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Scrum Studio Holds Inaugural SmartCityX Conference Featuring Panel to Discuss the Future of Cities

By Michael Proman, Scrum Studio

In July, the Scrum Studio team hosted our first in-person SmartCityX Conference at The Chase Center in San Francisco to celebrate the achievements of the second successful year of Scrum Studio Inc’s SmartCityX. SmartCityX is an immersive startup program aimed at helping seed- to growth- stage companies advance smart city product and business development through in-depth collaboration with leading corporations, including East Japan Railway, Idemitsu Kosan, Japan Post Co., Ltd., and Japan Airlines Co., Ltd., as well as technology experts and investors from Japan and worldwide.

This year’s program included 96 startups from 20 countries looking to transform the way we live, learn, and work — particularly in the fields of Consumer Products and Services, Mobility, Smart Buildings, and Connectivity. In addition, recognizing the critical role technology plays in helping cities reach net zero emissions by 2050, the program seeks cutting-edge innovations in the areas of Sustainability and Climate Change.

At the event, nearly 200 founders, VCs, and companies gathered alongside executives from major corporations.

One of the highlights of the event was a lively panel discussion on the future of cities that shed light on how investors and municipalities are working with startups to integrate new smart city technology into cities during challenging times. Moderated by Axios reporter Kia Kokalitcheva, the panel featured Jim Adler, Toyota Ventures Founding Managing Director, Stephen Forte, Managing Partner, Fresco Capital, Robin Abad Ocubillo, City of San Francisco, Director of Shared Spaces and Clay Garner, Chief Innovation Officer & Director of the Mayor’s Office of Technology and Innovation.

Following are some snippets of the panel discussion.

On the impact of Covid…

Jim Adler, Toyota Ventures

There used to be this adage that venture capitalists would not invest in a startup if they could not drive to it. I think the pandemic changed that. Now you need to know the folks you’re investing in, but you don’t necessarily need to be with them in person all the time. This has unlocked a talent pool worldwide. Talent is here, and it is now evenly distributed. It’s the capital that’s not evenly distributed. And I think there’s a pandemic dividend, and I don’t think that’s going away. The Bay Area isn’t the only place to find startups and great, talented, tenacious entrepreneurs.

Robin Abad Ocubillo, City of San Francisco

A lot of the work that I do takes place in the public realm. It’s all about our streets, our sidewalks, parks and open spaces. Its shared space, but at the same time, is a really contested territory. Shared space has a lot of functions or a lot of municipal functions, demands transportation goods, movement, etc. And yet, it’s probably the single biggest opportunity to bring people together. Before the pandemic, San Francisco had 60 parklets. A parklet is where you take a parking space from the street, and you convert it to some other use. So in San Francisco, that has looked like turning them into small parts of our system. You can imagine, merchants believe that everyone arrives at their store via car, and we just know that that’s simply not true. When the pandemic hit, one thing that we were forced to do was figure out how we can move safely out of doors. We were facing the implosion of our small business sector and our neighborhood-serving businesses here in San Francisco and many other cities around the world. So we scaled up our programs to enable business and commerce to happen outdoors, which actually was not city policy before COVID.

I think one of the biggest surprises about the pandemic was that we had to fight almost every single merchant on the block in order to convert a single parking space into a public asset. We now have merchant associations everywhere wanting to close their entire streets. So there’s been a huge shift in perspective, and unfortunately, it took a pandemic for folks to understand the real value of that space could be not only for their bottom line as a business but all of the social outcomes all of the social and neighborhood resiliency outcomes that have resulted from that. We’re operating in a whole new paradigm now.

Clay Garner, City of San Jose

I was most surprised by the flexibility and agility in the cities. For anyone who works with cities, you know that these are not traditionally very fast. And back in January and February 2020 when we started seeing the pandemic on the horizon we actually dusted off a “what to do in a pandemic” brochure that the city had paid a consultant to write a couple of years before. It outlined steps one through five. By stage five, it’s like widespread community transmission, basically call someone else because you are in trouble. How do we ask people to show up to work every day in this condition? We created logistics engines for things that we never even did before, like delivering 200 million free meals in San Jose. We’ve never done meal delivery before. So I think the pandemic really just changed my opinion about how to move in a time of crisis. And now it’s about how we institutionalize that flexibility long term to take about your next disaster or economic crisis, whether that is part of today’s planning. Resilience is key.

On what are the next 12 months going to look like…

Clay Garner, City of San Jose

We are looking to better understand where the current gaps in our city service and our economic equity. In a financial crisis, people who are our most important customers are low-income working families. Those are the ones getting hit by the gas prices, layoffs, and inflation. Right now, we don’t really have a great system for understanding if we’re actually having a really positive outcome for those individuals. So one of the things that we’re working towards is the city-wide data program around being able to measure the performance of our services and identify those gaps and rectify them. Of course, thinking about that very concept of privacy transparency around you know, better data evaluation of those outcomes.

Robin Abad Ocubillo, City of San Francisco

We are trying to understand and stay clear about who needs the most help, understanding how we can continually tailor city services city assistance programs, and ensure that we’re using this as an opportunity to help level the playing field. A big part of that is understanding who we are impacting and not impacting.

Thinking about urban structure and urban form- we have this formula that we’ve adopted in many cities. It's a concentric city where everything takes place in the central business district, and everybody commutes in. That’s the pattern that we see, and that was always unsustainable. It was created due to difficulties around the jobs-housing balance. I think San Francisco has done an incredible job by trying to make sure that a lot of the new housing development has been within the orbit of downtown. For example, Mission Bay, that is right adjacent to downtown, is been a huge residential development. We’ve been really smart about that locally, but in the region overall, it’s still an issue.

We have this infrastructure that doesn’t really suit our economy and there’s no denying the fact that there’s a huge paradigm shift. So we are trying to pay attention to how we keep our downtown infrastructure, the relevancy of that infrastructure, and looking at land use and land use policies to try and encourage building things other than an office in the future.

Stephen Forte, Fresco Ventures

All VCs are familiar with the concept of institutional gaps. In plain English, it means there are gaps between large institutions and the marketplace. We look at institutional gaps between stuff that Microsoft and Oracle are building and what the customers actually needed. And it’s the same thing when you’re investing in areas that intersect with cities, you look at the gaps and institutional gaps between the cities themselves and then the folks that are moving into the cities to work and live and COVID and inflation have caused even more institutional gaps. We are out there looking for those institutional gaps, and it’s the folks in the cities that can actually help us identify where those opportunities are.

Jim Adler, Toyota Ventures

I think that we got to be careful that we don’t overlearn the last set of lessons. I remember when scooters were considered a disrupting nuisance and cities really wanted to crack down on them. We now need different ways to get around cities. Our view is that most different modes of micro-mobility will continue to make this city and all cities really, easy to travel and traverse and connect until those institutional gaps are gone. I do think that there are some big changes coming around the way we use energy and the way we grow food. And that is going to fundamentally shift the way cities operate and the way we access energy.

Examples of the intersection of technology and cities really working well…

Robin Abad Ocubillo, City of San Francisco

Without mentioning a specific example, procurement reform doesn’t sound that exciting. So I use the word organization reform. It’s just so core to being able to do meaningful partnerships with the private sector, trying out technology and being able to understand the ROI of those technologies, and then be able to make an investment decision on that. A lot of cities have policies where they can do the demonstration of a technology, but there’s no evaluation method. There’s no follow-on policy for procuring something not in the pilot stage that was super successful. So I think it’s structural, and cities are starting to come around to this idea that, in order to go to work with the best companies and the best minds need a slightly different way of thinking about procurement.

Jim Adler, Toyota Ventures

I think that cities are getting smarter, but startups are getting smarter too. And I think this projects in a couple of different ways. Cities are getting more accepting of innovation. And startups are getting more respectful of those that they need to work with in city governments. We have a company called Rebel, which you might see there are their mopeds rolling around San Francisco. Their biggest footprint is in New York City. And they’ve established an incredibly good working relationship with with with their city where they operate, but it hasn’t been smooth sailing; it’s kind of been bumpy, but I think what’s happening is there is this symbiosis that’s developing between the innovators in on the city side and the startups that recognize that cities can be an incredible partner to delivering value to their citizens, stakeholders, and startup customers. And I think that’s been a delicate dance.

I think the pandemic has rocked everyone. I’m an electrical engineer by training. And so when you want to see the dynamics of something, hit it with a sledgehammer, and you’ll see whether you’re hitting a battleship or a skateboard. And the pandemic was a sledgehammer that in our society, and you’re seeing everyone react to that to that impulse. Initially for bad, but ultimately for good. I think we’re all becoming more resilient and more respectful because I think it’s a good thing. Good political thing.

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We are an early stage venture firm. With experience and networks in both Silicon Valley and Japan, we help our portfolio companies achieve global opportunities.