a16z Podcast - a16z Podcast: Government Transparency Powered by Software

Episode Date: July 10, 2014

What if we could tap into our government with the same speed and ease as our smartphones and search? Can technology make a difference in how government operates, and how we citizens interact with it? Two-time Mountain View Mayor Mike Kasperzak, OpenGov CEO Zac Bookman, and a16z’s Tom Rikert discuss government’s historically uneasy relationship with technology, how a growing trend in government transparency is being powered by software, and why you should be glad your local city council takes its sweet time to pass a budget.

Hi, everyone. We're here today with a very special A16Z podcast. My name is Tom Reichert. And today we're going to be talking with the CEO of OpenGov, Zach Bookman, and also Michael Castorzak, who is a council member of the city of Mountain View, California, and the former mayor. I'm a partner here at Andreessen Horowitz, and I co-led an investment recently in OpenGov. So I'm very excited to talk with you about technology and government. I think the innovations at OpenGov and other companies are doing can make a difference for everyone in our country. And so today we want to talk about some of those trends and how to work with government

and some of the opportunities for entrepreneurs. So I'll first ask each of our guests here to introduce themselves. So, Zach, if we start with you and hear a little bit about yourself in OpenGov. Glad to. Thanks, Tom. My personal background, my first business was when I was eight years old back in Maryland.

I grew up near government, near Washington, D.C., but I started mowing lawns and then went to study government at the University of Maryland, later went to law school and did a master's degree in public administration before going to Mexico, where I studied corruption in the Mexican government. I later went to Afghanistan and served as an advisor to two United States Army generals on the Transparency Task Force that was set up by General Petraeus at the ISAF headquarters. And we started OpenGov in the late 2000s after, well, we started looking at data visualization in the late 2000s, after we saw it two,

two major trends. One is that post-recession government revenues were drying up and everyone in government and out of government was wondering, hey, where's all the money going? How can we see this better? And at the same time, there was the rise in the cloud and in web-based technologies, things like Teblos. And we thought the latter could help the former. And we went and talked with cities in the Bay Area and the state of California and said, hey, give us your budget data. And we can help you visualize it and analyze it and share it with people who need like your mayors and legislators and citizens, and they said, oh, this sounds useful.

How do we get to our budget data? We said, well, you're the CEO. Just send it over. And we sat and we talked with them, and we looked at their systems and discovered an epidemic in the United States. And that virtually every state and local government there's about 90,000 in the United States

is using software that's often 30 years old. And we saw a great opportunity to help those who are running governments and to help those who rely on the services and goods that governments provide. Yeah, and along with the this software, which is decades years old in a lot of government offices, we're seeing that change, but also the people who work in government, there's a rising group of millennials and people who are technology natives who are now entering the public sector and looking at how they can

bring their expectations and knowledge of how to use technology into their roles there, and also as citizens. So, Michael, maybe you can comment on just how technology changed your perspective and kind of how a local government here in California has been working. Sure, and I'll give you a little bit of a resume a little bit, too, is, as you said, I've been the mayor twice in Mountain View, and, of course, most people now know Mountain View. There was a time when nobody knew where we were, but first we started the Silicon Graphics, and now we've got a little company called Google over there. So they're always fun to have around. Technology in government, you know, a lot of people sort of sometimes thinks it's a bit of an oxymoron, a little bit like military intelligence. Partly because there's so much inertia in government.

Things don't change quickly, which is usually a good thing if you really sit and think about it. Mountain View just this year hired a CIO is part of, is head of, is one of our management team, just because we just had random acts of technology going on in the city, no central drive. So it's really important, but there's a lot of people that have been in government for a long time that I don't think they resist it. They don't resist technology change, but it's unfamiliar. And nobody has time to get out and really spend time learning something new. And that resources are so limited in government, which is probably one of the biggest challenges.

So one of the benefits of OpenGov is that it's allowing much more data transparency, right? being able to surface things that before were locked away in documents and locked away in file cabinets behind closed doors and offices that were open, you know, between 8 and 2 p.m. So now with this data sharing, how is that going to change how local governments interact and, you know, what new dynamics can occur and how can governments run more efficiently, given this openness of data? We don't know. And so how to use this, okay, this is new. You guys, the developers, have a great idea, great vision of what this can do, and that's there, but we haven't ever thought about it that way. So how do we use this? What can we use it for?

Involve our social media person to start putting it out there, always to start using it. And as that changes, I think we will see how it's used differently in-house and how the community can really get out there. and start using it. I would interject here. I take a lot of onus. I think the onus is onus is on open gov to help the customers realize the value to see the use cases. It's a bit of a give and take because we're learning so much from our customers by having Mayor Casperzac around, ask him questions, have his staff engaging with the software. The same goes for other customers.

Mayor Garcetti in the city of Los Angeles two months ago released his first proposed budget as mayor to four million. Los Angelinos using OpenGov software. He gathered the whole LA Press Corps and brought them to City Hall and stood there with a five-foot television screen and walked through the budget and allowed them to drill down and see basically how $22 billion is planned to be spent across the city. And that was exciting to us because, believe it or not, we hadn't really thought through, wow, this is a perfect vehicle for the mayor of the council to stand before citizens or even before committees and other things and actually convey this critical information rather

than have a two-page budget book printed out or circulate a PDF. And there's so many use cases like that that we're actively developing and that's really the power of basically bringing the internet to the finances and budget of government. So a follow up to that is,

so what is the implication of this? So you go from a 200-page book to a five-foot television screen, but what changes in how the government runs when they have access to information or they can share it. We think about the network effects of a lot of different towns

or cities to even be able to share this information with each other. What's the longer term implication here? Sure. Let me paint a few pictures here and then I'll turn it over to Mike as well. And I'll just rapid fire here. Not unlikely that a member of the community asks the mayor,

hey, how much have we spent on police salaries over the last five years? Until OpenGov, the mayor doesn't have any tools at his disposal to actually answer that very basic question. Post-opengov, the mayor can take about 10 seconds and do it. Post-opengov, the citizen can take about 10 seconds and avoid the question in the first place. Another use case, that citizen's going to go ask a question of the administration in the government. And these are people who have tons of work going on and have to

do different things. And now a request comes in that they need to respond to. And they don't have any tools at their disposal to respond to it. So why don't we go have the manager, who's a highly paid senior executive, call IT to run a report or an object query from the 30-year-old financial management system in order to respond to a basic question from a citizen and take a couple hours out of two or three people's day to get that information out to the public. Not the best use of resources for really anyone ranging from the citizen to the senior executive to the IT team. Third use case, that citizen trusts his or her government just a tiny little bit more and that government can start to actually work just a little bit better for the citizen. Imagine you need to pass

a bond measure or a tax measure. This is going on in another open gov customer, namely the city of Union City, California. They're using our new balance sheet visualization and plan to make a proposal to their community for a tax measure. When you're going out to raise money to build a bridge or a school or a library and your citizens trust you

more or they understand why you need to do something, you've just generated revenue for the government so it can provide goods and services to the citizens. I could go on and on and on, but these are the use cases that we're developing in the ROI that we're seeing. No, I was just going to say, I mean, you know, all of those are true.

I mean, one of them that he was just talking about, our issues around, and we just were told this the other day, we're having an explosion of public records requests, and a lot of those are financially based. And having participated in a webinar this morning, was learning about one of the products where you can actually go in and sort all the data. You can find every check written to this person much quicker

than having a highly paid, you know, know, city attorney going through and going through the record. I mean, and that's just people responding to information requests as opposed to actually doing the people's business. Knowing is what's going to make this really exciting. All right. So let's fast forward to the city of the future, right? So we're talking about some examples of streamlining how information shared and kind of the

checks and balances and how that fast cycle can run with the public. How will the public interact with the government in the future? How will vendors interact with the government in the future? When maybe there's an API for government to be able to get to this data and to build applications and I want to hear what you think the future holds for all the different constituents. There's a whole bunch of things jumping out to me. I'll just, I'll jump. I'll fast forward a year or two, although this is really happening right now.

We are building the capability for cities and other governments to start comparing their finances to each other. to start networking. Imagine if you're running a government. You need to compare how much you're spending with how much you budget it, whether you're running the whole government, the police department, one division within the police department. That's a laborious process in and of itself, and that's basic management reporting. We've unveiled the capabilities to do that with the click of a few buttons. Imagine being able to do that running a city or running a department or running a division and then comparing your budget or your actuals with 50 or 150 other governments across the platform to see how comparable cities or to find comparable cities and see how they're

spending their money. That's the heart of business intelligence. If you're running a startup, how much should I spend on marketing? Tom, how much should I spend on operations? Well, I need that advice. I might want to talk to other entrepreneurs or other startups. Governments need to do this too. How much should you be spending on library services? What about community theater? What kind of community do you want to run? Who do you want to model yourself after? These are questions and these are capabilities that software can grant. And so we see a world in which governments can learn from each other, network, and tighten that community of administration so that it can be more efficient and data-driven.

I think there's also a more nebulous thing. And I think one of the things this does is citizens start having more trust and faith in their governments. I mean, when everything is out there, you know, open the kimono, as they say, you know, you can see everything and people can, you know, they can see what we're spending money on and they can see where it's going and they can see where it isn't going. And I think that really is important in a day and age where people are actually having less and less faith in their government. And that interesting point thinking about the future and kind of what the average citizen will

look like, we assume they're going to be very technology savvy and be able to kind of engage with these systems that might be out there, but there might be folks who are not tech savvy, right? There might be the citizens, so you just refuse to do the new thing. And unlike a corporation, you can't fire those as customers, right? You know, the people are still on Windows XP. You know, they want to upgrade, and Microsoft eventually says, you know what, you can't upgrade it anymore. You've got to move on.

You can't do that if you're the government. So how do you think about the kind of the late majority and the laggards who may not want to engage with the government using any of these new systems that we're dreaming up? It's a tough one from my perspective, because, As you say, you can't just say this is the way we're going to do it from now on and because every citizen has a right. And unfortunately, I think what that means is there has to be a certain amount of sort of say, you know, analog service delivery, analog information delivery until people do come along. Now, surprisingly, though, I mean, my mother is 85 years old and she asks me every day how to do Facebook and every day I tell her and every day she writes it down and every day, every day she asked me again. But she's trying. And I think we are coming along and there will,

I mean, there are people that won't read the newspaper. There are people that won't watch the television and they are just not going to adopt technology. And at some point, I think governments large and small are just going to have to move on. And, you know, there will be alternative channels. But if you want to read it, you're going to have to come down to the library and read it, we're not going to mail it to you like we've done for the last 20 years sort of thing. Michael, earlier you made the point that government may not move at the speed of corporations and maybe that's the way it ought to be. Can you comment more on that? Sure. You know, governments are by their nature risk averse. That's one thing. They have a huge

public trust that they have to maintain and there is a public process. You know, public hearings, the rights of people to come out and be heard. And that is a slow process. And it's part of the whole transparency world. We do stuff in public. We encourage public input. And if you short circuit that, there is heck to pay. So I'd love to add some color to that.

Most governments in the country, mind you, as the mayor noted, are run by professional administrators. It's only the largest governments in the country where the senior elected official, like the mayor, is also the CEO. Most governments are run by councils, which are effectively legislatures. And what you do when you have a council form of government is you've introduced consensus decision-making, if you will, or majority decision-making. And that's just naturally less efficient. Just go look at the United States Congress. But also the very idea of budgeting is designed. I don't love this word anti-corruption. You might as well just call it transparency, but it's designed to map out where all the money is going to go so that you can't

make snap decisions and so that you know what's going on and so that the money goes where it's supposed to go. Well, that's a really laborious process. We don't typically live our lives as individuals like that. You don't map out, you know, what you're going to spend on everything, how much you're going to spend on restaurants this year, how much are you going to spend on shirts and clothes. Actually the government almost does that and that's a very complicated process and it

requires lots of coordination. Every division director rolling up a budget to department heads rolling up a budget to finance and managers and back down and that process right there is slow. Yeah so we might be able to say that technology may potentially be able to automate some of those checks

and balances right that's built into the system to prevent things from going off the rail or from any behavior which isn't above board. And that's partly, I think, the benefit of all the technology that can be done now in the cloud and be accessible, but too much broader audience inside of the government. On that note, what we really see is the power of technology

to help people do their work better so that if we do have a large workflow to go through and there's portions of it that can be automated, let's automate it, let's let software do the hard work. so the council or so professional finance managers and senior executives can use their brains in their job and not have to rifle through the data just to get what they need to do their job. So we've talked about how far technology could go, but what are the issues that technology won't touch?

Back to the study of corruption and kind of fighting that issue in government, that's a people problem more than a technology problem. What are the things you think are still fundamentals that maybe technology can maybe approach, but there's still kind of other changes that need to happen in kind of how people work with technology. What it constantly amazes me in the world, you know, and transparency, hopefully you can't hide anything so people see what's going on.

And so issues of potential corruption are eliminated. But what I find is when there's corruption, it's people doing what they know is absolutely wrong. And all the laws in the world don't stop people from doing that. And I don't think anything you could do in a technology world really can affect people deciding to do the wrong thing. I think financial transparency can create a great norm and help communities and help administrators. But I would note maybe as a side note, governments in our experience, and we work with many dozens of governments across the country now in 20 states, they're not filled with corruption. It doesn't work quite like that.

And we don't see ourselves as anti-corruption. It doesn't work anything like that. Crusaders. Yeah, there's not like a line item for corruption in a government budget. In fact, governments typically, unfortunately, as is the case in life, have to operate in a zero-sum game where you can buy more parks or you can buy more police officers, but you can't have more of everything unless you want to raise more money. And so this is open gov and tools like it and and the growing trend toward more technology and government can greatly help in terms of efficiency,

but it's not really about gotcha. It can help reporters do their job. It can help citizens engage. All of these things are critical. As a great manager in a local city here once said, you know, citizens often get the government they deserve, and what he meant by that was citizens, you know, are they engaging? Do they even know how a government works?

Do they even know the difference between a manager and a mayor? And you can get answers to that with technology, and that can help strengthen the kind of glue of democracy. And so it's not really about, wow, this is going to open up, you know, show that hidden pot of money or, you know, expose corruption or, you know, I got you. And more about how can people do their jobs better, how can citizens do their jobs better? And I think, you know, ultimately in sort of the government world, it's all about community. And there are lots of ways to do sort of digital community. Facebook, next door, you name it. But still, people have to get together.

There still has to be a sense of community. And I really don't think that's something that actually can be replaced, should be replaced, you know, until we're in a Star Trek episode, and we're all just ethereal brainwaves and pods. Well, I want to thank both of you for being with us today. And I've been a very interesting conversation. And Zach, we look forward to OpenGov's growth in Mexico's stuff. waiting to go down there and fix some of the problems you've identified that kind of got you

going on this journey. And Michael will be keeping our eye on Mountain View into seeing all the innovative things that town is doing. And again, thank you for your time today. Thanks very much.