Driving towards action

This blog is the third in a series produced for a Harvard Kennedy School field class on innovation in government. Our team is working with the MassIT Digital Services team and the Massachusetts Executive Office of Housing and Economic Development. You can read about our project here and about our experience with learning about entrepreneurs in Massachusetts here.

Meeting Entrepreneurs

Over the past few weeks, the Commonwealth Team has been on the road meeting entrepreneurs of all types. As we discussed in our last blog post, our goal was to meet entrepreneurs and learn about the problems they face and the resources they need to start and operate their businesses. We wanted to meet with entrepreneurs like Carlos, the brewer we met in our first blog post. We were specifically looking for entrepreneurs that had recently opened their first business and whose business had a physical location that customers frequented, such as restaurants, stores, shops, etc. Our search yielded great results.

We met an inspiring group of entrepreneurs: a flower shop owner in Lexington, an aspiring energy efficiency advisor in Medford, someone looking to start the “Soulcycle for rowing” and, of course, a brewery in Cambridge. In just over a week’s time we met with six businesses, multiple leaders of small business organizations and even the former Administrator of the Small Business Administration (SBA) under President Obama.

After those conversations, we had hours of audio recordings and numerous spreadsheets filled with notes from our interview guides. We collected a lot of data that we are excited to turn into actionable insights.

What We Have Learned  

To help turn this large volume of data into useful trends, we turned to a tool that Mary Ann Brody from the US Digital Service  taught our team — the KJ Method. If you follow the link you can learn the specific details of what this involved, but the general principle is quite simple. Our team put all of the interesting findings from our interviews onto individual post it notes, grouped these into key themes and then voted on what we felt the highest impact insights were. We had our key themes.

The Commonwealth Team synthesizing our insights in our ‘office’, with some of our KJ results pictured behind Julia

The Commonwealth Team synthesizing our insights in our ‘office’, with some of our KJ results pictured behind Julia

We grouped our insights into the following takeaways:

  1. Entrepreneurs invest significant time, energy and resources in learning: Entrepreneurs are highly motivated to be successful and will invest significant energy researching administrative tasks they are unfamiliar with.

  2. There is no single touchpoint that entrepreneurs get information from: There are many resources available to entrepreneurs, but entrepreneurs struggle to identify them and keep track of the ones that are helpful.

  3. Entrepreneurs rely on their networks for...everything: Entrepreneurs build formal and informal networks to help them gain access to advice, capital, customers, and relationships. Those who have strong networks have a competitive advantage over those that do not.

  4. The government isn’t an entrepreneur’s first call for help: When asked where they turn for help, the government isn’t a popular first response. Additionally, early stage businesses are likely to turn to government resources for advice as they  launch their businesses, but as they mature, the relationship becomes more transactional.

  5. Users fear penalties for breaking rules they don’t know about: Many entrepreneurs we spoke to don’t have a full understanding of the permits, licenses they need and regulations they have to adhere to. They constantly fear the ramifications of not being compliant.

Some of these insights were new to us while others confirmed existing suspicions. In addition to providing new information and confirming some old information, this process taught us something else: we might have a biased representation of businesses.

Additional User Research

As we discussed the issues faced by the entrepreneurs we met, we were surprised to see that many needed help at the same stage of the process, accessing capital. We had expected  there to be a range of bottlenecks. It was then that we realized there might be some selection bias in our sample because of the way we had found the entrepreneurs we interviewed. We found many of our interviewees through the University of Massachusetts Small Business Development Center Network (MSBDC), which we learned is a resource that largely helps connect entrepreneurs to financing. Because some of the entrepreneurs we spoke to have come to MSBDC for help with building a business model and financing, we think our sample might be skewed toward businesses with that specific issue.

The only way for us to confirm this view is to meet more entrepreneurs, this time from different sources. We have arranged for meetings with businesses in the East Boston Merchant’s Association, a group made up of predominantly Hispanic and immigrant entrepreneurs, as well as some others. With a few more interviews, we will be able to refine (or confirm) our insights and move on to developing a solution.

In many ways it feels like we already know a lot about what could help entrepreneurs like Carlos, but we also know that we have a ways to go to figure out what could have the greatest impact.

-Artyom, Brian, Julia, Kate & Nisha

So Many Questions, So Little Time

This blog is the second in a series produced for a Harvard Kennedy School field class on innovation in government. Our team is working with the MassIT Digital Services team and the Massachusetts Executive Office of Housing and Economic Development. You can read about our project here.

One month into our project with the Commonwealth of Massachusetts, we find ourselves with more questions than answers. We have been hard at work figuring out the best way we can make it easier for entrepreneurs like Carlos, a micro-brewer, and Johanna, an app developer (more details about their stories can be found here) to get their businesses started. When our team of five sat down to start our research plan, we quickly learned what many budding entrepreneurs already know: there are endless things on one’s mind when trying to start a business! With so many things to worry about, entrepreneurs like Carlos and Johanna need as much help as they can so they can spend their time where it matters, working with their customers.

So, where to start? Like any good design team, the answer was simple: the whiteboard!

Nisha adds to our endless questions.

Nisha adds to our endless questions.

After a few pads of Post-It notes and perhaps a bit too much coffee, the whiteboard was covered. We had many ideas, but for every new idea there were at least half-dozen questions. What is the hardest part of starting a business? Is it the same thing in Worcester as it is in Boston or Springfield? What kind of businesses are we talking about anyway?

After trying to guess the hardest part of opening a barbershop in Lexington and heading towards a debate about the role of government in the Massachusetts economy, one of us had enough and asked: “Can’t we just ask someone”?

So we did.

We turned to our clients at the MassIT Digital Service (MassIT) and the Massachusetts Executive Office of Housing and Economic Development (HED) to help us understand what they thought we could do that would help Johanna and Carlos out the most. Before we made the trip to their offices, we came up with a set of project goals:

  1. Our project needs to address a single, discrete problem, not every issue that faces a prospective entrepreneur.

  2. Our recommendations need to be something that HED has control over so that they can actually put our tool to work.

  3. Our project should focus on the most disadvantaged users. By making the process easier for them, we can improve it for everyone.

Sitting in HED’s 31st floor boardroom overlooking the Boston skyline, we started to narrow things down. The HED team told us that they always hear about the same three pains from small businesses:

  • Taxes are too high!

  • I can’t get enough good employees to run my business!

  • There are way too many regulations, I can’t even figure out what I need to do to follow them!

This gave us our starting point. As the conversation went on, we started to put these issues through the above filter and built a hypothesis about where we could have the most impact. While taxes are probably top of mind for all businesses, changing the tax codes falls well beyond the reach of our team. Massachusetts’ record low unemployment is another policy issue that we can't (and don't necessarily want to) fix. But making it easier for a small business to understand and comply with regulatory requirements felt like something we could wrap our arms around, even if we couldn’t change the regulations themselves.

Even with this more focused scope, we were still wondering: who is our target user? As you can imagine, Carlos and Johanna have different regulatory requirements and resources available to them. For example, Carlos the microbrewer may be having trouble navigating health and safety licenses and permits, while Johanna the technologist  may not, at least for now. After some discussion, we thought it would be best to focus on businesses with relatively high regulatory requirements and low resource levels - small business owners like Carlos (don’t worry Johanna - we’re not going to forget about you).

What’s Next?

With our new focus in hand, it’s time to get to testing it. We have been hard at work making a list of users to interview so we can learn about their pains starting a business. After contacting several Chambers of Commerce, small business associations and Regional Economic Development Organizations, we have started to make our list of businesses to visit across the state. From florists to breweries to auto shops, we will be visiting businesses over the next two weeks with two objectives:

  1. Confirm that navigating regulations is a real problem for businesses, and that it’s where we will have the most impact

  2. Understand where the pains are in the process today and set us up to build a hypothesis for how we can help

Once we have spoken with enough businesses and have developed a hypothesis, we will move on to distilling our insights and developing a solution.

-Artyom, Brian, Julia, Kate & Nisha

Getting Down to Business in Massachusetts

Meet Carlos. He’s a 56 year-old Massachusetts resident who lives in Springfield, MA. His dream is to start his own microbrewery. Carlos has been excited about this project for years now and is finally making his dreams a reality. He has found a great location for a local taproom, has initial funding, and most importantly, has perfected his signature craft ale. In his mind, all he needs to do is fill out some paperwork and, he will be able to share his craft ale with others.

Meet Johanna. She’s 22 years old and has just graduated from Worcester Polytechnic Institute. During her time at school Johanna partnered with a couple of friends to create an application that maps incidents in high-crime cities so citizens and tourists can make more informed decisions about their travel to and through neighborhoods. Johanna thinks this application has a lot of potential and can be successful in high-violence cities such as Caracas, Venezuela, San Salvador, El Salvador, as well as other Latin American cities. Her former professor and advisor lives in Worcester, MA, and Johanna could benefit from his proximity, so she is looking to headquarter her company in Massachusetts.

What Carlos and Johanna have in common is that they both, despite having great ideas, need help getting their business started. The Commonwealth of Massachusetts wants to provide the tools, services and expertise to help these entrepreneurs, and others like them. That is where our student team comes in.

Meet The Team

We are an interdisciplinary student team in the Harvard Kennedy School Technology & Innovation in Government field class taught by Adjunct Lecturer and former U.S. Deputy CTO Nick Sinai. Our team members are:

  • Artyom Anikyev, a dual Masters in Public Administration and Masters in Business Administration student from Russia who, as a former civil servant, has experience with the relationship between state and businesses.
  • Brian Etienne, a Canadian pursuing a joint Masters in Public Policy and Masters in Business Administration who has a background in management consulting and private equity and has advised businesses around the world on their growth plans and operations.
  • Julia Gutierrez, also a Masters in Public Policy student from Mexico/Texas who has worked with governments and for governments and has an understanding of how citizens choose to interact with their government.
  • Kate Welsh, a Masters in Business Administration student who has a background  in design thinking, a methodology that fosters innovation by understanding and integrating the needs of people.
  • Nisha Swarup, a Junior Computer Science major at Harvard college with amazing coding skills and expertise in agile methodologies.

The Challenge

Our job is to help the the Commonwealth become an even more helpful resource in launching new, exciting businesses.  For example, Carlos needs to register his brewery with the state as well as obtain all the required licenses to operate as a food establishment and liquor establishment. While Johanna needs to register with the Commonwealth, she’s also looking for seed capital and is interested in learning how the Commonwealth can help her start and eventually grow her business.

Our team is excited to work with members from two Commonwealth offices, MassIT Digital Services (MassIT) and the Executive Office of Housing and Economic Development (HED).

Together, with our colleagues at the Commonwealth, we seek to answer the broad question, how might the Commonwealth better encourage and enable prospective entrepreneurs to start and grow a small business in Massachusetts?

Answering this question will be challenging. Carlos and Johanna represent two entrepreneurs in the Massachusetts ecosystem. Our initial hypothesis is that there is a wide range of entrepreneurs that can benefit from better interaction with the state.  Our goal is to understand the problems entrepreneurs have and, together with MassIT and HED, develop solutions that will encourage and enable different types of entrepreneurs to start and operate businesses in Massachusetts.

Next Steps

During the next couple of weeks our work will focus on mapping and understanding this ecosystem of small businesses by reaching out to entrepreneurs, interviewing them extensively, and learning about what they need and how can the state help them when it comes to starting and operating their businesses.

Follow our journey—we’ll update you soon!

Artyom, Brian, Julia, Kate, Nisha