Innovation 101: A Municipality’s Guide to Working with the Startup Community

7 Steps to a Successful Collaboration

In 2016, the City of San Francisco welcomed the startup community with open arms as it searched for answers to one of its most pressing civic challenges. Through involvement in a 16-week collaboration program matching municipalities with startups to solve civic issues, the city was fortunate enough to be introduced to the startup “Binti”. The program’s streamlined process allowed Binti to clearly understand the city’s issue and expedite the implementation of their solution. The city’s challenge was simple, they needed to develop a platform that would simplify the process to become a foster parent. Here are the results from Binti’s software solution:

● 50% reduction in time required to approve applicants

● 300% increase in number of applicants who want to foster children

● Saves social workers 20%-40% of their time

● 31 other municipalities purchased the Binti software.

It’s cases like this that show how governments, faced with organizational limits and a risk-averse culture, have much to gain from their more flexible counterparts in the private sector. Innovative collaborations between the two sectors can, and have already led to, a multitude of new ventures that not only foster business growth, but also aid in the solution of civic challenges. The concept of innovation is no longer bound to organizations seeking profits; and governments now want in on the action as well. All that said, not all collaborative initiatives are similar in success. After analyzing numerous cases demonstrating such collaboration, we believe that there are a few common practices that governments should understand in order to successfully incorporate an innovative collaboration program. Take a look.

1. Simplify the Procurement Process

Securing work from a governmental agency can be rather confusing and unnecessarily long. Companies often have to communicate a pitch to a multitude of groups in the government all while waiting months with the chance of not even obtaining an awarded contract. Cities must attempt to find ways in which the process can be expedited and made more efficient. The goal is to encourage new startups to seek access to government work as well as provide easier access for startups already in the search.

Program: Accreditation@SGD, Country: Singapore

The Info-communications Media Development Authority in Singapore developed Accreditation@SGD to evaluate and accredit worthy companies in the high-tech ecosystem. If an agency is looking for a solution that one of their accredited startups provide, they will attempt to procure from them first. The goal of the program is to help Singapore-based companies win government projects as well as grow in the global market. Within the first three years of the program, Accreditation@SGD generated roughly $80 million for the companies accredited stemming from the 120 projects won. Fifteen companies have secured $68 million in new growth capital and three have had exits by acquisition.

2. Beneficial Partnerships Begin with a Clear Understanding of Municipality Issues

Efficiently allocating municipality resources is of the utmost importance when investing in collaborations with the startup community. In order to do so, municipalities must have a clear understanding of what issues are most pressing to their local citizens and businesses. Clarity on all fronts will lead to maximum effectiveness. Simply put, make clear to your city what the most pressing challenges are so that all stakeholders are on the same page.

Program: Startup In Residence, City: Hague, Netherlands

The city of Hague, located in the Netherlands, sponsored an accelerator program in which they clearly outlined the nine most pressing challenges faced by their city. The city then presented these challenges to startups, inviting them to come up with innovative solutions. In a year-long contest, proposals submitted by the startups were ranked. The highest-scored teams were granted an opportunity to closely collaborate with the municipality to develop a prototype for presentation to the public by the end of the year. In the 2016 competition, a mobile app fighting trash pollution and waste was developed, leading to a cleaner city.

3. Begin with Small Scale Projects

Small scale projects that are lean in nature are much more manageable for city municipalities, especially from a budget standpoint. As opposed to focusing on large projects that cover a multitude of issues all in one, cities should attack the specific problems that are the most pressing to their residents. Not only does this force resources to be properly allocated, but the small projects also give local leaders a sense of ownership. Local leaders feel much more incentivized and responsible to make the initiatives successful. Small scale projects also involve less stakeholders, allowing for a quicker implementation of the solution.

Program: Digital Leaders, City: Tayibe, Israel

Just over a year ago, the Tayibe municipality lacked an efficient system for residents to submit hazards and complaints. At the time, residents had to either visit the municipality in person or spend an unnecessary amount of time on the phone with the call center. Licompass came in and developed a CRM based platform with an app so that residents could finally submit complaints and hazards in a digital manner. Simple enough. Since it was a small-scale project, it was developed and started functioning right away. Half a year later, the municipality and Licompass revisited the solution to evaluate the project and its impact. From there, new features were added, e.g. a main dashboard for the municipality. The municipality surely had many issues that could have been improved, but it didn’t start with tackling their service-related challenges all at once. Instead, it focused on a small problem that made a big difference. From there, Tayibe officials were able to understand the project’s strengths and weaknesses and develop additional features, making a true impact on the community.

4. Adopt, to Some Extent, the Entrepreneurial Culture of a Startup

Government agencies, historically, have proven to be risk-averse in nature. With good reason, governments tend to invest in low risk projects with safe returns. However, in order to successfully foster a municipality-startup collaboration, the municipality must be willing to experiment, at least at first. Allow for a change in culture and accept failure.

Program: TreePhilly, City: Philadelphia, Pennsylvania

The city of Philadelphia, located in the US, led a project called TreePhilly in efforts to plant more trees throughout the city by posting the project on a crowdfunding platform. The program failed to reach its fundraising goal. However, as government officials made clear, the failed trial introduced different departments to newly found funding sources while at the same time showing officials how crowdfunding must be targeted to a more specific community to increase engagement. The pilot actually paved the way for a multitude of additional municipality-startup collaborations such as Community Garden.

5. Appeal to The Startup: How Will They Benefit?

The municipality-startup collaboration is a win-win for both sides! Especially for startups and entrepreneurs, these partnerships can lead to access to new customers and/or markets, accelerated procurement processes, and great networking opportunities. Tax incentives may be viable as well. Now, cities have begun framing these challenges as actual opportunities for growth, further incentivizing startups to engage in the solution. At the end of the day, not all tech startups are looking to be actively involved as a social responsibility platform, so give them a reason to be. Not to mention, some innovative programs ran by the public sector are purposed primarily for business growth.

Program: FastFWD, City: Philadelphia, Pennsylvania

The City of Philadelphia runs the FastFWD program, which not only provides 12 weeks of training to entrepreneurs but also provides financial support. Since May 2014, the first 40 entrepreneurs to go through with the program have, in total, raised over $40 million in capital for their companies. Programs such as these are great sources of funding. Not to mention, the programs also surround you with like-minded entrepreneurs to network and generate ideas with.

6. Invest in Your Data Infrastructure

Data sharing and consumption are at the forefront of today’s technological society. It is imperative to understand what data is available so that tech startups can best aid in solving the municipalities’ pressing issues. Municipalities must develop a strong data infrastructure to provide centralized management of data and make it easier for external developers to create solutions. API’s should be utilized to provide data access for startups without having to be in touch with the municipality to ask for it.

Program: The Office of New Urban Mechanics, City: Boston, Massachusetts

The Office of New Urban Mechanics in Boston, Massachusetts, has been making a key effort to share city data with its residents such as pothole requests and crime incident reports to allow anyone to use it in the development of new products. Similar to clearly defining the issues at hand, municipalities must understand what data they have available in order to invest in the proper sectors with the right startups.

7. Internal Innovation is Key

Before any external success can be achieved, internal innovation capabilities must be developed. Whether it is data-driven or not, an innovative culture stemming from within will trickle down to a smooth and more successful external program.

Program: Free Agents, Country: Canada

Canada’s Free Agents program was designed to motivate internal innovation. The agency noticed an issue with recruiting and retaining talent in their public sector due to the notion, false or true, that the public sector provides fewer opportunities with less flexibility. In response, the government used the program which created a new position known as a “free agent”. These workers have the ability to undertake a variety of projects and pick and choose what work they undertake. Studies have shown that job satisfaction and enjoyment for these workers is considerably higher than average, leading to more workers wanting to stay in Canada’s public sector.