation department or the school district and the teachers within it. We loop in all these conversations. We recognize which topic they're based on and  our models are trained on millions and millions of examples from these specific topics.

And then we recognize if the sentiment that's being shared in them is positive or negative towards the work of this organization or city. And that's how we aggregate. 

We can show the trends like are people talking about something more positive, like talking about it more or less talking about it more positively or negatively; what is driving both the positive and negative conversation based on popular keywords, clusters of the same story?

J.T.: That's so interesting. And I feel like, I don't know a trend that I'm noticing with a lot of my recent conversations and a thing that I'm thinking about and probably also because my graduate studies is a lot of economic development is that so much of economic development from the local perspective is storytelling.

For example, it's marketing to win development grants and to help  align the capital and stakeholders to do these big capital projects. 

I feel like your tool plays into that because you're looking at the conversations in real time to help leaders make better decisions.

EFL: That’s right. For example, just about the economic development use case that you shared. The City of Fort Lauderdale, one of our personal favorite customers and a great city, with fantastic leadership. They had a great plan to build a soccer and MLS stadium.

It was one of the last large pieces of land owned by the city. And this was a great capital project related to the city manager, deputy city manager. We were strong believers that it will drive a lot of great benefits for the local community. And as the city leadership was working on pushing this Capitol project throug there was a small group of what we call the vocal minority that came to protest in every city council meeting on every occasion. 

And one of the city managers, we work with calls these types of groups, the STPs, the same ten people that always show up at every city council meeting every community hearing.

And these people shared very negative sentiment towards the project on a recurring basis. And every meeting and when the city council was supposed to vote on the project, not all city council members felt comfortable approving this. 

What the city saw is there's a great capital project because of this ongoing objection and what the city leadership did in those cases, they actually downloaded a data report from our platforms that shows that there was much more engagement online about the project and that majority of that engagement was significantly positive.

And they shared that quantitative data. That helped the city council get comfortable with the idea that this project actually is in the best interest of the community and represents the community well. Subsequently, they approved one of the largest capital investments of the city in years.

So I think I think that's a great example directly into what you're saying about how sometimes. When we think about the landscape of a local government, about the ingest of all elected officials, sometimes vocal, minority skew, the results, not in favor of the community at large. 

Hopefully, our tools increase to some extent that intake funnel of voices and feedback and allows us to hear what the community on a wider scale is thinking about things like capital investment 

JT: projects. That's awesome and so I'm curious, and maybe this is like a unique perspective that you can offer because  you're based in Tel Aviv. How would you describe how cities in Israel function compared to U.S. cities?

EFL: There are small differences. For example, if we compare, the city's in Israel are charge of education. There's no school district, but cities are not in charge of public safety. The police is a national organization. This just as an anecdote, I remember when we started working in the U.S. for the first time we saw that our product didn’t pick up conversations about snow removal — because there's no snow in Israel.

So we didn't have a category defined in our model for snow removal and we saw that need to come up with that for our Northeast customers that started working with us. So I think there are some nuances, but the interesting takeaway for me was all the similarities.

When we started, we had our first six, seven cities here in Israel before starting to market in the U S. We had a big question mark, on whether all of our assumptions about local government from Israel would replicate themselves in the U.S., and we were overwhelmingly surprised by the fact that this sheer challenge of listening to the community at large is something that city managers across the world are feeling whether they call them city managers, like in the U.S. or city CEOs, like in Israel or executive directors, as our customers in the U.K. do.

They all share this same challenge of hearing the community at large.‍

JT: I love that point because I don't know. And I think urban problems and are very similar and go across cultures.I think Singapore is a great city that has done a lot of great stuff, and it's used as a model, but the question I always come back to is does it work in the context of U.S. policy?

And that's where I don't know. It does seem to be the hard part at least in the U.S.

EFL: So, one of the things we started doing recently is facilitating peer learning between the localities we work with. Now that we have about 200 agencies working with us, we can start to do two things, facilitate and be a fly on the wall in rooms where local governments meet up to share learning.

For example, we organize events for counties under a hundred thousand residents that work with us that share similar challenges of being smaller counties. We also organize roundtables for college towns that work with us to talk about the shared challenges of college towns and things of that nature.

It's just general challenges that they're facing. And this to me was what was exciting. And the other thing we did with starting to allow our customers to see some benchmarking data. So, for example, think about one example that comes to mind was mask mandates.

If you are a city in Arizona and that there's a 30% negative sentiment towards the masks mandate that your mayor is trying to approve in the city council is good or bad, it’s something that you need to be worried about or something that you need to be focused on.

We help contextualize that we would always tell you no comparison to other things. This is more negative or less negative relative to other conversations in your city. But now we can tell you in comparison to other cities in Arizona, you're actually much more positive on the masks mandate.

So, that ability to give context, I think speaks to what you were saying about that ability to learn about solutions from other places So if we take a city that we know is doing a good job on parking or on bike lanes or, on any other topic, we can see what's driving the positive sentiment there.‍

J.T.: No, that helped me to understand that relationship a lot better. So I don't want to take up too much more of your time. What time is it there in Tel Aviv right now? 

EFL: Just past 11:30 PM. ‍

J.T.: Ah, yikes that is late. So what didn't I ask you that I should have? What did I miss here? 

EFL: The last big thing we just announced is that we've recently acquired a great company called Elucd.

They were based in New York so we opened officially our New York office with that acquistion. But more than that, the exciting thing about the acquisition is that we are actually getting a new type of methodology for listening to the public here. We're for the first time mixing between proactive serving, which is the classic way in which you get community feedback, and that organic listening capability that we’ve been providing our customers for the last few years.

We're rolling out to our customers and to other local governments, the ability to mix these two into one with technology and get the best of both worlds in my opinion. I feel like with the mix of these two tools into one, now we're creating a whole that is larger than the sum of its parts and providing something that's much more close to a holistic approach to sentiment

So, I'm excited to see where a lot we've just rolled it out to the first four or five cities that will now be joint users of both tools and hopefully we can see that impact and roll it out to other places as well.