Checklist: How Cities Can Work with Startups

By Andrew Watkins COO, Marketplace City

Cities are constantly trying to broaden their network of companies as partners and suppliers.  In that attempt more cities are seeking to work with startups, which offer a different value proposition and one that city leaders find increasingly attractive.  Startups are often:

-        More innovative; they offer a new way of attacking a problem

-        More nimble

-        Willing to try/test/pilot small projects because of lower overhead

Technology startups in particular tend to be a boon for local ecosystems thanks to their propensity to deliver higher than average economic growth, offer competitive wages and attract high skilled workers.

Of course engagement between cities and startups has its own set of challenges .  Cities tend to be concerned about the risk – both of a company’s’ ability to survive and of the reliability of the technology. For startups, working through standard public procurement can often be prohibitive.  It can cost upwards for $1.5M for a company to respond to an RFP and the process can sometimes last two years!  Most startups don’t have that runaway to focus on a single pursuit.

But there is hope! Cities are tackling this problem head on. Here are ways to create a win-win.

Create Structures to Engage

Most public-sector supplier and procurement processes are designed for large projects and commodities – building roads or buying fuel.  But evolving technology and startups don’t fit that mold. To balance required transparency and the desire to engage innovative startups, cities must create programs and structures that mitigate risk for them but move quickly to decision.

Kansas City has a formal startup program with access to city officials, data and technology over a fixed period.  New York and Dublin have created programs to run paid challenge pilots with startups.  Atlanta has dedicated a physical space where technology can be tested.  These give startups clear paths and action to engage the city and a chance for the city to verify results for themselves.

Reduce the Burden

Startups don’t have extra resources or expertise to deal with the time and cost to compete for a traditional a government contract.  That leads most to not participate, which ultimately is not a good result for the city, as it limits the supply of good ideas and new technology that can move a city forward.

Dallas and Chicago have set up public-private partnerships with pilot authority that allows companies to engage faster with standard structures.  Multiple cities are reducing the time from idea to contract by leveraging other city’s pilot results, experimenting with shared RFI’s across jurisdictions and finding validations or contract information for new technology.

Find the Startups

With limited resources, scouring government websites for opportunities is prohibitive for any small company.  Government officials need to take the first step and build a community.  Find local incubators and co-working spaces, create urban technology meet-ups and clearly post information. 

Chicago has a large weekly event focused on civic technology and open data.  New York sponsors various urban tech incubators and many of the leading mayors/CTOs/CIOs are getting out in the entrepreneurial ecosystem to encourage working with government. In a complex space, a little effort goes a long way.

For a few examples of organizations that are putting various parts of this checklist into action check out New Urban Mechanics for dedicated smart city personnel; Dallas Innovation Alliance for Public Private Partnerships; UILABS in Chicago and NYCx for frameworks and legal models; Kansas City and the City of San Francisco for “fast track” processes; Atlanta, Kansas City and Cary, NC for testing tech in the built environment; Boston and Philadelphia for procurement innovation; Arizona IDP for stakeholder engagement; Chicago, New York and San Francisco for start-up culture and Dublin, Barcelona and Manchester for global networking and best practice sharing.

Learn more about what steps your local and state government can take to encourage startup engagement through the City + Startup Checklist.