A new generation of entrepreneurs is using government websites to generate big bucks, reports Angus Loten in The Wall Street Journal (1/9/14). Even more important, cities that make their data publicly available – Seattle, Chicago, Austin, Baltimore and South Bend – are experiencing a rate of new business formation "ahead of the national average." For example, "the rate of new business formation in Seattle in 2011 rose 9.41% in 2011, compared with the national average of 3.9%." Among the entrepreneurs is Matt Ehrlichman, founder of Porch.com.
Porch "last year built an online business in part using Seattle work permits, professional licenses and other home-construction information gathered up by the city’s Department of Planning and Development." Porch is free, but "charges a $35 monthly fee to industry professionals who want to boost the visibility of their projects on the site." Users are treated to a "searchable database … to compare ideas and costs for projects near their own neighborhood." Matt now has 80 employees, and has "raised $6.25 million from angel investors."
Currently, "some 175 federal agencies … have posted more than 88,000 data sets on data.gov, the federal government’s open-data site. And more than 43 cities have followed suit." A company called Socrata, meanwhile, "makes the back-end applications for many of these government open-data sites," to support this emerging entrepreneurial ecosystem. One obstacle is "the lack of standards for storing digital records, which can make it difficult for smaller tech firms to expand from city to city." Another is privacy concerns, as some fear that the data could be used for nefarious purposes.