Government as a Platform?

Data, data, data. This is the answer for government in this new world of Government 2.0. Making government available to the citizens by building platforms for change. These are the ideas bandied around when the Silicon Valley Warlords came to Washington, D.C. this week to put on the invitation only Gov 2.0 Summit and teach Beltway insiders how their successes in the Valley could be instituted in the center of government.

The center of government. The center of politics. The center of policy. Of course, if the warlords have their way, the center of technology.

The concept of government as a platform is a good one on the surface. The idea that making government a series of, for lack of a better words, APIs to help the citizen understand and access their government officials and services better is a noble one. However, it is naive, and this is where the native-understanding of Washington comes into play.

The rest of the country looks at Washington as a city that is always in-fighting. That the entire ecosystem is made of bureaucratic citadels of power that never accomplishes anything. Incompetent politicians who all lie, lie, lie.

For those of us inside the beltway, we recognize that partisanship is a means to an end. That policy takes a long time to change, policy makers remain embedded as established government for years and even decades, and that politicians come and go. This is part of the expectation in our Washington. The agencies exist, made up of rank and file – the foot soldiers, if you will – and the policies in place in those agencies come from decades of precedent in some cases.

Some of it needs to be changed, and to the extent that OpenGov and Gov 2.0 can open up the doors to this change, then it will. However, some of this will never change and it’s not necessary to try to change it. Precedent generally exists for very sound reason.
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What will fail, however, is the replacement of the Washington system made up of politics, policy and also data by a fraternity-style, easy-money lifestyle of the west coast. While they talk billion dollar valuations on startups, we talk about billion dollar annual budgets for Level C agencies. Two different worlds. We have a much bigger stake, and therefore, we’re less likely to change how we do things because they suggest we should.

My suggestion is to O’Reilly and Camp: Come back to Washington, D.C. I know you’ll be back for Gov 2.0 Expo in the spring, but come back for a Summit too. Instead of dictating how the event goes, however, open it up. Make sure 50% of tickets are available for free for any verifiable government employee. (General consensus is the attendace was around 70-30, Private-public, a guess since O’Reilly Media declined to comment on attendance figures). Double the price for the private sector tickets to compensate. Here’s a hint: The federal fiscal year doesn’t begin until Oct 1. Budget money isn’t available to pay for the agency employees to attend your event. This isn’t the private sector. Money needs to be accounted for, especially during a recession. If you want this to be about government, ensure that the Feds can go free of charge and charge the Private sector double.

Secondly, allow questions from the audience. There was extremely little interaction with the audience by speakers. This needs to change if it’s going to be a learning environment.

I’d also suggest the need for a competitive event. With everyone who has dipped their feet into the Government 2.0 kool-aid, precious few have kept their noses clean from federating around this very failed event. I said in November that few of anyone has this industry figured out yet, yet the money flowing in from the Valley has caused almost everyone to sacrifice their independence and free-thinking (How many of you on that Gov 2.0 Summit Advisory Board are free to do a competitive event?)

I’d encourage some of the historically free-thinkers who have given up their independence to think about how government can really be assisted (let’s not talk about fixing government – they innovate much better than we do, actually) in different ways. I think there is room for events that will avoid the thumbprint of previous event and will federate around real ideas, not just inspiration speeches.

* Photo Credit: Big Berto

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Lessons Learned — Scaling Social Systems

My charter with Venture Files is to contribute to and promote entrepreneurship and the startup scene around DC in general. Now, as I’ve warned, my posts may reveal my bias towards the Web 2.0 world. (It’s what my startup is about.) But heck — I’m at the Web 2.0 Expo in NYC, so . . .

A session today of great interest was Joshua Schachter’s ‘Lessons Learned in Scaing and Building Social Systems.’ For many of us, Schachter lived the great American Web 2.0 dream:

Step 1. Build an app (del.icio.us) in your spare time, and operate it from your apartment (server ‘farm’ below);

Step 2. Sell it to Yahoo! (rumored to be in the neighborhood of $20M . . . nice neighborhood);

Step 3. Retire (he now devotes his time to playing XBox).

Delicious server.png

I can certainly relate to that!

Schachter’s talk on scaling wasn’t technical — he was referring to scaling the features, the very functionality of his social bookmarking site del.icio.us (now delicious.com).

Interestingly, Schachter built the application to solve a problem he had — he had a Word file with thousands of lines of links for all the web pages he bookmarked. Thus, the application’s initial value was utility. And that’s what Schachter would provide the world — a useful site for keeping track of favorite sites . . . and making your friends aware of them.

And for a couple of years, that’s what it did. But when the number of users got substantial, features surrounding the network effect eclipsed the site’s original value. Achieving a critical mass of users (file this under ‘high-class problem’) suddenly transformed the site’s functionality from a utility to a social application, giving Schachter a whole new set of issues to deal with — customer service, spam, kiddie porn. (“You see it all, when you get to scale.”)

Ultimately (for all of us), the focus of scaling shifts to revenue. Being ad-driven, for del.icio.us, that meant getting to more and more users and pageviews. Subtleties start to really matter, such as encouraging sharing among del.icio.us users (he saw, for example, that a disproportionate number were checking the ‘keep private’ box; it dropped dramatically when the label was changed to ‘do not share’ — as in, ‘what, you don’t want to share your toys, Johnny?’). Bingo.

“The problem, however, is that these features impact one another. Optimizing revenue often comes at the expense of user satisfaction — think of ad-splattered sites, or Evites that force you to visit the site, rather than providing details of the invitation in the email.”

Here are a few other nuggets:

Make your product self-marketing Provide as much functionality as you possibly can before asking people to register.

Want harmony on your site? Avoid conversations Schachter really disliked the flame wars that comments generate, so unlike digg, delicious.com to this day has none.

Listen to your users We’ve heard it a hundred times, but the best founders (Flickr, 37 Signals, WineLibraryTV) all really do it — Schachter read and answered every customer email up until a year ago, when the volume got so great, five people at a Yahoo! customer-support center had to be dedicated to it.

Learn your ‘drivers of infection’ The two most dramatic traffic-builders for del.icio.us were the Firefox plug-in and the RSS feed.

Great lessons for all of us.

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Working the Workshops


Web 2.0 Expo New York 2008

There are tons of informative sessions at Web 2.0 Expo. I especially like the Day 1 workshops. Maybe it’s the no-break, three-hour block . . . the fewer tracks . . . or the reduced traffic, since a good many folks opt out of Day 1 to save money. Shame.

If you’re a coder, there are solid technical workshops. But even though I’ve started up several companies, today I made a beeline for the startup and financing workshops. Why? Mainly because the scene/climate is constantly changing. But also because, just as with a pitch meeting, you always come away with some useful nuggets.

At the Web 2.0 Expo in San Francisco in April, it was ‘Starting Up: Strategies for Financing & Growing Your Web 2.0 Startup,’ put on by Rob Hayes of First Round Capital and Jeff Clavier of Softtech VC. Today, it was ‘Casing the Startup Joint: Real Life Examples of Startup Opportunities, Issues, and Strategic Decision Making,’ presented by Albert Wenger of Union Square Ventures, along with Charlie O’Donnell of Path 101 (Charlie was formerly an analyst with USV).

[Fellow East Coast startups take note: Both USV (New York) and First Round (just outside Philadelphia) are early-early stage VCs. Both are on my radar for CHALLENJ -- but despite what First Round says about investing on Powerpoints, I don't plan to approach either until our app is built; USV makes it clear they want something working.]

Here are a few random nuggets from today:

- Shift from hard-coded documents to live ones Although crafting a clear (if not pretty) business plan is still advised (if for nothing else, it gets everyone in the company on the same page, so to speak), VCs would rather see your competitive analysis in a wiki. “It also tells us that you have an ongoing process for tracking competitors,” according to USV’s Wenger. And if your .ppt deck doesn’t change nearly every time you deliver it, by definition it’s stale.

- Reduce your risks before applying Be mindful of the four buckets of risk before you approach any investor: 1) Team, 2) Technology; 3) Market; and 4) Capital Requirements. Says Wenger: “We can handle one — maybe two — but that’s it. (I’m working on my team — any killer PHP coders out there?)

- Rejection by one VC firm has no reflection on your business Suck it up. Firms like USV do fewer than 20 investments a year (and some of them are later stage). If they pass — presuming you’ve been sufficiently persistent — move on. (The corollary to this of course is, if 40 firms pass on your deal . . . it’s time to retool.)

- State of angel investment The thin g to remember — and it’s good news — is that the number of angel investors is 10x the number of VCs. But you have to work a lot of venues to find them, since most don’t hang out a shingle with wings on it — uncles, friends of the family, doctors, they all count. The bad news? When Wall Street flails (as it’s doing right now), even the wealthy get skittish. As O’Donnell puts it, “The rich tend to write fewer checks when they feel less rich.”

Lastly, it’s always interesting to hear the war stories from other startup CEOs. To be honest, I’ve made enough mistakes that I don’t learn all that much in these ‘true-confession’ sessions . . . but there’s something comforting in knowing that really smart people also did some dumb things.

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