For San Francisco, and governments everywhere, technology startups are the perfect partners

A recent article in the New York Times describes SMART Muni, “an Apple iPad app that uses Global Positioning System technology to track all of the city’s buses in real time, allowing transit managers and passengers to monitor problems and delays”. It sounds like the perfect success story: civic coders taking open data (Muni tracks its buses and trains with NextBus, which provides an XML data feed) and using that data to improve operations and create real value for the agency.

Unfortunately, it’s not a success story: the app has never been used in production. As the article explains, “Muni hopes to put the app to good use some day, but the agency is $29 million over budget and cannot afford to buy the iPads required to run the software…[nor] is the city willing to invest $100,000 to run a pilot program.”

The costs involved here—a few hundred dollars each for some iPads, perhaps a few thousand dollars to fund a stipend for a civic coder, even $100,000 for a pilot—pale in comparison to the costs associated with the big-name IT consulting firms that governments are used to dealing with.

In addition, startups, teams of civic coders, and open source projects can often deliver a working prototype or even a completed project much faster than conventional development teams. As the New York Times describes, “a small team of volunteers took just 10 days last summer to create [the app].”

Unfortunately, the City of San Francisco is out of touch with the realities of technology: “‘Start-ups fail at a high rate,’ said Jay Nath, chief innovation officer of San Francisco. ‘As stewards of taxpayer dollars, we need to be thoughtful of using that money wisely and not absorbing too much risk.'” Nath is right about one thing: start-ups do fail at an alarming rate. But that’s not the risk you might think it is, because startups aren’t like conventional development projects.

Unlike conventional projects, startups fail fast. Instead of wasting years and millions of dollars, when a startup has an idea that isn’t going anywhere, it winds up quickly. Maybe it was a bad (or even outright infeasible) idea to begin with, or the startup had the wrong team, or they tried to do too much at once. Maybe their idea’s been superseded by a newer, even better technology. Whatever the reason may be, the startup doesn’t just grind away for years, running up a million-dollar bill. Instead, they admit that they can’t deliver, and get out gracefully.

Consider, for example, the FBI’s Virtual Case File, a five-year, $170-million development effort that never actually delivered any working software. Imagine if the VCF project had failed after three or six months, not five years. Imagine if it had spent less than a million dollars before failing, not $170 million. Of course, the project still wouldn’t be done—but we’d have known that something was wrong up front, instead of finding out five years later, after millions of taxpayer dollars had been wasted on a doomed development effort.

More importantly, startups do have the agility necessary to keep up with the ever-changing technology marketplace. A development effort that takes five or ten years is bound to deliver a product that is obsolete as soon as it arrives, unless major changes are made along the way.

The conventional development practices used by many government agencies and their contractors don’t incorporate that kind of agility. Specifications and requirements are written early in the project’s life, perhaps even before a development team has been selected (if the project must be put out for bids). Even if the requirements are found to be lacking—or flat-out wrong—development marches on. In the end, the team will deliver a product that meets the requirements (thus satisfying the bean-counters) but which is already out-of-date and which doesn’t actually do what users need it to do.

I alluded to these problems in my recent coverage of WMATA’s initiative to install real-time information displays at bus stops. By only considering bids from vendors with “standard, proven products” and “successful existing and fully operational implementations, in multiple transit agencies”, they potentially shut out innovative startups (or even teams of civic coders, like the Mobility Lab).

It’s entirely possible that the first team to tackle a thorny problem may fail—but rather than casting them as “failures that burn holes in the city’s budget”, we’ve got to communicate to governments and taxpayers alike that not all failures are the same. There’s a big difference between a project that runs for years, spends millions of dollars, and has nothing to show for it in the end, and a project that fails after just a few months, has spent well less than a million dollars, and can identify what went wrong, so the next project will be more successful.

When it comes to technology, the best way for governments to be good ‘stewards of taxpayer dollars’ is to adopt successful development practices: small, agile, competent teams, that build inexpensive, flexible products, and fail quickly if they can’t get the job done. The old way—forking over millions and millions to high-priced contractors until they finally declare defeat, then taking it up in a years-long legal battle—just doesn’t look like good stewardship anymore. Sure, established companies may have a long track record that startups don’t, but what’s it a record of? We don’t need any more million-dollar failures. We need smart civic coders developing next-generation solutions like SMART Muni, and we need governments to accept, embrace, and support them.