Vivek Wadhwa

An open letter to venture capitalists frustrated with the federal government shutdown

Photo: <a href="http://www.flickr.com/photos/michaelreuter/4068776519/">historilla</a>

Photo: historilla

Lately, what’s happening between both ends of Pennsylvania Avenue is starting to catch the ire of some venture capitalists who, like many Americans already, are starting to publicly vent their frustrations.

Two in particular stand out.

TechStars founder Brad Feld:

And Y Combinator founder Paul Graham:

As a fellow citizen, I couldn’t agree more with their sentiments, however, I’m equally embarrassed by the VC community’s inability to focus its attention on entrepreneurial ventures that matter and could play a vital role in changing all of this.

Y Combinator, Silicon Valley’s darling startup incubator, has a long list of funded companies, none of which have a significant pitch on democratizing the political process or offering much-needed technology solutions to the bureaucracy.

Likewise, TechStars’ portfolio of funded ventures has not one civic-focused startup. According to its own official stats, the average company funding amount is $1.5 million. With 28 companies having failed, that’s a good $30 million dollars that could have easily gone into worthwhile, perhaps less-risky, civic ventures.

From grassroots campaign tools to fixing the bureaucratic minutiae of government procurement and everything in between, there are civic entrepreneurs chomping at the bit to get a fraction of funding in the range of just those losses.

If you’re a VC frustrated with the federal government shutdown, here’s my advice:

  • Fund 10 percent of your portfolio to civic-focused ventures aimed at solving bureaucratic technology issues or the campaigns and elections process.
  • Pivot your expectations for these ventures. The civic vendor market has a much longer sales cycle than those in the private sector. You’ll need patience, but estimates place the government IT market at $140 billion.

Unlike your average citizen (or furloughed public servant), VCs like Feld and Graham can have a huge impact beyond voting or voicing concerns to elected officials. They can play a major role in disrupting markets and if there’s one industry that could use some disruption, it’s the government services industry.

Pundit (amongst many other other notable accomplishments) Vivek Wadhwa effectively summarizes Silicon Valley’s sentiment in a recent Washington Post column “Silicon Valley shrugs off Washington shutdown“:

Perhaps it is best this way. Rather than fighting unproductive and destructive battles about budgets and health insurance, our innovators are chugging along inventing technologies that will make industries more productive and reduce the cost of healthcare. They are doing what they do best—looking forward, competing, and collaborating. Someone has to save the economy after all. Our politicians certainly won’t.

While I couldn’t agree more with Wadhwa on the “chugging along” part, more entrepreneurial and VC energy needs to focus on problems that will solve the state of our civic affairs. Saving the economy is important, but if all we’re left with is another mobile advertising platform or photo sharing social network, are we really better off as a country?

The good news is, appropriately, Democracy.com, a “global social platform for participatory democracy and political engagement,” launched this week with $2 million in seed funding. Other companies, too, have found funding to make a go at it, such as NationBuilder and SeeClickFix.

My intention isn’t to single out Feld or Graham. I have much respect for both of them. They have created amazing communities of innovators and inspire and mentor entrepreneurs everywhere beyond just their work with Y Combinator and TechStars.

I’d just love to see them and their peers take a meaningful lead on leveraging their influence and capital to change the entrepreneurial focus of the startup community. The best way they can do that is to start funding ventures that directly impact foundational aspects to a stronger civil society.

Yes, it will take some serious VC pivoting, but if you care about your country, it’s worth the investment.

Let democracy be your exit strategy.

The other Vivek is wrong about open government

Whether it was written out of naivete or for the intent of sensationalism, the other Vivek, Vivek Wadhwa, misses the mark in his Washington Post piece The death of open government.

Wadhwa makes the general argument that, because U.S. Chief Information Officer Vivek Kundra announced his resignation last week, open government will “suffer a slow, inevitable death.” While I agree the federal Open Government Initiative itself has lost momentum without set dates, timelines and leadership from the top, this by no means is an indicator of the overall health of open government.

Open government will never die and here’s just a few reasons why:

Spires says so

Homeland Security CIO and Vice Chair of the Federal CIO Council Richard Spires is emphatic that senior IT executives will carry on Kundra’s legacy. He writes this in a recent CIO.gov blog post:

During the past two years, I have worked closely with Vivek Kundra, the US CIO, in both my capacity as the DHS CIO and in various leadership roles on the Federal CIO Council. Vivek joined the Obama administration with a vision of IT being a catalyst for the Federal government to be much more open, participatory, and collaborative. Vivek has been a strong force for open government. He has changed the dialogue and viewpoint of agencies of the Federal government – and we will not go back. (emphasis mine)

A number of federal CIOs/CTOs I’ve talked with are passionate about leveraging technology to make government more open and efficient. These are bright, innovative public servants with vision. See Todd Park, Peter Levin, Roger Baker and countless others as prime examples.

Look local

Open government isn’t just a federal phenomenon. It’s happening in Baltimore, Chicago, Philadelphia, and even in Wadhwa’s own backyard, San Francisco. Open data start-up Socrata has a growing customer list that includes states like Washington, Oregon, Oklahoma and Illinois.

Beyond data, groups like CityCamp and Code for America are creating an organic and sustainable movement that involves citizens and public servants.

It’s not just data

Wadhwa cites the lack of funding around initiatives like Data.gov as a prime example of open government’s demise, but open government is more than just open data.

Open source projects and ideation experiments are flourishing at all levels of government. FCC most recently began the process of re-vamping and re-launching its entire Website after 10 years using the open source platform Drupal. Be on the look-out for other major agencies to announce the same. Open source service companies are playing a key role in fostering the open government community within the Beltway through events such as OpenGovDC and regular Drupal meet-ups at Stetson’s.

Innovation doesn’t need funding

Wadhwa writes of his call to Silicon Valley entrepreneurs and the half dozen replies to help fix federal government IT issues at a fraction of proposed costs. Unfortunately, he writes, “no one has taken these entrepreneurs up on their offer.”

Innovative entrepreneurs don’t wait for the phone to ring and neither should Wadhwa or his incubator-in-waiting. Follow in the footsteps of Govpulse.us and Federal Register 2.0 and create the prototype. If it’s innovative enough and executable, someone in government will be the Gov 2.0 guinea pig.

Open advice to the other Vivek

Democracy is not a spectator sport.

Step away from the keyboard and engage in the grassroots open government movement, especially the one in your own backyard. Other tech leaders are doing more than just writing and theorizing on TechCrunch and The Washington Post (see Craig Newmark, Tim O’Reilly, Pierre Omidyar, Esther Dyson, Mitch Kapor to name just a few).

This isn’t a time for pontification. Government, especially open government, needs your help and leadership. It’s time to leverage your influence (and Klout score) and be the change. Inspire Silicon Valley to focus on civic technology instead of building another photo sharing app.

Open government won’t die a slow death because one of its biggest champions leaves public service.

Open government won’t die a slow death because it’s underfunded.

Open government will die a slow death if we, as citizens inside and outside government, don’t engage, collaborate, participate and do something about it.

Will Wadhwa create his own personal Open Government Initiative as many others across the world are doing? I hope so.