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Three Things Governments Can Learn from Startups

Updated: Mar 12

By Catherine Geanuracos, CEO & Cofounder of CityGrows

Lots of times people - especially candidates and elected officials - talk about how government should run more like a business, or even a startup. We love this piece from Strongtowns about how a focus on revenue is important for any organization to be sustainable. As someone who’s worked in local government and as a business owner and now a startup founder, I think there’s some truth to that statement...but in some ways it’s completely wrong!

Local government exists to support things in a society that will never work as money-making business ventures. It’s never going to be profitable to run a fire department, staff a police force and the courts, or run a homeless shelter, yet those institutions allow us to live in communities that are safe, prosperous, and sustainable. Of course, governments should also generally balance their books - an unsustainable national debt (or lopsided state or local pension debt) can prove disastrous.

In the case of other startup concepts, it’s a question of scale. While it’s a terrible idea for a government to adopt a “failing fast” approach on a large project with public funds, it shouldn’t discourage teams from low-cost experimentation and taking risks in the name of innovation and better service.

So what are some of the principles from running a startup that transfer to government? Here are 3 practical, non-risky things startups do that we think should be part of every local government’s operational toolkit:


1. Focus on the people you’re serving


While businesses focus on “customer service,” governments are focusing more and more on “constituent service.” Of course it's important to respond to complaints or compliments from residents and businesses, but we’re recommending you start conducting “user research.” In government, it’s important to pay attention to your staff as well as your residents and local businesses, they’re all stakeholders. Here at CityGrows, we only add new features if our existing or potential customers request them - and before we build anything new into our software, we send our surveys to our existing users to ask them for feedback and recommendations. Does your local government do that when you’re planning a new program, technology capacity, or service?


2. Take advantage of cloud-based technology and build your services and operations using existing tools whenever possible.


How many tech subscriptions does your local government have? Did you know that the identity company Okta’s annual survey found that the average business has more than 80 SaaS (software as a service) subscriptions? Part of the reason that startups like CityGrows can exist with such a small team (and charge so little for our workflow automation tools) is that we built CityGrows by taking advantage of a lot of other technology tools that other awesome people had already built - everything from Stripe (that processes the permit and license fees that governments charge as part of CityGrows workflows) to Hubspot for sending emails, to Quickbooks to track our accounting. Too many local governments are hesitant to use new technologies, but as the cost of software comes down, and the need for time and money implementation support evaporates, it’s getting easier and easier to test and use tools that help make your operation work better.


3. Develop clear success metrics and track progress towards goals


One of the “knocks” on government is that it doesn’t function efficiently because there’s no clear metric to judge its performance. For business, we either make enough money (or, for many startups, inspire enough investment) to survive, or we fail and cease to exist. But metrics for governments are more complex than whether there’s money in the bank at the end of the year. What are the most important metrics for your teams? Is it the increase in the number of new jobs created locally, or the number of homeless people housed, or a reduction in the number of crimes in your community? What are the sub-metrics that will matter the most towards achieving your local goals?


While there are plenty of things that we’ve done as a startup that we wouldn’t recommend for local governments (like expecting your core team members to work without a salary as the business gets established!), there is a lot that we think local governments can and should learn from startups. One of the best ways to adapt the best parts of startup culture is by working with startups! Our team at CityGrows loves working with local government leaders and teams that are ready to innovate, as do all the companies in our Civstart cohort. Which one of us can help solve your most pressing challenges, improve your services, or increase your team’s efficiency the most? Get in touch with the CityGrows team if you’re looking to create more digital services (online permits, licenses, requests, or processes) to reduce paper, get rid of ADA non-compliant PDFs forms, reduce inefficiency, and capture missing revenue. If you’ve got all that covered, check out the other Civstart companies and start building your ability to focus on your constituents, implement new technology faster, and track progress towards your key metrics.

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