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Modifier 15 September 2021
by Marta García París, UIA expert

Start-ups’ business models as inspiration for local innovations: the case of EPIU

esquema
At corporate level, a business model is a strategy for operating a business. It describes how a company will generate value for its customers. Although public services work differently, it is always interesting to extrapolate some of the aspects from corporate world into the local administration. An interesting model to explore while implementing complex innovative public services is Lean.

The concept of a Lean Startup business is about shorten product development cycles and rapidly discover if a proposed model is viable. Although Lean management principles were pioneered in the private sector, they are transformative for public sector too as local authorities can capture the benefits of Lean thinking to improve citizens’ services, save time and reduce the use of resources. To set up a public service in the most efficient way in terms of time and money spent, should be one of the most important priorities from public bodies.
The central component of Lean methodology is the build-measure-learn feedback loop. Once the problem that needs to be solved is identified, a minimum viable product is developed to learn as quick as possible and adapt the final product to real conditions. When measuring reality, it is easy to pivot and adapt the final design to reduce risks. This methodology is used in private companies and their products, but it is transferrable to public services. From Minimum Viable Policies to Minimum Viable Services, public sectors and in this case, local governments, can take advantage from the experience at private level.
EPIU (Energy Poverty Intelligent Unit) is a UIA initiative aiming, amongst other objectives, to develop an innovative public service to identify and tackle hidden energy poverty in Getafe, a 185.000 population municipality in Spain. To assume that invest resources into iteratively building the service to meet the needs of vulnerable people in the municipality can reduce risks, makes the project more efficient in the use of time and money.
This report deepens on how an initial awareness activity has been transformed into a Minimum Viable Service (MVS) and how startup’s business models are sometimes valid for local innovations too.
 

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Minimum Viable Service (MVS) within UIA context

The UIA Initiative offers the possibility for urban authorities to test new and unproven ideas that are too risky and experimental to be supported by mainstream funding. The main objective is to verify how the initial hypothesis react when facing the complexity of the real life, and if the testing phase is successful, to prepare the upscaling phase. In fact, it responds to the logic of Lean and Minimum Viable Service (MVS) although within a longer period.

In projects like EPIU, it can be understood as sub piloting to feed the main pilot service. EPIU is going to test a complex innovation service to identify and manage hidden energy poverty in Getafe’s municipality and can take an enormous advantage from iterating “functional prototypes” during the scope of the project.

PIOHS (Healthy households’ Office point of advice): from an awareness activity to Minimum Viable Service (MVS)

One of the main outcomes from EPIU is the Healthy Households’ Office (OHS), a public local service displayed to identify situations of hidden energy poverty in Getafe. The design of an effective public service such as this office, requires time and organizational efforts from different areas in the municipality, so therefore, the launching is planned by the end of the year.

Vulnerable consumers would be identified and referred to the Healthy Households’ Office (OHS) to be assisted and assessed with tailored solutions. The image below shows an outline of how the service would work. The service is still under design phase and some aspects may differ at a later stage.

Service

This public service will cover citizens from Margaritas and Alhóndiga’s neighbourhoods and will display around 200 solutions at different levels: household, dwelling and neighbourhood. One of the objectives of EPIU is to design and operate an intelligent data analytics system focused on the identification and prediction of energy poverty situations which will define clusters of population using data on energy consumption habits and real socio-demographic data, income or building characteristics. Therefore, the scope of the Healthy Households’ Office (OHS) is clear and, as the ultimate objective is to emerge hidden energy poverty situations, services provided by the office will need to collect data and information to feed the system learning process.

The initial planning was to design and prepare the structure of the OHS and then launch it directly and open it to citizens as this is the way local public services normally operate. However, this implementation methodology has risks as design under paper is not the same as reality. Furthermore, opening the OHS from zero would represent having no real data of implementation at the beginning. At this point, EPIU consortium started to swing the initial strategy to improve and ensure an effective service design.

EPIU initial planning also foresaw an activity called Oficina de barrio de los derechos energéticos (Energy Rights’ Office) to raise awareness amongst La Alhóndiga and Las Margaritas neighborhoods. This activity was planned to provide open energy advice for 3 months before the launching of OHS to create an energy culture in the targeted areas. However, if widening the scope of this activity, the contact with citizens could provide with valuable data and information to better outline the Healthy Households’ Office (OHS).

Therefore, and having this awareness action foreseen, EPIU consortium evaluated the possibility to swing and pivot this activity into a pilot OHS office. The idea of launching a pilot of OHS would give the chance to test the service in the real conditions and users and will provide the intelligent data system with data. Instead of a minimum viable product (MVP), it can be called a minimum viable service (MVS) as this piloting experience will allow EPIU team to evaluate the service before it is released in Getafe by the end of the year. Furthermore, it would be an opportunity to make EPIU visible at targeted neighborhoods.

PIOHS (Healthy households’ Office point of advice) activity

The Healthy households’ Office point of advice (PIOHS) is primarily launched as a learning opportunity. This pilot does not hold the complete portfolio of services, but it is an open service to neighbours that will allow users to judge whether the Office responds to their needs. Besides, to be able to collect data from users in this pilot phase would let EPIU team to see the potentiality of OHS and to tune the predictive tool.

ACA (Asociación de Ciencias Ambientales) is the partner in charge of the implementation of PIOHS with the support of Khora Urban Thinkers, Getafe Iniciativas and EMSV.

The service was set up on June 1st and will operate until the end of 2021. It has two antennas, one in each neighbourhood and provides the service once per week.

structure

An energy agent receives PIOHS’ users in the public community centre. The idea is to test PIOHS providing service both to referrals from other services (charities, social services, etc…) and to citizens that directly request advice. At the moment of writing this report, formal referrals procedures have not been stablished yet although some users are referred informally taking into account that social services centres are at the same facilities. However, it is planned to work on the formalization of this referral procedures this autumn in order to learn and set the final OHS referral’s protocols.

The entrance is planned as a visit-by-appointment, but PIOHS is handling users that come directly to the facilities too.

PIOHS has been designed to offer four kind of actions: to give advice/information, to manage contractual issues, to make simple energy audits and to refer to other public services. At this moment, the service is centered on providing information and advice and on managing contractual issues. Households’ visits will be operative in a later stage.

The idea of launching PIOHS as a learning service for the future OHS was also to collect data and feed the intelligent predictive tool. However, some complexities related to data protection have raised so at this moment, only some parameters are being collected.  This was not foreseen but it is good to identify these complexities during this period as it minimizes risks on the set of the OHS.

It is soon to assess the impact of the experience, but it is a reality that PIOHS is influencing the way OHS is being design. Apart from learning from the service itself, this pilot office gives also direct information from La Alhóndiga and las Margaritas as it operates from municipal community centres. Having the chance to identify real needs from the community is essential to adjust OHS design.

PIOHS as a minimum viable service, as a pilot experience, is a practical experience for the OHS office that will not only improve this public local service but also transform it for better.

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