Five tips for cities to attract innovative startups to urban challenges

Opening up data doesn’t automatically lead to a better public service delivery. Cities should know that, when looking at public service innovation, there are several benefits to applying a challenge-driven approach. Rather than simply opening up public data, a well-defined city challenge can mobilise and guide solution providers to develop data-driven products that are more aligned with city ambitions, recent examples of which are described in more detail in this previous insight.

by Judith Schuermans, Simone Ploemacher & Sebastiaan van Herk

Once the specifics of the urban challenges are clearly set out, there are several ways the challenges and their corresponding data sets can be presented to the market. One possible next step is to promote them via an open call to which solution providers like start-ups can apply. Bax & Company has gathered the best practices and lessons learnt from both cities and solution providers through European projects like SCIFI and BE-GOOD. Having worked with cities on a variety of challenges meant we were able to see what does and doesn’t work. From clearly defining the challenge to making sure you’re reaching the right audience, it became clear that some cities had a better strategy to launch the call. Learning from them and following up with both successful and unsuccessful solution providers, we were able to compile a list of lessons. This knowledge can prove especially useful since small- and medium-sized cities often lack the resources (whether that be manpower, expertise and/or money) to promote their open call.

Here are five of the key lessons we’ve learned so far:

ACCURATELY PRESENTING THE CHALLENGE IS KEY

To submit a strong offer, it is important for startups to fully understand what the city aims to solve. Therefore, it is required to define a clear context description of the challenge, expected outcomes and results, and keep up to date on the availability status of the datasets needed for the startup’s data-driven solution.

Besides these descriptions, a city might want to consider providing extra information via webinars or a video including the challenge pitch. Furthermore, there should be a specific online location listing solution providers’ FAQs and answers relating to the challenge and application procedure. Startups appreciate knowing up front who will be the responsible city official to guide the startup during the challenge and what their role is within the city. Providing this kind of information up front will mean city officials end up having to field fewer questions further down the line.

PARTICIPANTS HAVE TO KNOW WHAT’S IN IT FOR THEM

Cities are advised to focus on what other benefits startups can expect on top of financial compensation when working on a challenge with a city. One advantage that startups consider particularly valuable is the network support that helps increase their (international) market. Cities can connect startups to their network of stakeholders and other cities (networks). Furthermore, cities can offer benefits like improving the understanding of problems and context of cities as clients, and in long-term collaboration with the contracting city to possibly implement the solution developed in the pilot phase. In SCIFI, startups also receive training from experts on topics such as design-thinking and open data portals.

It’s especially worth underlining these additional opportunities when promoting the open call if a limited budget is available. To boost the attractiveness of the open call, cities should make sure these benefits are made as tangible as possible and emphasised in the communication of the open call.

REMEMBER THAT MOST STARTUPS HAVE A LIMITED CAPACITY

While startups can develop a solution for a city, they often do not have the same amount of capacity as well-established companies and corporates. Cities should bear this in mind in setting up the open call.

Application: To encourage more startups to submit a complete application, it is recommended to make the most effective application procedure possible. Cities have to carefully think about what information is really needed to select the best startup for the assignment while also meeting legal requirements. This means that the scope of the assignment should match the investment in the application process. Furthermore, the information should be as clear as possible to avoid possible doubts while applying. Just in case, an easy point of contact should be provided for startups to reach out to.

Solution development: Even though cities most likely have (internal) restrictions around the solution development, it is good to leave some flexibility for the startup on how they would like to work on the solution in terms of timing. When can they start? How long do they need? Startups cannot always shuffle resources and you might, therefore, lose relevant solution providers that cannot deliver in the timeframe you request. On that note, it is also important to remember that the city itself should also have enough resources available to work together with the startup and make sure they can move forward in developing the solution.

THE RIGHT COMMUNICATION STRATEGY TO REACH THE RIGHT AUDIENCE

The work for cities does not stop once the challenges have been defined. Making sure that the open call reaches enough relevant startups requires a well-structured communication and dissemination strategy. Cities should include channels which startups use to look for open calls. Some examples are:

• Local (business) networks such as a regional startup ecosystem. Cities should actively engage with these networks’ members — for example, by promoting the open call in their newsletters.
• International startup platforms such as F6S can help cities to target those startups that fit your challenge based on information provided.
• Search engines. Startups use specific keywords to find open calls. That’s why cities should invest time in optimising the keywords used to describe the open call.

Besides the different channels, there are also other questions to take into consideration for your communication strategy. Do you only want to work with startups from your region or do you think about taking it to an international level? Do you only want to target specific startups or do you have a wider scope? Based on the answers to these questions, you can adapt your strategy to your needs.

DEFINE CLEAR EXPECTATIONS, BUT LEAVE ROOM FOR INNOVATION

In an open call, it is important to keep a balance between a clear statement of expectations while also allowing enough scope for the startup to take the lead and innovate. Defining the expected results from the start is important for cities to increase their chances of hiring a startup with a suitable solution. Not stating clearly what the needed outcome is could lead to undesirable results for the city.

On the other hand, asking for results that are too specific might scare off solution providers with innovative ideas. Sometimes, expecting very specific results is similar to defining the solution before procurement, as opposed to the challenge you aim to solve. You might miss the chance for a new and innovative solution, a fresh perspective that you hadn’t considered. In a similar vein, it is also important to keep your expectations in check when it comes to impact and outcomes, by being realistic about the scope of the assignment. You cannot expect ambitious results with a small project (or budget).

To counter this, cities can leave room for dialogue with the startup once they’ve has been selected for an interview after the application process. Even when defining the conditions and contract after the selection process, it is worth to have a kickoff conversation and make sure the expected outcomes are aligned. For example, the city of Delft and the startup Quantillion (working together on a de-icing prioritisation challenge) solved their initial differences by explicitly communicating and negotiating the final results before starting the solution development.

PUTTING THE FINDINGS INTO PRACTICE

In June 2019, the second SCIFI open call will take place, in which these best practices and lessons learned will be implemented. We will continuously reflect on the whole process of an open call to continue developing the methodology.

If you want to find out more about challenge-driven innovation and improving the liveability of cities with open data, get in touch. We build on our experience from challenge-driven data-innovation projects we created such as BE-GOOD with Rijkswaterstaat, SCIFI with the University of Southampton, and SCORE with the City of Amsterdam.

Originally posted at https://baxcompany.com/insights/ on 7 May 2019.