'Government 2.0': U.S. startup accelerator seeks companies to help where policy falls short

A Silicon Valley startup accelerator is looking for companies that want to fix some of the issues the government currently is falling to solve.

Y Combinator, which is based in San Fransisco and works closely with Silicon Valley, launched a request for startups that focus on addressing issues related to economic growth this week.

The initiative, announced at the Collision conference in Toronto this week, is called “Government 2.0” and is a response to what Y Combinator calls “a lack of government commitment to provide equal access to the basic services families need to thrive.” Those basic services include quality education, affordable housing, healthcare, physical safety, accurate news and information and a liveable environment.

“We believe that a new generation of technology startups are emerging who will start to address these needs,” Y Combinator said in a release about the initiative.

“If you are creating a startup with the goal of making America a better place, we want to talk to you.”

Michael Seibel, Y Combinator’s chief executive officer, said that over the last several years startups are increasingly looking to create profitable businesses that help solve problems typically addressed by governments or non-profits, such as housing affordability and education. He believes that one of the reasons more startups have shifted their focus is because of the final four years of the Barack Obama administration, as well as the last three years under President Donald Trump.

“I think people really believed after healthcare was passed that the government could re-engage with solving the most important problems in America,” Seibel said.

“Once there was divided government that stopped and it hasn’t really restarted. And so I think this generation of founders is thinking that: ‘If I can’t rely on the government to solve this problem, maybe I have to it.’”

Twice a year, Y Combinator provides $150,000 in seed funding to startups in exchange for a stake in the company. The accelerator then runs the selected startups through a three-month program where the companies refine their pitches before attending a demo day with potential investors. Some of the companies Y Combinator has invested in include AirBnB, Stripe, DropBox, Instacart and DoorDash.

The company stressed in a news release that “we do not seek to replace the government and its policymakers but seek to fund startups that create solutions that provide Americans the foundations for economic growth.”

Seibel pointed to companies such as CodeAcademy (which offers programs and courses that teach users how to code) and Lambda School (which trains people to be software engineers online for free and only charges tuition once graduates find a job that pays at least $50,000) as examples of startups that fit the mandate.

“It’s so much more exciting to invest in a company that’s financially going to do well, but will also make their community a better place,” Seibel said. “The purpose of this request for startups is to popularize that you can do that.”

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