From state capitals to the halls of Congress, interested parties have long tried to predict which of the many bills introduced during legislative sessions will actually become law.
It’s not an exact science, but a fledgling company is making it a more precise one.
FiscalNote, founded last year in the shadow of Capitol Hill, has developed an analytics platform that uses artificial intelligence to crunch state and federal government data. Their software then forecasts trends and outcomes that can help clients make strategic decisions around, say, whether an anti-fracking bill might pass the Colorado legislature.
“We’re able to forecast with a high level of accuracy whether a bill will pass,” says Tim Hwang, the company’s CEO. How high? More than 90%, he says.
Hwang, 22, says he was inspired to launch FiscalNote after a precocious youth spent forming charitable organizations, filling a student seat on his Maryland county school board and founding the National Youth Association, which advocates on issues affecting young people.
“I found it increasingly hard to get answers to basic questions about what was going on at governmentsaround the country,” says the Princeton University graduate. “There’s 50 different governments and 50 different ways of publishing (and formatting) data.”
Despite competition from such rivals as Bloomberg and Thomson Reuters, Hwang figured there must be a market for a service that used computer algorithms to glean useful insights from the vast amounts of government data posted online.
So he recruited two high school buddies and moved to Silicon Valley, where they spent the summer of 2013 building FiscalNote’s platform while holed up in a Motel 6.
Hwang’s impressive pedigree helped them land $1.3 million in seed funding from such heavy hitters as Dallas Mavericks owner Mark Cuban and former Yahoo CEO Jerry Yang. They’ve since moved back to Washington, raised another $5 million-plus and begun attracting big clients, including 12 Fortune 500 companies.
FiscalNote’s main product, called Prophecy, is the legislative-analysis tool. Next year the company plans to introduce Sonar, which will apply the same principles to regulatory agencies such as the FDA and EPA. A pharmaceutical company, for example, would pay handsomely to know whether their new drug is likely to get FDA approval.
Hwang also sees huge potential in analyzing data from foreign governments, which he says can be easier to access than in the U.S.
His primary goal, he says, is to make arcane information about government processes more useful.
“Building a modicum of predictability or transparency into the system changes the game for a lot of people, ” he says. “It’s a challenge I feel very passionate about.”
Ivy League wunderkind invents cutting-edge technology company in his dorm room. Recruits genius buddies to help him. Works around the clock out of a motel in Silicon Valley, developing his secret sauce.
Big-name investors come on board. Company starts growing. More investors pile in, smelling a fortune to be made.
This isn’t Mark Zuckerberg. And it isn’t Facebook.
It’s Tim Hwang. And the company is FiscalNote.
The 22-year-old entrepreneur uses data-mining software and artificial intelligence to predict the fate of the 200,000 to 300,000 bills proposed by state legislatures and by the U.S. Congress each year.
Let’s say Massachusetts is considering a bill that would change the way pharmaceutical waste is disposed, which could have dramatic effects on medical businesses. FiscalNote predicts whether the bill will pass.
FiscalNote claims an accuracy rate of more than 90 percent.
Hwang is replacing humans with computers and software. What else is new? He has already raised $1.3 million from the likes of Dallas Mavericks owner Mark Cuban, who chipped in $740,000. Yahoo co-founder Jerry Yang, Chevy Chase-based venture capital firm New Enterprise Associates and others invested the balance.
He is about to close on additional funding of as much as $7 million from investors.
“The traditional way of getting this information was to go through the Washington-insider Beltway network, lobbyists, politicians,” Hwang said. “But I thought there was a computational solution we could use.
“Three hundred reporters sitting in a room trying to turn out reports is not a very quantitative process,” he said. His competition includes reporter-heavy companies such as Bloomberg Government, Thomson Reuters and LexisNexis.
The company, headquartered across from Metro Center in downtown Washington, has 30 clients, including Planned Parenthood, the University of Virginia Law School, the New Balance shoe and apparel company, the Natural Resources Defense Council and both the Republican and Democratic governors associations.
FiscalNote has no debt and expects to earn revenue in the mid seven-digit range next year. Hwang said the company could be profitable if it were not reinvesting in growth. He said his 27-person staff will double by early next year.
Hwang and his band of 20-something quants built a software “crawler” that automates the information gathering traditionally done by teams of policy analysts, lobbyists and researchers.
The data includes demographic information about electoral districts, lawmakers’ voting history and campaign finance reports. Hwang’s algorithm then crunches the data to determine the chances of any given bill becoming law.
The name comes from the fiscal note often attached to legislation, which analyzes the financial impact on the government treasury or its taxes.
Hwang grew up in Potomac, Md., the son of Korean immigrants. His father is a biophysicist. His mother was a small-business owner and art teacher before both parents moved to Colorado, where his father heads a group for the National Institute of Standards and Technology.
Following a church trip to Guatemala when he was in eighth grade, he became interested in community affairs and started two charitable programs when he was in his early teens.
One, called Operation Fly, filled backpacks with school supplies and distributed them to homeless children. He ran another program, called Sheets for Streets, that gave packages of toiletries and blankets to homeless people during cold months.
By the time he was a senior at Thomas S. Wootton High School in Rockville, Hwang was spending most of his time on community work. He was elected to the student seat on the Montgomery County Board of Education at 17. He finished his course work at Princeton in three years.
“I’ve always thought academics to be more of a reflection of a challenge,” he said. “I work hard.”
He volunteered on Barack Obama’s 2008 presidential campaign, starting in the field, going door to door and managing phone banks before gravitating toward the data side.
FiscalNote grew out of his work at Princeton, where he founded the National Youth Association to advocate on issues affecting young people, such as health care, immigration reform and Pell Grant funding.
From his years on the Board of Education and at Princeton, he wanted to find a way to crack and synthesize the deluge of information from governments around the country.
“We had serious challenges trying to understand at a basic level what was exactly going on in the government, not just at federal levels but at the state and local levels. When I was thinking about the policy functions, there was a lot of opportunity to apply quantitative and computational methods that could really provide newer insights into some of these problems.”
In 2013, he called a couple of boyhood friends, Jonathan Chen and Gerald Yao, and told them of his idea for FiscalNote. Chen became chief technology officer and Yao is chief strategy officer.
They received $25,000 from Plug and Play Tech Center, a Sunnyvale, Calif., accelerator that helps start-ups with funds and expertise. The three techies went to California, where they holed up in a Sunnyvale motel and started coding like mad.
They hit a breakthrough within months.
Hwang e-mailed Cuban in August 2013, which led to the investment. Yang put in money after one of his team scouted Hwang’s presentation at a Bay Area event.
FiscalNote moved back to Washington, where the team worked out of Bethesda for a few months.
The company offers two subscriptions. One is a basic plan that charges clients $500 per month for the first user and $100 for each additional user. A premium package includes more bells and whistles.
The company follows all 50 state legislatures and Congress, and in February it plans to launch a new product that monitors federal regulatory activities at the Labor Department, the Department of Health and Human Services and the Environmental Protection Agency.
Hwang said his success is attributable to both luck and hard work.
“The best entrepreneurs start companies that are a reflection of what they’ve done for the last couple of years. There is no way Facebook would have started anywhere other than a college campus. It was a perfect storm.”
AS THIS year’s congressional elections in America steadily draw closer, incumbents and hopefuls running for office are planning to spend billions of dollars on their campaigns. Much of this cash will be spent on paying savvy analysts to use big data to forecast how undecided voters will cast their ballots in November. But in this year's campaign, the trend also seems to be going the other way. Rather than forecasting how ordinary voters behave, firms are now offering to make predictions, based on analysing big data, of how the various candidates would vote if elected to Congress or a state legislature.
These sorts of services are part of a wider movement to increase government transparency, by making it easier to access and analyse government statistics. For instance, OpenGov, a web-based tech firm, gives users access to vast amounts of state and local-government data. Yet even with the help of such services, the sheer volume of information on offer is ovewhelming to most individuals and companies. So a new breed of firm has come along to fill a gap in the market, by processing the data to predict the voting patterns of legislators.
One prominent example is FiscalNote Prophecy, a web-based service, sold on a monthly subscription basis by FiscalNote, a start-up founded last year. The company claims that its self-learning algorithm can—based on public data such as legislative votes, electoral statistics and campaign-finance figures—predict, with an accuracy of over 95%, the outcome of bills in Congress and state legislatures. Another is the Georgia Legislative Navigator, a website owned by the Cox Media Group, a publishing firm. It offers a similar, free service, albeit focused solely on legislative proposals in Georgia's General Assembly.
The aim of such services is to offer guidance on the likely outcome of the thousands of bills that are introduced in Congress and state legislatures every year. Users can search through bills in different policy areas to find those that are of greatest interest. The forecasted probability of passage helps them to decide which bills to keep an eye on. In addition, individual legislators’ success rates in getting bills passed are also reported, which can give a sense of who might be a good person to approach to get a bill on a specific issue introduced. These sorts of predictions appeal to a wide range of subscribers. Conservative groups, for example, can follow the lives of same-sex marriage bills and plan their opposition accordingly; business managers can forecast whether and when regulations that will affect their operations might be passed. FiscalNote claims that its clients include Fortune 500 companies, and even prestigious academic institutions interested in influencing public policy.
Other firms are hoping to offer similar services outside the world of politics. Estimize, a start-up founded last year, uses data from over 4,500 sources in the financial sector to produce predictions of earnings and other figures for listed firms. Its latest service, Mergerize, which was launched earlier this year, uses a similar method to predict how likely it is that a takeover bid will be made for a listed firm over a certain period.
Although many of these services are still being beta-tested, their boosters hope that they will gradually become more accurate. FiscalNote hopes that within a few years their self-improving algorithms will evolve to the point where they are accurate over 99% of the time. If that is achieved, such firms will not only send a shiver down the backs of legislators, but business executives as well.
Bethesda, MD -- FiscalNote, Inc. announced today that Alec Ross, former Senior Advisor for Innovation at the State Department, has joined the company’s board of advisors.
One of the premier voices for innovation in government, Ross brings a wealth of experience building and communicating the power of transformative information technologies.
“I’m thrilled to join FiscalNote’s board of advisors. By pushing the boundaries of technological innovation with government data, FiscalNote will help better connect the governing and the governed. I look forward to working closely with the company as it rapidly grows and continues to break barriers.”
Prior to serving as Senior Advisor for Innovation to former Secretary Clinton, Ross played a key role in bringing together President Obama’s team of policy minds during the 2008 campaign. He also co-founded One Economy, a company that strives to connect low-income people across the world to important information and resources. He is currently writing a book about the industries and businesses of the future published by Simon & Schuster.
FiscalNote CEO Tim Hwang noted that “Alec Ross will be a tremendous asset to our team of advisors. His understanding of how to effectively implement and market disruptive technologies will be crucial in the drive to make FiscalNote the leader in helping organizations understand and analyze government action.”
FiscalNote Prophecy, a real-time, online platform that tracks, monitors, and predicts the outcome of state legislation, revolutionizes the way organizations understand and engage with state government. Traditional methods of organizing and understanding legislative data have proven to be slow and costly. By aggregating and presenting the many different pieces of legislative data from across the country onto its online platform, Prophecy provides the tools for effective and efficient decision making.
FiscalNote was founded in March 2013 by Tim Hwang, former president of the 750,000 member National Youth Association. Co-founders include CFO Gerald Yao and CTO Jonathan Chen. Ross joins former White House Cabinet Secretary Chris Lu, Elsevier Chairman Y.S. Chi, and LegalZoom CEO John Suh on the advisory board. FiscalNote is backed by Mark Cuban, NEA, Jerry Yang's AME Cloud Ventures, and First Round’s Dorm Room Fund.
Washington, DC - FiscalNote, the real-time government analytics platform, announced today that it raised additional capital for its seed round from Yahoo Co-Founder Jerry Yang's new fund, AME Cloud Ventures.
"We're very excited to add AME as an investor in our current round," Tim Hwang, CEO of FiscalNote said, "When they approached us, it really was an opportunity we couldn't refuse."
AME will be joining an already packed list of investors that include Mark Cuban, NEA, and First Round Capital's Dorm Room Fund.
Washington, DC - FiscalNote, the real-time government analytics platform, has raised a $1.2 Million Seed Round from Mark Cuban, NEA, and First Round Capital’s Dorm Room Fund.
Co-founded in March by Tim Hwang, former President of the 750,000 member National Youth Association (NYA), along with Gerald Yao and Jonathan C. Chen, FiscalNote provides real-time analysis on state and local government actions using machine learning and natural language processing to reduce political risk and provide for real-time decision-making customized to each enterprise. FiscalNote is targeting the $30 billion government analysis and compliance industry, and plans on changing how government data is organized for enterprises.
Through its PoliticalGenome Project, it has built out one of the world’s most advanced legislative/legal language models and a complex political graph aggregating information on key decision makers, electoral districts, and changing regulations and laws in real-time. One of the key products that FiscalNote has developed is an algorithm that is able to predict the likelihood of a bill passing, pushing the envelope on real-time analysis.
FiscalNote boasts an impressive advisory board that includes Chris Lu, former White House Cabinet Secretary and advisor to President Barack Obama, Youngsuk “Y.S.” Chi, Chairman of publishing giant Elsevier, and John Suh, the Chief Executive Officer of LegalZoom. Equally impressive is their veteran team that hails from Bloomberg, Thomson Reuters, NASA, Square, Microsoft, Sprint, and LivingSocial.
FiscalNote will be using their round to build out a full-scale natural language processing and machine learning team, now a team of nine, and expand into new industry verticals in the United States and around the world (the EU, Brazil, etc).
FiscalNote organizes the world’s government information by aggregating silos of unstructured government data and news from around the web and telling executives at the center of government uncertainty what changes are coming. One of the key products that FiscalNote has developed is an algorithm that is able to predict the likelihood of a bill passing, pushing the envelope on real-time analysis.
Most state and local government information comes in the form of unstructured data whether it is legislative text (over 200,000 bills proposed across all state legislatures), regulations, court cases, and speeches. While local newspapers and legal firms have traditionally done the work of analyzing and reporting the impact on enterprises and organizations, they have realized that their methods are too costly and slow. As a result, the industry is receding and ripe for disruption as law firms shed government practices and newspapers go bankrupt. FiscalNote aims to turn the policy world on its head by providing a platform for real-time government analysis.
FiscalNote is in the middle of a closed beta that boasts several clients among general counsel and marketing departments in Fortune 500s, national advocacy groups, and financial institutions. Subscription pricing is based largely on the number of users and amount of government relations activity done by an enterprise.
According to the National Federation of Independent Businesses (NFIB), the largest concern among small businesses after healthcare and energy costs was “Uncertainty over Government Actions.” With over 100 enterprises already in its waiting list in industries ranging from car-sharing services to pharmaceuticals, FiscalNote provides a real-time and relevant solution for one of the largest problems facing organizations today.
Sunnyvale, CA - FiscalNote, Inc. announced today that Chris Lu, former White House Cabinet Secretary and advisor to President Barack Obama, and Youngsuk “Y.S.” Chi, Chairman of publishing giant Elsevier, have joined the company’s Board of Advisors.
FiscalNote is a platform for real-time government analysis that aggregates, analyzes, and predicts government action. FiscalNote is backed by the Plug and Play Startup Camp.
"This is an exciting project that has the potential to revolutionize the way that businesses and advocacy groups learn about state and local policy," said Lu. "I look forward to lending my expertise to this effort."
“I’m delighted to be joining FiscalNote’s Board of Advisors,” said Chi. “FiscalNote’s vision for the government information market is both compelling and needed. I look forward to working closely with this team of young entrepreneurs.”
As advisors, Lu and Chi will lend their expertise to FiscalNote’s mission to disrupt the way local and state policy news travels to policy makers, stakeholders, and financial markets.
"Working with Chris and Y.S…they’re some of the most insightful people in the industry and we’re thrilled to have them on our team” said Tim Hwang, CEO of FiscalNote.
Most state and local government information comes in the form of unstructured data whether it is legislative text (over 200,000 bills proposed across all state legislatures), regulations, court cases, and speeches. While local newspapers and legal firms have traditionally done the work of analyzing and reporting the impact on enterprises and organizations, they have realized that their methods are too costly and slow. FiscalNote aims to turn the policy world on its head by providing a platform for real-time government analysis.
Founded in March by Tim Hwang, former President of the 750,000 member National Youth Association (NYA). Co-founders include Gerald Yao and Jonathan Chen. FiscalNote provides real-time analysis on state and local government actions using machine learning and natural language processing. FiscalNote is targeting the $30 billion government analysis industry, and plans on changing how government data is organized.