| Notes |
Results & Impact
FastFWD conducted two rounds of the accelerator, drawing proposals from 137 entrepreneurs on the challenge of improving public safety. 20 were chosen for the business accelerator. Nine companies received grants from Philadelphia to develop pilots. In the end three of them - Edovo, Textizen and Village Defense - received city contracts. Many of the other startups went straight for private investment after running through the business accelerator. One company from the second cohort, Propel, has already raised $4 million in investment for its project, which aims to simplify the process of using food stamps. Billions of dollars of food stamps go unclaimed every year, so the potential for impact is substantial. More generally, FastFWD also streamlined the procurement process for pilots - turning a 48 page document into a 17 page one - and led to Philadelphia forming a new partnership with CityMart to institutionalise the accelerator process and expand it to other urban challenges.
Key Parties
Philadelphia Mayor’s Office, Wharton Business School, GoodCompany Ventures, CityMart
How
First, the program’s designers chose a pressing and appropriate urban problem, such as how to improve public safety. Then there was an open call for solutions to the problem, which was packaged as a market-based opportunity for entrepreneurs—for example, by stressing that local governments in the US spend $152 billion on public safety ever year. The strongest teams with the most scalable, impactful proposals were selected to participate in a 12-week business accelerator, managed by GoodCompany Ventures. Selected entrepreneurs had access to expert mentorship, received $10,000 in non-equity stipends and were introduced to an international network of investors. Accelerator graduates had the opportunity to pitch to the City of Philadelphia and business leaders during several showcase events. Some were awarded pilot contracts by the city for $30,000 and/or early stage funding. All the while the FastFWD team collected data, evaluated it and reported their findings to share best practices and models.
Where
Philadelphia, USA
Target Group
Entrepreneurs
Cost & Value
FastFWD received a $1 million grant from the Bloomberg Mayors’ Challenge. Support for each company was priced at $35,000, with an additional $30,000 available for pilots.
Stage
Completed in 2015
Hurdles
Entrepreneurs did not initially flock to the project, probably due to a lack of awareness as entrepreneurs and city government do not typically work together. This meant that, to start with, it was the FastFWD team who had to go out of their way to meet entrepreneurs and pitch the project to them—then the entrepreneurs got on board. Still, attempts to streamline the bureaucracy of the procurement process lagged behind the business accelerator, meaning some companies were left waiting a long time before they could start their pilots. Several of the others went straight for private investment instead. As FastFWD was, in part, meant to help develop a new kind of city-vendor relationship - one in which the city was more a partner than a simple revenue source - they tried to address this for the second cohort by bringing civil servants into the fold to help the startups navigate public sector red tape and prepare for the request for proposals.
Replication
FastFWD has not been replicated in its entirety, but Philadelphia has continued its problem-based procurement with CityMart, while GoodCompany Ventures has taken elements of FastFWD into its new program with the White House, Climate Ventures 2.0.
The Story
Through its FastFWD program, Philadelphia opened procurement to entrepreneurs and tested nine innovative pilot programs, three of which went on to win city contracts.
FastFWD was a winner of the 2012-2013 Bloomberg Philanthropies Mayors Challenge. Its chief innovation was simple yet significant: it switched from solution-based to problem-based procurement.
Traditionally, the city would say what it wanted in a Request for Proposals (RFP) and send it to the usual vendors who would compete to win the contract. It was a slow, complex and prescriptive process. By contrast, FastFWD started the procurement with a question – how do we increase public safety? – and then invited entrepreneurs to pitch innovative solutions.
From two open calls, FastFWD received 137 applications coming at the problem with a range of approaches. They selected 20 for the business accelerator. Three of them, Texitzen, Edovo and Village Defense, went on to win city contracts, while numerous others found success with private investment.
Edovo is a tablet-based educational program for prison inmates. In one year their pilot with Philadelphia’s Department of Corrections allowed more than 500 inmates to complete 2,100 educational courses. Such education has been found to greatly reduce recidivism. In January 2016, Edovo raised $2 million from a round of funding and it has now been adopted across a dozen states. But without the pilot, in which the city was instrumental for getting them access to the prison system, they never would have cracked the market in the first place.
Other ideas put to FastFWD included an urban farming network, a company providing self-defence products for women and an NGO focused on improving the lives of former child soldiers. The procurement process asked open-ended questions, and they received a diverse range of answers.
The question for the open call was chosen after consultation among city officials and GoodCompany Ventures. They selected some of the city’s pressing challenges and assessed which of them was best suited for innovation and scale. They then framed it as a business opportunity for entrepreneurs by, for example, stressing that local governments in the US spend $152 billion on public safety every year.
At first it was a challenge to generate interest among entrepreneurs. This was likely due to a lack of awareness stemming from the fact that entrepreneurs do not often work with the public sector. To start with, then, the FastFWD program had to engage in major creative outreach, specifically promoting the program in outlets frequented by entrepreneurs.
The applicants were then whittled down to leave only those with the most scalable, impactful proposals. These were selected to participate in a 12-week business accelerator managed by GoodCompany Ventures.
As part of the accelerator they had access to expert mentorship, received $10,000 in non-equity stipends and were introduced to an international network of investors. During several showcase events they had the opportunity to pitch to the City of Philadelphia and business leaders. The best were awarded pilot contracts for $30,000 and/or early stage funding, either from the city or private investors.
In fact, many of the business accelerator graduates went on to become successful independently of the city. Some of the companies simply developed in ways that meant they were not cut out for city contracts. Others used the city pilot as Edovo did, as a bridge to private capital.
Several of the startups cited public sector red tape as a reason for leaning towards private investment, and FastFWD took steps to address this by, for example, streamlining the RFP for pilots from 48 to 17 pages, and by having public sector workers be more involved with the startups to help them navigate the bureaucracy.
However, the program was in part intended to develop a new kind of city-vendor relationship, and it is debatable whether it succeeded in this. It did streamline and introduce innovation into the procurement process, but it did not manage to remove all the structural problems that limited smooth cooperation between the city and the startups.
The city-vendor relationship that FastFWD had in mind was not simply an imitation of the relationship between, say, a venture capitalist and a startup. There are good reasons why the city would be a relatively more cautious investor: the services and products they look for would be different, and there are limits to the risks that the government can take with the taxpayer’s money. But exactly what form this city-vendor relationship would take remains up for discussion.
Still, elements of FastFWD’s reform of the procurement process have lived on in programs elsewhere.
For one, Philadelphia has continued to pursue problem-based procurement. Through a partnership with CityMart, a Barcelona-based procurement company, it has helped institutionalise the process championed by FastFWD—and this service is now used by a number of cities worldwide.
Likewise, GoodCompany Ventures has taken parts of FastFWD into its new program with the White House, Climate Ventures 2.0, which is asking entrepreneurs across the world for innovative solutions to climate problems—to start with, how agricultural and water systems can bear the stresses of the coming climate volatility.
In the end, FastFWD made three innovations. It helped establish open-ended problem-based procurement. It started reframing social problems as investment opportunities. And it showed how a pilot model can help companies break into specific markets, such as the prison system. In doing so, it injected fresh thinking into a staid procurement process, and underlined a role for governments in incubating social innovation.
|