Govtech Fund Managing Partner Ron Bouganim (Photo: Code for America)
I’m always inspired talking and working with entrepreneurs trying to solve big civic problems, especially those who realize much of the challenge lies within modernizing and empowering internal government operations, so it was great to finally meet with Govtech Fund Founder and Managing Partner Ron Bouganim this week.
Govtech Fund aims to “harness the power of transformers, technology, and capital to help government become more efficient, responsive, and better able to serve society.” Bouganim has raised $23 million to make this happen, and the fund has made five investments to date, including SmartProcure, Mark43, SeamlessDocs, AmigoCloud and mySidewalk (formerly MindMixer), with a sixth soon to be announced.
Bouganim differentiates between govtech and civictech, the former focusing on internal agency technology infrastructure, or the “government operating system,” such as procurement, permitting, GIS and fraud detection, and the latter being citizen-focused services.
What strikes me about Bouganim, besides the fact that he’s helping to build a Mandarin immersion school in San Francisco, is his complete focus to the government technology sector, from educating other venture capitalists on the space to managing deal flow and putting his money where his mouth is.
“This is the last job I’ll ever do,” Bouganim told me.
To learn more about Bouganim’s perspective on funding government technology, read Next City’s profile from earlier this year and watch his 2015 Code for America Summit talk:
We’ve recently seen an uptick in venture capital interest around government and civic technology startups, but before we enthusiastically celebrate these investments, we must ask ourselves whether this potential bubble will truly reshape government IT or simply leave us five years from now in the same place we are today.
During the Code for America Summit in September, Govtech Fund’s Ron Bouganim and Code for America Director of Products & Startups Lane Becker had a great “Emerging Startup Ecosystem” discussion about the the difference between civic and government technology, and the latter’s focus on solving inherent bureaucratic problems.
Bouganim’s closing comments have stuck with me since watching the interview, and they’re important for us all to think about as we commit to building technology solutions, whether it’s for internal government operations or public-facing citizen engagement applications:
“It is tough because it’s early. Clearly everybody in this room is transformers. These are the folks … that are at the front of this, so it’s tough, because you often at times feel alone, but I think there’s a growing community, and it’s only going to get better. So, I guess my fundamental advice is that if you’re really passionate about this space, and you really identify a big problem, you have to kind of double down on being an entrepreneur. It’s hard enough being an entrepreneur and, in an emerging space like gov tech, you have to double down on that, and I would just encourage you to stick with it.”
Announced in September, Govtech Fund will invest $23 million into government-focused technology ventures. Recently, Y Combinator also expressed an interest in the industry when it issued a request for startups that included those focused on the public sector. Andreessen Horowitz has already invested $15 million in OpenGov, focused on bringing visualizations to government budgets. Other startups such as Socrata and MindMixer have also received multi-million dollar infusions to build the future of public sector IT.
Given the consistent inability for government projects to deliver on time or on budget, especially in the light of recent, major IT failures, we’ve collectively identified the problem. While much of this is due to culture, bureaucratic procurement processes and waterfall project management practices, the fundamental issue with failed government IT is that it is built on proprietary solutions.
Because of this, not only do we not have access to code, more importantly, we lose an opportunity to create an ecosystem of community and collaboration that sustains itself. To put it in context of the latest civic meme, today’s government technology is built for, not with.
The early trend we’re seeing in government technology venture investments is that the focus is still on the proprietary. While this will have incremental benefits and provide short-term excitement with each new launch, they don’t address the bigger issue every government faces in harnessing control over their IT systems.
They’re locked down and locked in.
The argument you often hear when discussing open source with proprietary government technology startup entrepreneurs is that businesses need some form of competitive advantage to build a product and develop a customer base with enough runway to sustain itself longer term. While this makes sense in a commercial market, it addresses the needs not of government, but that of the entrepreneur. The technology may provide a cutting-edge, cloud-based, big data, mobile or social solution worthy of a press release or mention in the trades, but what is it doing to really change the IT conundrum we can’t seem to procure our way out of?
This isn’t to say these new technologies don’t have merit or their builders don’t have good intention. Indeed, some do, however, there’s a classic innovation wall proprietary government IT software hits when it has reached a certain level of customer acquisition and no longer needs to compete. Oakland’s recent insistence that Granicus open up its application programming interface is exhibit A on what happens when a vendor corners a government market: technology stagnation trumps innovation. Without open systems or modularity, government is safely locked in.
We frequently hear the vending machine analogy applied to government. Today, the vending machine is the proprietary vendor machine, and government is the one doing the shaking.
If we’re going to double down and truly build a civic operating system anyone can plug into, and be proud of, we must invest in a strategy that sustains beyond one software solution.
We need to double down on a philosophical approach to government technology.
There’s not an overnight solution and the problem won’t be solved tomorrow, but if you’re really in this business to transform government, whether you’re an entrepreneur or investor, it’s time to double down on open.
Government can, literally, no longer afford to operate business as usual when it comes to technology. If ‘Vendor 2.0’ is simply a new class of fresh faces operating no differently than its predecessor, let’s prepare our kids for disappointment.
You’re either investing in or building tomorrow’s problem today, or you’re co-creating the future of government.
The latter might be a longer, lonelier road, but we have to stick with it because, as Bouganim says, it’s only going to get better.
Let’s double down.
Watch the full video of Becker and Bouganim’s discussion:
