#StartupsEverywhere Profile: Philip Peters, Founder and CEO, CitiQuants
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Using Cities’ Data to Optimize Business Decisions
Miami-based startup CitiQuants uses “decisional data” on cities’ livability, workability, sustainability, and governability assets to help other startups and established businesses make important hiring and expansion decisions. The focus on city-level data has also pushed the company to start developing tokenized city stocks that can be used to generate public investments in local communities. We spoke with Philip Peters, CitiQuants’ Founder and CEO, to learn more about his startup, his PEV Token concept, and steps that policymakers can take to support growing startups—particularly those affected by the pandemic.
What in your background made you interested in becoming an entrepreneur?
As a young kid growing up in the Caribbean, I was engaged in my parent’s laundry, spice, and ship building business. Since they had an entrepreneurial spirit, entrepreneurship came easily to me—and I enjoyed it. After my Carnegie Mellon University Summer Graduate PhD Fellowship, I went to work as a derivative trader in Chicago. Working at the intersection of data and capital markets fascinated me, and I loved developing modeling strategies.
I subsequently founded the Peters Group, a boutique derivative introductory brokerage clearing house, and also worked for Telerate and MyCity. And then I launched my own firm, Zagada, as a research analyst practice engaged in advising companies on global location expansion. So CitiQuants — a SaaS enterprise data startup—was a spinoff of Zagada, and it became operational in 2017.
Can you tell us a little more about CitiQuants and the work that you’re doing?
CitiQuants takes cities’ data and converts it into data assets. Our framework captures four city data assets: Livability, Workability, Sustainability and Governability. Our first product is SmartBench™, which takes cities “workability” assets—essentially, their talent and economic pricing data—and algorithmically generates talent-pricing benchmarking for enterprise clients. We call this process Data Driven Economic Development (DDED), and it allows startups and established businesses to more easily make business location decisions. This is basically “pricing” a city, and it allows us to provide clients with information about cities where they might want to expand their operations or open a new office.
Our second use case takes all four of the data assets mentioned above and creates a valuation of the city. This is sort of like a FICO score, and it allows us to trade cities as a tokenized stock on the blockchain.
We see cities as being like sovereign firms, with their own individual portfolio of assets. By creating this tokenized city stock—known as a Perceived Economic Valuator (PEV) Token—we allow cities to launch and sell tokens on a blockchain exchange. This is similar to how cities sell municipal bonds to fund their services. This model allows cities, for the first time, to capitalize themselves and increase public investments by using tokenized equity. The public can also invest in these tokens and generate capital gains from cities asset management performance.
How do you use data to help startups make decisions regarding their business locations?
We serve both established businesses and scaling startups. Our SmartBench product becomes valuable when a startup is looking to expand to a second city or multiple locations, and needs reliable talent pricing and talent density benchmarking analysis. Rather than using large consulting and advisory firms that are costly and can take a while to provide feedback, our Zoe engine can deliver talent and location pricing benchmarks in seconds.
Companies use us to get fully loaded cost analysis of cities, which includes data on basic wages, statutory costs, market-competitive hiring costs, and other talent-related operational costs. Both startups and established businesses need to get the total expansion cost in order to accurately plan out their corporate expansion budgets.
How has CitiQuants been affected by the coronavirus pandemic, and are there any steps that you believe policymakers should take at this time to further support startups?
The pandemic has slowed down new expansion activities, so it’s had a negative impact on that part of our business. However, new talent demands—especially when it comes to remote talent density analysis and wage localization—are data points being added to our platform and crunched by our Zoe engine. As you must have seen, adjusting wages for employees leaving Silicon Valley and New York for less expensive cities have become a big issue. Our platform allows us to deliver this type of talent location cost and density pricing intelligence to customers.
On the policy front, the startup community needs to go on the offensive and make Congress and policymakers understand the differences between small businesses and startups. They are two different animals, but they’re often conflated. This distinction should be carried over to the Small Business Administration, especially with regards to adjusting collateral requirements for loans—particularly in our current pandemic state. And SBA policy adjustments should also consider IP, valuation, and sweat equity as assets for loan consideration.
What are some of the startup-related policy issues and concerns that you believe should receive more attention from local, state, and federal policymakers?
We should take a second look at the financial tax incentives for angel investors and VC funding for the different stages—including from the seed round through Series A-D funding rounds. Certain markets, particularly tier two and tier three city hubs, attract early-stage capital, but A+ round capital gets more challenging. In the same way the JOBS Act decentralized accredited investor participation, incentives need to be expanded.
Finally, policymakers need to embrace and accelerate decentralized blockchain policy. Apart from state-level efforts in Wyoming, the U.S. is lagging behind, and other countries are way ahead of us. If we want to compete with China, which is already moving forward with its own digital currency, then we need to have a broader conversation that brings together opposing sides in this country to discuss how we can use blockchain technology and digital assets to effectively compete in the changing global economy.
What is your goal for CitiQuants moving forward?
Our immediate goal is to become the most visited platform for businesses and startups looking to address their talent and location pricing needs. However, our big vision for the future is to trade cities as tokenized stocks. Ultimately, we plan on leading with the creation of a new decentralized financial system for cities by taking cities data, both tangible and intangible, pricing them, creating a valuation for them, and then trade cities as tokenized stocks on a decentralized exchange.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email edward@engine.is.
