San Francisco has brought innovative tech firms together with public servants to solve policy problems. The project created a simplified bidding process to remove barriers that were preventing small tech firms from getting involved in the public sector. It brings in specialist non-profits to give start-ups support and expertise to help them adapt to this new area.
Results & Impact
In the latest round, over 260 start-ups applied to take part. Out of 20 start ups that have participated so far, 15 have received government contracts to develop and provide their product on a longer term basis. Examples include an app that simplifies the application process for foster parents and a data platform that centralized the collation of information across San Leandro Recreation and Human Services Department’s 5,000 programs.
San Francisco Mayor’s Office of Civic Innovation, Departments of participating city governments, startup technology firms, Nasdaq Entrepeneurial Centre, Civic Makers, Impact Hub SF, Runway Incubator, Wearable IoT World Labs
The STIR program engages with government departments and tech firms to simplify the bidding process at both ends. Government departments work with STIR to turn their challenges into realistic tenders over a month, using a standardized format that can be met by all selected firms. Start ups receive support and training throughout the 16 week process and collaborate closely with government departments to deliver bespoke software systems tailored to the problems those departments are facing.
San Francisco, US
Government departments and tech-startups
Cost & Value
In 2016 San Francisco received $474,453 from the federal government to fund Start up in Residence for three years.
Running since 2016
Although STIR has had a significant impact in reducing the complexity of government procurement procedures, the contracting process has not been modified or tailored for start-ups. Contracts are frequently 50 pages long with inaccessible terminology, designed for lengthy negotiation periods and requiring sizeable legal departments. This is an area San Francisco authorities have recognised needs reforming as well.
Amsterdam, The Hague and British Columbia have all launched their own version of the Start up in Residence program, retaining the original STIR template
A government initiative to harness technological developments for policy challenges has engaged an array of tech-start ups with the public sector in San Francisco.
The Start-up-In-Residence (STIR) program brings together small tech firms and government agencies in a 16-week program to develop new technology to solve policy challenges. STIR works with government officials to develop workable requests that can be delivered within the time frame. In doing so, STIR is able to simplify the application process for companies and stimulate interest from firms normally put off by the complexity of federal bidding procedures.
“One of the barriers to entry for start-ups is that they really don’t know how to sell to government,” said Jay Nath, Chief Innovation Officer for San Francisco. “So we looked at how we actually get them to understand government. How do we get them to understand what our needs are? Our pain points? This is information that’s often a dark art and we want to shine a spotlight on this and make it readily accessible to everyone and anybody that wants to work with government or who is in government and is looking to become more entrepreneurial.”
STIR has delivered substantial efficiency improvements for local government agencies. 75% of departments have decided to continue their partnerships with their tech partners following the conclusion of the projects. Notable results include a mobile application for prospective foster parents that reduced demands on social workers by 20 to 40% and a data compilation platform that facilitated easy management of San Leandro’s Recreation and Human Services Department’s 5,000 programs.
“You bring the right people into the room, the stakeholders who deeply understand the problem, and then you bring in entrepreneurs who can really help address those issues through technology,” said Nath. “And that can happen in a very collaborative way and a very fast-paced way as well. There’s something really powerful about working hand-in-hand with start-ups and government. It seems like a very radical idea; taking two organisations vastly different and putting them together to create so much impact and value.”
Central to STIR’s effectiveness is its “RFP bus.” This refers to a standardised, simplified Request for Proposal format specifically tailored for smaller start-ups. By creating a unified format for proposals and requirements, shortlisted firms are able to bid for different departmental projects without encountering distinct and cumbersome logistical constraints.
Rather than having detailed technical requirements, as is typical in RFPs, the new proposal system requires firms to respond to two challenge statements. One focuses on the nature of the company applying while the other outlines the problem an agency is facing, without prescribing any particular requirements for the solution. The lack of specifics reduces barriers for applicants while increasing the potential for innovation.
Combining what would have ordinarily been 20 RFPs into a single document greatly reduced the administrative burden for applicants, enabling them to complete the process in no more than an hour. Departments were able to complete proposal requests in a matter of days and received far greater choice across all projects. In 2014 alone, over 200 start-ups applied to take part.
The assessment process placed significant emphasis on the characteristics of applicants, compensating for the reduced level of detail in the RFPs. This included their knowledge of the problem area, the applicability of their existing services to the problem, the calibre of their team and how successful they had been.
The RFP process also helps start-ups overcome one of the key challenges of working with government: the uncertainty of the procurement process. By moving the RFP to the beginning of the process, it creates a clear process for working with the government agency in the long-term.
“What happens normally is that at the end of pilots there really is no meaningful pathway forward,” said Nath. “The government partner often doesn’t have the budget or hasn’t addressed some internal politics. So you’ve got a great proof of concept but no meaningful way to move that forward. By moving the RFP forward to before the pilot, start-ups know that after they get selected there’s nothing really standing between them and a contract.”
Start-ups also benefit from tailored support provided by STIR’s partners. Although a government initiative, it relies upon collaboration with non-profit and private groups to provide firms with the assistance they need. Each firm receives a mentor, courtesy of the Nasdaq Entrepeneurial Centre, with experience in public sector projects to provide ongoing support and guidance. STIR also builds on the work of the Impact Hub, a global network of entrepreneurs and creative professionals who seek to provide the resources needed for projects looking to drive innovative change. Civic Makers, a locally based company focused on the human-impact of public policy, provide assistance to help start-ups effectively address the needs of their government agency. Support is delivered through a series of workshops and training runs throughout the process.
The training includes a curriculum, developed in partnership with the Nasdaq Entrepreneurial Centre, to help start-ups understand the mechanics of working with government. It addresses questions such as adjusting sales cycles and how to create value for the public sector.
As well as changing attitudes among entrepreneurs, the scheme aims to build a culture of innovation within government itself.
“We all know that old saying: no one got fired for hiring IBM,” said Nath. “And we want to change that to say by working with a startup, you might get promoted. We want government to not see it just through the lens of risk, but through the lens of opportunity.”
One of the ways STIR made agencies receptive to the idea was by getting them to focus on the ways technology could be of value to them in their daily activities. By starting the conversation with their own needs, it helped create the sense among agencies that STIR could be an opportunity to make their lives easier.
STIR is run out of the Office of Civic Innovation, established by city authorities in 2012 to take advantage of California’s technological expertise. After a successful pilot in 2014, the scheme received federal funding and will run until at least 2018. Despite initially including only six firms during 2014, the program attracted over 260 applications in 2016, with 14 selected to take part.
STIR is an annual program that operates between May and October, during which firms have 16 weeks to build platforms that solve challenges set by government agencies. The scheme culminates in a demonstration day where teams showcase their projects across participating agencies, with interested external parties also invited to attend.
STIR’s initial success has also prompted interest from elsewhere, with Amsterdam, the Hague and British Columbia rolling out their own versions using the original STIR template.
(Picture credit: Flickr/Batul Das)