Civic tech needs more funders — start by telling my stepmom that
Words by Kirsty Styles • Jul 13 2018
TL;DR: because democracy?
If you ask the average person on the street about ‘civic tech’, it’s very likely they won’t know what you’re talking about.
I’ve tried it and most people I’ve questioned, young or old, won’t even hesitate a guess. The words in tandem, or even taken on their own, mean precious little.
But if they’re someone who keeps even one eye on the news, they may be able to tell you something, likely not very positive, about Facebook’s dealings with Cambridge Analytica.
As someone who worked in the trenches as a reporter during the adolescent years of East London’s latest tech boom, civic tech was the thing that helped me believe this digital revolution could be about more than ads and algorithms.
However, given that our most famous recent example of ‘political technology’ is now the subject of ongoing criminal investigations, those working in genuine, purpose-driven, for-good civic tech appear to have a bit of a PR problem on their hands.
Mention eBay to my stepmom and she’ll chew your ear off about the latest bargain sofa she’s piled into my dad’s now-overflowing living room.
But ask her about Omidyar Network, founded by eBay billionaire Pierre Omidyar in 2004, now a billion-dollar venture and grant funder of a range of ‘for good’ tech ventures, and at best she’ll say it sounds a bit dull.
To those in civic tech circles, a large investment from Omidyar that you can spend on your core functions is a lifeline.
Understanding civic tech
“It’s not clear that it has reached sufficient scale to penetrate the mainstream dialogue,” Omidyar investment partner Stacy Donohue said then of my beloved civic tech.
And it was this lack of “shared vision and identity”, the report argued, that was preventing people understanding, joining and funding the sector.
The report added, “attracting more people and more capital will ultimately drive greater impact.”
With 25 Omidyar investments publicly listed on tech investment tracker Crunchbase to May of this year alone, compared to just 15 during the same period in 2017, things appear to have gained pace.
Government Technology’s GovTech100, covering those companies that intend to sell tech directly to government, was also launched in 2016 to chart the rise of ‘technology that helps city hall update its application forms’ in the US.
“We didn’t have a business beat like we have now until about two years ago,” explains one of the publication’s specialist reporters Ben Miller. “The GovTech100 was the start of us covering the business angle of companies working in this space.
“We know the average person does not have a good understanding of what civic tech is or why it’s important,” he concedes. “I don’t think people in the US really think that much about what government does below the federal level news coming from the Trump Administration.
“Until you’re on food stamps, you’re not thinking about your city’s issuing process for food stamps — most people don’t engage with functions of local government that exist to fill gaps in parts of society they simply aren’t part of.”
Government Technology’s latest index, for 2018, lists six US companies that have raised more than $10 million: transport planning platform Remix, government operations manager OpenGov and government bond fintech Neighborly, as well as Nextdoor, LiveStories and Optibus.
It also counted one IPO, listing themselves on a stock exchange, for gunshot-tracking ShotSpotter, as well as new funders joining a small but growing base, now counting Urban Us, Urban Innovation Fund, Govtech Fund, Ekistic Ventures, Responder Ventures, Salesforce Ventures, Banneker Partners and more.
For an industry in need of a vision, the debate highlighted in the Knight Foundation and Rita Allen Foundation ‘Scaling Civic Tech’ report, that “civic tech and GovTech are neither mutually exclusive nor perfectly overlapping” might be necessary, but is perhaps unhelpful beyond those who ‘need to know’.
For the purposes of his work, Miller counts civic tech organisations as those that are the most mission-focused — and always starting with the problem.
“The last thing I’d say to someone new I meet is that I run a civic tech organisation — they’d look at me blankly,” says Mark Cridge, CEO of the UK’s MySociety, which started out as an ‘e-democracy’ organisation in 2003, but now “build[s] and share[s] digital technologies that give people the power to get things changed”.
“We are currently working on how we talk about ourselves externally — we promote democracy, we get more people involved in politics — it may be simplistic, but it’s better than giving the wrong impression.
“Civic tech is maturing as a sector and, like digital as a whole, it’s no longer seen as ‘other’. But just as a digital tool is not sufficient — it may be essential and important in amplifying, extending and scaling behaviour change at marginal and minimal cost — we now talk more ‘civic’ than we do ‘tech’.
“It has to be an indication of a wider system of change, an understanding and articulation of what the whole of the civic intervention is. And that also applies to how you will sustain the product’s life beyond initial funding.”
London’s Bethnal Green Ventures (BGV) has in the five years since launch invested almost £2 million into 95 ‘tech for good’ startups across 10 cohorts. A third of those were focused on democracy and society, and its invested companies have raised a total £29 million additional funds, largely through equity rounds.
“There is a real issue for the ‘tech for good’ movement in that people are starting to associate tech with ‘bad’,” says BGV’s CEO Paul Miller. “Of course, it’s healthy, people should be sceptical and interrogate the reasons behind people trying to get us to use products and services.
“We have to focus on communicating the end result — really focus on the social impact, what’s going to change in people’s lives?”
Joining civic tech
One overlooked aspect of a lack of funding, noted in the 2016 Omidyar and Purpose research, is that project-to-project funding favoured by charitable foundations doesn’t lend itself to helping workers build their expertise.
“An issue for the maturity of the sector is that it’s still quite difficult to support people’s careers,” MySociety’s Cridge adds. “Only long-term, sustainable funding can increase the quality of the work people do and the impact it will have.”
“Many people that work in tech would love to get a crack at solving a social problem,” agrees Government Technology’s Ben Miller. “They can say ‘I did something that changed my city or changed the world… but I need to pay the bills’. Silicon Valley even costs too much for people who work at Google to rent an apartment, over sleeping in their van. People need income.
“You might be able to attract more talent if the sector had more money, to free people up to come up with more ideas.”
Although the tech industry, and by proximity, the civic tech industry is changing, Knight and Rita Allen criticise it for being something of a closed shop — because you have to talk the talk of civic society to get along. Cridge says his organisation is working hard to attract more diverse people from the communities that need civic tech most.
In a positive twist, BGV’s Paul Miller says the current headlines being made by mainstream tech actually seem to have made more people put their hands up for ‘tech for good’. To help empower all those that wish to join his accelerator, participating companies get a £20,000 investment upfront, which helps people cover living costs.
“The supply of people wanting to create new things at Bethnal Green Ventures doesn’t seem to have waned at all. This is still a tiny group — but a vibrant one — and great things can come from small groups of people really trying to push things forward.”
Funding civic tech
The Knight and Rita Allen Foundations’ report identifies real challenges in the funding landscape for civic tech, not least ‘buyer’ capital, finding customers, but more critically ‘builder’ capital, big money to help organisations scale.
“A fundamental quality of civic tech, wrapped up in the definition, is that profits and investment returns are a bit secondary,” govtech reporter Ben Miller says. “At the same time, that doesn’t mean they aren’t candidates for venture capital or other investment — it depends on the service.
“But you have to ask yourself whether venture or the expectation of return is consistent with your mission. Will it dilute the mission, and even if it won’t, how will people perceive it?”
“There can also be an issue with allocation of resources when you take VC investment — your focus can shift quickly to sales and marketing, versus user research or product development.”
“I don’t think we have the luxury of being averse to venture capital funding, there are not many Omidyar Networks in the world,” Mark Cridge admits.
His organisation’s current funders are a rainbow coalition of usual-funder-suspects, bolstered by consultancy projects and small donations from people who care.
“The Hewlett Foundation is taking on the mantle from Omidyar, where they will consider relatively large unrestricted funding. But that’s the holy grail and it’s difficult to come by.”
Many journalists in the UK and elsewhere have been brought up on its ‘freedom of information’ request tool What Do They Know, which helps people across 26 countries hold their governments to account, all without core funding.
MySociety doesn’t get UK government money and at the mercy charitable foundations, says it’s easy to be a victim of the “tyranny of the new”.
“There’s this obsession with ‘innovative new solutions’ and ‘new startups’ and ‘new ideas’ — rather than putting money behind something that works. It’s the same thing in the wider tech space and is most problematic when funding scaleups.”
“With What Do They Know, we can prove benefits for open government and running government more efficiently, we can make the business case, but we don’t have funding available to scale that up.”
Cridge’s organisation is currently looking at fully commercial routes for services like local issue reporting service FixMyStreet and is considering crowdfunding for an upcoming hire.
“There’s that stuff in the middle, where there may be a commercial route, but it might not be entirely appropriate, because it might change the nature of the product itself. Of course you may want there to be continued charitable funding, but that’s not always available. It’s a tough nut to crack.”
“A digital tool with no sustainable force of future funding is clearly unattractive to funders. But with certain aspects of civic tech — like democracy — as civic tech stalwart Richard Pope said, the user need is because democracy.”
Cridge says there is a pool of small, specialist funders who will invest substantial amounts, “but that’s not really growing”.
Knight, Rita Allen and BGV’s Paul Miller are all supportive of this kind of diverse approach to sustainability in civic tech.
Of almost 100 companies funded by BGV in five years, just over half are still going. Paul Miller believes that if they were all “working perfectly, we’re not taking enough risks on things that might not work”.
“Civic tech needs real diversity of models, of types of support, there’s not one universal path. It’s not about hero worship of the Instagrams, the products with billions of users with what appears like not very much effort. They might not be going to see overnight success — but that doesn’t mean they can’t be super valuable.”
He believes it’s not always funders, but customers that it’s difficult to track down.
“Government is a difficult customer, it’s hard to meet them, and understand what they really want, then go through the procurement process, then adapt to make the product really work. That’s still the biggest barrier to innovation in civic tech — the customers.”
Like BGV’s upfront investment model, there are alternative routes. Ben Miller at Government Technology highlights foster care software provider Binti, alumnus of San Francisco’s now-US-wide Startup in Residence (STIR) programme, as a successful example of co-creation with your customer.
“Lots of people want to foster, but it’s burdensome and takes forever, all while children are waiting for a home — the company started like a lot of civitech problem solvers.”
“Through STIR, companies go into a government agency to understand their problem and create a solution — obviously this helps government, but the startups also meet their customers, get UX experience, iterate and create a solution for a problem — for that city — but you can then sell it to other places.”
“Make sure what you’ve got is a problem, which hasn’t already been solved,” the reporter adds.
He believes Code for America is a “huge force” at the centre of civic tech and the experience often leads people on to found or go into leadership at a startup, or head into government.
Cridge adds: “I’m a strong believer that it’s incumbent on us to make the case, to build the evidence base, demonstrate value and make the case for funding.”
MySociety started that process with the launch of tictec in 2016 — a conference to bring together the industry to grow and share that evidence, which welcomed Martha Lane Fox as keynote this year.
Meanwhile in New York, the Personal Democracy Forum set up to look at how the internet is changing our world was recently forced to publicly, face its own demons about how sexual harassment had crept into civic tech.
It’s a sign of growth that an industry can openly own its problems — but it’s hardly great to see a new, for-good industry replicating old behaviours.
None of my interviewees were convinced that the fall of Cambridge Analytica is too much of a problem for civic tech — it isn’t ‘civic tech’, after all.
But, having been invited myself by the UK’s Electoral Reform Society to debate ‘technology and democracy: after Cambridge Analytica, how can we make it work?’, I’m pretty sure most people don’t know that.
Civic tech has a small army of caring doers across the world, with a bit of a comms problem –
whether that’s with the public, with potential hires or those all-important funders.
But first, to test the waters, perhaps my stepmom could do with a call?