Building a Solid Foundation for Partnerships

Cities, startups, and other stakeholders should take deliberate steps to signal that they’re open to partnering with each other to build urban resilience. the steps in this section can help both sides build a solid foundation for partnering.

Startups should adapt solutions to partners with different needs and circumstances.

Every city has its own needs and economic circumstances. A technology’s implications may be radically different in the Global South vs. the Global North. Startups looking to build resilience in the Global South therefore face a unique set of risks and opportunities. to succeed in the Global South, startups must do more than create software solutions: they must understand the unique budgetary and administrative challenges that cities in the global south face. These unique challenges also allow for unique opportunities: where cities in the global south may lack resources, they also can be a blank slate for innovators. Witness, for example, how countries like China, Kenya, and India have created mobile payment platforms far more advanced than those used in the developed world.

2018 Summit participant Pune came to CityXChange looking for new solutions to the City’s sanitation issues. The City invested heavily in building state-of-the-art solid waste processing facilities, working with global partners. Several of these facilities operate well below capacity, because the plants didn’t consider local needs. Pune worked with Banyan Nation, a startup participant, to develop new ideas for how to better track waste collectors to improve efficiency and better segregate inorganic waste, organic waste, and recyclables.

Startups should get serious about sharing the wealth that innovation brings.

To succeed long-term, urban innovations need to benefit all citizens, low-income citizens and tech entrepreneurs alike. Transportation technologies like ridesharing, dockless scooters, and others can help all citizens, by offering last-mile connectivity and reducing the number of cars on the road. Startups should lead on proposing public policy regimes that create win-win outcomes, but many, unfortunately, view cities’ efforts to ensure broad benefits from innovation as shakedowns. If cities are going to let tech startups experiment in the public way, citizens need to benefit. For startups, this may mean finding ways to contribute to infrastructure costs, or finding innovative ways to serve disabled or low-income citizens.

[We allowed startups to use] our public right-of-way as their factory, [and we thought] there would be a benefit back to society from that, and not just a benefit to their financial investors. We weren’t trying to shake them down, because that’s how it gets interpreted
– 2018 City participant

Cities should convene local tech communities to discuss resilience challenges.

The tech industry can’t solve problems it doesn’t understand, while traditional procurement still sets up obstacles to conversation, rather than facilitating dialogue. programs like CityXChange provide a crucial global opportunity for cities to discuss their biggest challenges with leading tech founders and funders, but cities need to start that dialog with their local tech communities as well. Cities should convene local innovators, building relationships and beginning the dialog about how tech can solve local problems. without these relationships, city/tech partnerships can rarely develop. City stakeholders like procurement officers, city attorneys, good government groups and the press should be included in these convenings, so that they too have a stake in the partnerships that develop. this process will be particularly crucial for the 100RC member cities that are currently considering how to incorporate technology into their resilience strategies.

We’re saying to that innovator community, “Look, we need to know more about what tourists want to do in our city. We need to know how we’re going to solve antisocial behavior in some of our shared open spaces in the city. Can you help us to do that?”

– 2018 City participant

Cities should form Venture Capital advisory committees.

Startups often have a difficult time getting on cities’ radar screens, while cities often don’t feel they can trust small startups for critical functions. VCs are in a unique position, with visibility into the capabilities of hundreds of startups and insight around a range of implementation and partnership models. they can provide cities valuable advice for identifying and incubating resilience technologies and helping find the potential paths to implementation. Cities should consider forming technology advisory committees or finding other ways to leverage both local and global VCs to help source technology and create fast- track processes to implementation.

Cities and startups should both bring third-party stakeholders into the conversation early.

Few city leaders want to take the risk of being the first to implement a new technology, which accounts for some of cities’ aversion to technology. on the other hand, third-party stakeholders like large employers, foundations and even labor unions often love the opportunity to demonstrate support for innovation. Cities and startups should look to bring in third-party funders to pay for deployment of a new technology. In high-income countries, foundations often play this role, whereas international development organizations like USAID are increasingly focusing on funding innovation in the developing world. When working with a third-party funder, however, cities and startups must plan for how they can keep the project going without external financial support.

2017 CityXChange Summit participant Premise Data successfully partnered with USAID and the city of Cali, Colombia, to deploy its software to help the City track mosquito-borne illnesses like Zika. The initial development was funded by USAID, with input from stakeholders in Cali. Now that Premise’s program has been successful, they are looking to transition to a sustainable funding model with Cali.

2018 startup participant Urban Footprint described how it partnered with Honolulu to determine the impact of Oahu’s proposed new transit line, which was controversial and opposed by many environmental groups. The startup worked with a coalition to quickly build a series of quantitative scenarios for how the island would be impacted by the transit line. The models demonstrated changes in land use, carbon emissions, and water use, and household expenditures, transforming what had previously been an ideologically-driven debate. Urban Footprint’s data became a key organizational tool that eventually convinced the environmental groups to support the project, transforming the debate.

Cities and startups should both create a “zone of trust.”

Startups need to demonstrate to cities that “VCs and tech leaders aren’t martians,” and vice versa. too often startups don’t bring their ideas to cities, fearing that they are unintentionally (or perhaps intentionally) violating a regulation and will be forced to shut down. Conversely, city leaders believe that tech leaders are all looking to get something for nothing and not share profits with taxpayers. To encourage innovation, cities and startups must create trusted and open communications channels with each other. CityXChange can help serve that function at a global level, but local tech communities need to build direct relationships with the cities that host them. Frequent cross-pollination is key, because innovation and resilience shocks both happen quickly.

When Lyft began operating in California, it received multiple “Cease and Desist” letters from government agencies, including the California Public Utilities Commission (PUC). 2017 CityXChange Summit participant and Lyft CEO John Zimmer saw the letters as an opportunity to sit down with the PUC and address the Commission’s safety concerns, but at first the regulators refused to even meet. Only through being persistent was Lyft able to meet with the PUC and explain how their safety record was better than the incumbent taxis’.

Cities and startups should both plan for scale.

Cities and startups often start a relationship with a limited pilot. while pilots can be valuable in many instances, cities and startups need to play for success. many startups jump at the opportunity to pilot a technology with a government grant; then once grant funding dries up, they find themselves without budget for a roll-out. In other cases, pilot programs are successful, triggering a public procurement where the startup has difficulty competing.

For true success, cities and startups must consider long-term revenue models and city-wide scale, even if they’re years off. If cities don’t get a share of the success, startups risk being accused of getting a sweetheart deal, and cities may lose interest or motivation after the initial pilot phase. Discussing profit-sharing up front can help ensure the long-term success of a pilot.

One CityXChange 2018 participant discussed work she’d done with the City of Boston, which recently negotiated data-sharing agreements with the rideshare companies. Though that agreement, Boston realized that it had a staggering 80 million rideshare trips in 2017, yet the City had not changed its operating models at all since the rise of Uber and Lyft. Because cities and rideshare companies failed to plan for scale, they failed to settle on long-term, mutually beneficial regulatory structures: witness New York’s recently implemented rideshare cap.

[Our city’s car share program] already had a revenue, rather than grant-funded model. This ensured the business model was right-sized initially and could grow with business growth, rather than grant funds. Anecdotally, startups operating primarily on grant funding do not do as well.

– 2017 City participant