Tuesday, October 07, 2014

Deconstructing Governments: Is Estonia the first Full Stack Government Startup?

The purpose of a government is provide services to its citizens. After all its all about 'for the people'. Many of these services are not related to a geographical boundary - a few like fire, safety and roads are. This is why we already experience multiple government bodies - city, county, state and federal but they are all structured linearly, one inside the other like a Russian doll. It does not have to be this and Estonia is leading the way.

by permission (Creative Commons)
The governments don't have to be structured this way geographically. It can be a graph of nodes. Think of each government today - city, state,  etc. essentially offering an (outdated) API to a set of services they offer - registering a title for example.

But there is no reason why title registration has to be done by your county. They need the information but the actual act can be performed by a third party and the government can make an API call to verify this information. (Yes, I know title companies help do this but they are acting as an agent not a their own system of record.)

Break up the Government API
Today, governments are like a mainframe system - everything is mingled into one giant, expensive, outdate machine that is sub-optimal. We know that a distributed architecture works better in most cases - and I would argue its true for government too.

The government of Estonia is embarking on one such journey - to offer us many unique online services by taking the first step of offering an online 'government issued online identity'. Think of it in simple terms as somewhat similar to getting a Facebook account and using it to log in to say a news website. Similarly, you will be able to use your Estonia issued electronic identity to do things like sign papers (legally in EU).

Start Simple
In the beginning, we will see very simple services like identity used for online signatures and other basic stuff. Today, we use our email address and password to sign using EchoSign or DocuSign - this will be a step up.

Over period of time, you will be able to create legally viable business entities. I am not aware of Delaware's plans but there is no reason why Delaware could not create an API for creating C corporations for example tied to my identity.

The Beginning of the End of The Big Government
Today, as a resident of say New Delhi or San Francisco, I am beholden not just the local laws but also to the local bureaucracy. My cousin had to bribe someone in India to simply attest a copy of his birth certificate which he wanted to use in Australia. For services like this, there is no reason to rely on your local government service provider. As long as its consistent with the law, you will be able to use any service provider globally.

Balaji and others at Andreessen Horowitz have talked about government as a trillion dollar market and I think they are right. As governments get deconstructed, there will be room for private companies not only to make governments better but to replace entire government departments and programs with private service providers - the 'full stack' startup for government sector is not a Palantir or a OpenGov (read this) but Estonia and many other full service providers.

New Motto: Don't just make government better, replace it.

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