Why startups are best to drive the smart city
Barcelona—a smart city is an interconnected ecosystem with many parts and therefore it can be natural to try to house all of these moving parts in one place, via traditional top-down government plans. But governments aren’t necessarily known for their cultures of innovation. In fact the stiltedness of governments combined with budget constraints are reasons it’s taking much longer than planned for us to see truly smart cities come to fruition.
The solution? Give up some of that control and enable bootstrapped startups to take on a more important role. This was the theme of the “How startups are innovating smart cities” talk at the Smart City Expo last week. Today we will echo much of the municipalities, private businesses and startup incubators that spoke last week in offering advice for how cities and startups can work together to build a citizen-driven smart city.
Why startups are better equipped to innovate the smart city
Beatrice Couture, the general manager of InnociteMTL, Montreal’s smart city incubator, listed three important reasons that startups are readier than other key players to take up the cause:
- Startups must be iterative to survive. Startups thrive on life-cycles based on experimentation and repetition. “They go to market and they use the information to improve their products and you get as much users as possible to improve their products,” Couture said.
- Accessibility and usability. Startups focus on one piece of the puzzle, making sure it is well-suited for its audience, instead of focusing on the bigger picture. They do much more usability testing which can help make sure the services are accessible to all citizens. “They are actually providing a tool for their citizens needs,” by prioritizing citizen feedback.
- Startups are all about sharing. One of the main themes of the 2015 Smart City Expo was that sharing is caring. There’s no need to reinvent the smart city every time, but rather smart cities should be encouraged to share their wins and losses, something startups are uniquely equipped to do.
Plus, as Couture pointed out, “Startups, that’s what they do, they just use technology to mix data together and make solutions to simplify the lives of their users.”
How the smart city can cultivate start-up innovation
Couture offered more great advice to cities looking to take the best advantage of startup smart city innovation.
- Communicate. As a city, you should express your problems—not tell the solutions to build! A great way to do this is by coming up with questions and problems and to offer challenges like hackathons that get them in a competitive and innovative mindset to create solutions.
- Collaborate. As a city, you must engage with the local startups, sharing your data on which they can build solutions.
Simon Sylvester-Chaudhuri, managing director of smart city investment fund Global Futures Group, admitted that it isn’t easy for smart city focused startups. “Smart city startups don’t necessarily have the allure that the Facebooks and Twitters have, so they don’t have access to the capital,” he said. Add to this, depending on location, many startups have limited access to local talent, unsupportive legal frameworks and often a lack of opportunity to prove new concepts.
Sylvester-Chaudhuri’s solution? The smart city incubator. He contends that incubators are natural homes to smart city innovation, particularly when they bring together public, private, and academic entities, which give the startups access to major stakeholders and “are at the heart of solving smart city problems.” This should be driven by the city but collaborated with everyone.
And as a major theme of the Smart City Expo was, Sylvester believes that “startup incubators and innovation hubs can really accelerate the market for smart cities” by enabling city solutions and then startups helping to replicate the smart city success models on a global scale.
How Smart City Startups can attract funding
Representing the business side of the public-private-startup smart city collaboration, Claro Partners’ Aldo de Jong proposed ways for startups to overcome the challenges of limited capital and limited exposure. Before you can get funding past the seed round and before you can take your solution past the city limits, a startup must have clear:
- Value proposition
- Market validation
- Concept showcase
- Business model
- Customer engagement
- Make sure your Internet of Things for IoT bridging the physical and the digital — Apple is the rare exception.
Claro Partners offers this free Internet of Things canvas to help you position your product and answer these questions.
Do you have more advice for wannabe smart cities? For wannabe smart city startups? Tweet it loud to @TefDigital or comment below!
Are you a startup or smart city creating the future as we’ll know it? Tweet me your story in 140 characters or less to @JKRiggins!