Business Impact

Why Tech Companies Should Work with Government Rather than Against It

The former chief digital officer of New York, Rachel Haot, explains why government and entrepreneurs need to work together.

What do you know now about the capacities and limits of government that you didn’t know in 2010, before Michael Bloomberg made you New York City’s chief digital officer1 and you served as Governor Cuomo’s CDO?

I know now that government is capable of more than is assumed, and that most of its limits are a matter of perception, not reality. In any large organization the tendency is to stick to what’s worked and to avoid risk by avoiding change. But with both Mayor Bloomberg and Governor Cuomo I had the privilege of working for leaders who said our job was to fight inertia and get things done. And with that mentality you can get an enormous amount done in government, because it is an incredibly powerful platform.

You are now a managing director of 17762, a business incubator that funds companies working to solve hard challenges in “government-dominated markets.” What big, interesting problems can be solved by the kinds of technology entrepreneurs 1776 incubates? Give examples!

This story is part of our July/August 2016 Issue
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1776 spurs innovation in industries that impact essential human needs—areas like health, education, smart cities, energy, and food. Most of the world’s biggest challenges touch those industries, and the crazy thing is that we are just starting to see fundamental digital-age innovations in these industries.

One example of a company solving a big, interesting problem is Twiga, which has developed a mobile platform that is revolutionizing the food supply chain in Africa. Right now, there is a lot of spoiled produce, wasted goods, and lost money because of inefficient systems. Twiga helps small vendors order more reliably, get inventory more quickly, buy at lower prices, and sell higher-quality produce than beforeall using a mobile phone. Suppliers get better prices for their goods, faster payment, and support for scaling. They started with bananas in Kenya.

Another example is EverCharge, which helps solve the challenge of using electric vehicles in urban areas by equipping apartment buildings with efficient, dynamic chargers. I live in New York City and drive an electric car, and I see this infrastructure challenge every day. The potential impact of EverCharge in cities like New York and beyond is transformative: it not only spurs the market but also decreases urban pollution.

When I look at 1776’s main areas of investment, I think, “Real progress solving big problems in these domains will require both business innovations and smart policy,” but I despair that political action will be all but impossible. Each of those areas has hard challenges, which seem designed to defeat the political process. From your unusual perspective3 as a serial entrepreneur and former official, how do you imagine government and innovative companies working together?

This question is at the core of 1776: enabling powerful innovations to take root and grow amid formidable regulatory and structural barriers. There’s no single route to success. Instead, we need a playbook that adapts to the dynamics of each scenario: public adoption, political will, regulatory process, etc. We call this approach “regulatory hacking”: 1776 encourages rapid experimentation to reach scale in regulated arenas. And our curriculum provides a tool kit tailored to the challenge.

I’ve seen successful examples of government working with innovators, and I’ve seen failures. Progress is not only possible; it’s happening right now, and at all levels of government. By its nature, local government is often where friction surfaces first, forcing stakeholders to find a resolution. But ultimately, for startups to reach scale, change needs to rise to the national level. It’s hard to align interests if siloed stakeholders across government, technology, and business aren’t interacting or even speaking the same language.

The good news is that the futures of these powerful actors are intertwined, and they have a vested interest in working together. They have more in common than they realize.

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