For city permitting offices the problem is simple: too many tasks and too few people to do them. It’s a basic problem that requires an intelligent solution.
A handful of cities across California have found a solution through the new startup OpenCounter, a small company that helps local governments streamline their stampede of business permits and applications. The company does this by integrating a question-and-answer platform into a city’s website and then funneling visitors to the correct business permits and application pages for processing while also tracking data.
OpenCounter’s Co-founder Peter Koht, a self-described civics nerd who was formerly the economic development coordinator for Santa Cruz, Calif., said the service, while a helpful tool to cutting workloads, offers the primary benefit of reducing the hurdles entrepreneurs must pass over to launch companies. Indirectly, he said, this increased small business activity can translate into greater tax revenues for cities.
“One of the things cities are really concerned about is what is called retention, so as businesses grow they stay in town and their tax base stays in town as they grow,” Koht said.
Joel Mahoney, a civic technologist and the company’s other co-founder, said the name OpenCounter comes from the observation that many city departments that process business applications simply lack the resources to keep themselves open long enough to accommodate demand.
For example, he pointed to Santa Cruz, which was a catalyst for OpenCounter. Mahoney said the city’s economic development offices are only open Monday through Thursday from 7:30 a.m. to 12 p.m., tight hours that don’t fit most schedules.
"When you think about what those hours mean to someone who's working a full-time job, it becomes a prohibitive thing,” Mahoney said, referring to the many entrepreneurs who can’t afford to dedicate full-time hours to a venture.
What this represented to Koht was an unserved market of potential small business owners who could contribute to the local economy but were snared in bureaucratic limitations where funding was, for one reason or another, unavailable. Koht said small business owners typically had to work around staffing hours that had to be allocated mostly to larger community projects such as public facilities and big business ventures.
"The majority of folks that were coming to city hall and asking for help were small businesses, and I saw a real opportunity to develop a tool for this group of entrepreneurs,” Koht said.
OpenCounter Co-founder Peter Koht
A glance at the company’s development shows a strong linkage back to Code for America (CfA), a national civic tech promoting organization that brought OpenCounter into its 2013 startup accelerator program.
Koht worked with the CfA when Santa Cruz was selected to be one of its cities in 2012, and Mahoney was an inaugural fellow at CfA and has served as a technical adviser to the organization.
Mahoney said the coaching they’ve both received from the CfA and its programs has played a significant role in the company’s beginnings, not just in coaching but also in contacts and funding for the startup.
“The premise is that government IT is a $170 billion market and CfA has shown the value proposition to get new tech and lighter weight technologies into city hall,” Mahoney said.
As part of the CfA accelerator, Koht said OpenCounter received a Google for Entrepreneurs grant of $25,000 to help it get started. The company also received $450,000 from the Knight Foundation, a civic tech investment company, to support the startup’s future growth. This funding set the stage for not only the company’s launch but also its intended direction.
"[Knight’s] stipulation was that we really needed to scale the product away from just its origins and make it available to small cities across the country,” Koht said. “So both of us decided to take the risk to work on this project and turn it into an independent company, and spin it out from the city of Santa Cruz and scale it to other communities.”
Gaining clients and rolling the technology out has seen great progress. OpenCounter is gradually moving away from its Santa Cruz roots with more California clients such as Lost Gatos, Pacific Grove, Seaside, Gonzales and Truckee with additional cities finalizing contracts and investigating.
Truckee Assistant Town Manager Alex Terrazas said he contacted the two through CfA’s Peer Network, an online program for communication and collaboration among civic officials.
“We are working with them to implement OpenCounter here in Truckee. We kind of just stumbled upon them and what they were doing and then followed up on it,” Terrazas said. “We thought it made sense and fit with what we are trying to do here.”
As with many towns and municipalities, Terrazas said, Truckee is actively engaged in promoting economic growth using technology and lean government but also additional methods such as the solutions OpenCounter provides. The service he said has support of Truckee’s Town Council, and as an early adopter of the technology, the town has been working closely with Koht to provide assistance to Truckee’s would-be entrepreneurs.
“Really, the notion of making the planning counter 24/7 is really a pretty exciting concept for us to help entrepreneurs and small business owners coming to Truckee,” Terrazas said. “Our plan is to monitor activity and follow up with direct phone calls with folks who are going through that process.”
Koht said deploying the technology in a mid-size municipality takes roughly six to eight weeks both to integrate it into a website and for staff training. More demand is anticipated for the company, Koht said, considering recent interest and looking at statistics. Based on his research, Koht said there are about 552,600 new businesses created each year, and in 2009, small businesses accounted for 64 percent of new private-sector jobs. These stats and others, he said, are good odds for growth.