What’s next for civic tech?
3 recommendations to the ecosystem for a better future
The civic tech ecosystem is playing an important role in the future of democracy in the Internet era. We are currently envisioning a shift from a traditional world centered around institutions, to a new model of society more citizen-centric where civic tech is included in the toolbox of all the actors, from citizens and organizations to governments:
- Open Data services (catalyzed by organization like Code for America and startups like OpenGov) are enhancing the transparency and trust relation between governments and citizens
- Bottom-up platforms working at a global level (Change.org) but also local (Nextdoor) are amplifying the voice of citizen and grassroots, enabling them to act collectively.
- SaaS companies offering all the tools for organizations to better manage their campaigns and volunteers (NationBuilder), and even advocacy (FiscalNote)
Looking back at the last five years, the civic tech ecosystem has been characterized by a bubble of early overexcitement, that led to a refocus of the main investors and enablers on smaller portfolios with higher chances of success. In the end, building a civic business is different from in other sectors in terms of go-to-market strategy, speed of operation, fundraising and partners to interact with.
Both entrepreneurs and enablers are now developing more sustainable civic tech initiatives while the ecosystem is restructuring and stabilizing. The various possible models are starting to generalize, and the model is about finding the balance between independence, impact, and sustainability.
We are currently at the edge of a Third Act for Civic Tech. The ecosystem is has finished its early phases and now has to gain in maturity. But a big problem remain: it is a fragmented ecosystem in terms of projects, investments, and infrastructure disabling the opportunities of replication and scale.
Fragmented projects
A remarkable aspect of civic tech is how many local small initiatives exist. In all the major cities exist micro companies or organizations trying to experiment with tech with their local population. Of course, deploying solutions locally should not be refrained. It shows the vitality of the ecosystem, and small administrations such as cities are more agile and conscious of their population than the federal or national institutions.
But this habit gets problematic when it leads to a bad acculturation of the ecosystem. Many of those small initiatives are initiated off the grid, without conversing with the existing actors. The result is an overwhelming quantity of unsustainable projects unlinked to each other. Entrepreneurs simply give too much consideration to ownership, and everybody wants to start his own initiative.
In the end, collaboration and mutual help are compromised. The ecosystem is swarmed with projects and is everything but united. Few actors (Accela, NationBuilder) are big enough to be able to become the platforms unifying and scaling the movement but they haven’t created the cohesion needed and their integration possibility are not wide enough yet.
Fragmented funding
As the civic tech sector is still really early, very few companies emerged and managed to successfully grow over the years. The private funding market is locked by a handful of companies attracting most of the capital (even though the amount collected is not significant compared to the total impact investment).
By contrast, as many initiatives are emerging, the number of grants and public funding has exploded, making the environment propitious for kickstarting and seed raising. Corporates now love to fund civic tech projects because of its double value in terms of marketing: social and innovative. The capital is most of the time injected in the best-looking projects with the most attractive social impact goal, and very little attention is given to the business and sustainable aspect of it. And more, as in most corporate innovation enablers, the focus is on helping new initiatives launch and do their first steps. No structure or resources is possible as a follow-up. The projects are simply given up once they able to stand up, despite the fact that the real difficulties start at the growth phase.
This is the civic tech paradox, i.e. an ease to launch initiatives but a strong difficulty to scale and take the projects to the next level in terms of ambition and business model sustainability. There is a general shortage of operating budget, making it difficult to maintain the best people devoted to the projects, even part-time as well as for volunteers.
One could easily consider that this vitality in seed stage is not the best scenario but is still always good to take. But the ecosystem is suffocating from too many projects empowered while not facing the right direction. Providing even more grants with no real outlook is only exacerbating the situation.
Fragmented infrastructure
Because of the importance of going local and the fragmentation of the ecosystem, civic tech startups have no choice but to replicate instead of scale, leveraging the digital infrastructure of cities. They are exporting their model and technologies from one to another, and this process is extremely painful. Cities are really difficult to deal with in terms of culture and speed of operation. If they now understand better the importance of a digital transformation, their data and processes are still not standardized. Integrating a solution requires almost handwork. And on top of that, each city does only add little value every time.
One could say the same thing happens with ordinary startups going B2B, but the difference is that going for small businesses bringing little value is fast and easily replicable while going for slow and difficult big corporations brings enormous value. In the public sector, you have to work with actors with both disadvantages: small in terms of value, and slow in terms of sales process.
Nonetheless, the situation is evolving. Many cities have launched new structures and hired new people to shift their culture. But a lot of work needs to be done to standardize both data and processes.
3 recommendations for the ecosystem to grow
In regards to this fragmentation issues, I would formulate 3 recommendations for the 3 main enablers of the ecosystem:
- For corporates and foundations: Create consortium providing bigger grants
Foundations and corporations should unify their funding offers to turn the overwhelming number of small grants and aids into a smaller number of bigger funding opportunities. Many startups have the potential to have a sustainable impact but don’t have the chance to convince with ordinary venture capital fundraising. The consortium could also be beneficial in terms of communication and value created for the corporations, as it adds a perception of corporate collaboration on top of social impact and innovation. - For public administrations: Standardize the approach towards startups to facilitate replication
Governments should receive the adequate formation for engaging with startups and external providers for a smoother collaboration. A startup kit could be shared towards cities, as well as templates of contracts and agreements in order to simplify the processes. A digital transformation needs to be achieved to make the IT infrastructure aligned with the new technologies and languages and the data aggregated available in a common and usable format. - For startups and organizations: Unify the ecosystem to enhance scalability
The ecosystem is lacking of designated leaders able to openly partner with any civic tech company and share their data and network for better scalability. This is especially the case for the bottom-up sector which still has no open platform with a significant amount of users.
This article is the second piece of a series on the future of civic tech and citizen engagement.
It completes my study “Can Civic Tech Save Democracy? How technology is renewing civic engagement” written for L’Atelier BNP Paribas and published last December.
This story is published in The Startup, Medium’s largest entrepreneurship publication followed by 286,184+ people.
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