Why Big Companies Shouldn't Solve Big Problems

This post is the second part in a discussion on effective future-proofing of cities. You can read part 1 here. 

In the U.S., particularly, few major metropolitan areas are new in any sense of the word. While some cities have declined from the designation of major (take Detroit), for the most part, big cities are those that have been big for a long time. American cities are thus constrained by existing, often dated, infrastructure and zoning in their quest to become “smart”.

The slower speed of urban development in the US is a by-product of having such a developed economy. If American cities are big, bureaucratic publicly-traded companies, then Asian developing cities are lean, mean startups. The developed nature of the U.S. is largely what allows economic growth and development to occur, as it has been established time and time again that infrastructure and regulation is a critical component in encouraging investment. At the same time, the US is developed in a manner reflective of the 20th century - not the rapidly-evolving modern world. It often seems as though proposed changes are rather black-and-white: either you do nothing and keep a city dated, or you spend billions of dollars on making it “smart”, powered by Big Name Brand Company.

Beyond simply the development of smart cities in the developed world, how are developing countries who aren’t tiger economies to afford the future-proofing of their city? Relying solely on large-scale smart cities technology is a recipe for failure. Throwing money at a problem can solve it, but it far from guarantees the solution is the best. In fact, with unlimited financial backing, it is much more likely the production of solutions will be inefficient.

Individuals working with limited resources and funding find themselves getting quite creative with their solutions. Yes, I’m talking about startups here - lean, mean, innovation machines (too cliche?). It is startups that have created some of the most heralded and innovative internet of things and smart cities technologies. Take Nest and BigBelly, for example.

Startups are in the best position to create small interventions - both in cost and size - that have large impacts upon efficiency, modernization, and city usage (i.e., enjoyment). Every major cloud-computing management company has entered the “smart cities” space, but their offerings are not much different from prior attempts to sell the same service under new buzzwords. At the end of the day, we are talking about data management here. Cities do not need to expend several billion dollars to develop a network of sensors and smart infrastructure components. When it comes to future-proofing cities, small is better.

Allowing a singular company to manage an entire city's future development is risky in and of itself. Choosing this company solely because of their name clout is even riskier. By putting components of city modernization in the hands of multiple small, agile, companies that are specifically dedicated to solving that issue--and that issue alone--one can almost guarantee the end result will be better. A single vendor powering an entire city also ends up reducing the autonomy cities have for future change, constraining them to work within a company’s ecosystem.

As an organization dedicated to creating future cities, Soofa naturally applauds any efforts cities take towards modernization and efficiency - big or small. But, we are also a startup dedicated towards creating change with small, deeply thought-out interventions. We believe that small interventions are the most effective vehicle for modernization, and provide cities with greater autonomy at a lower cost.

To get back to the publicly traded companies vs. startups analogy, you don’t bring a big bureaucratic company in to solve the problems of another big, bureaucratic company. You bring in the hot startup, the small consulting firm. As counterintuitive as it may sound, big problems don’t always require a big solution. Using small technology interventions to tackle something as intimidating as the future-proofing of an entire city can seem intimidating, like David going up against Goliath. The critical thing to remember is that in the story, David won.