Tech 100: 'This is about showing what can be delivered in a three-and-a-half month period, not three years'

Alexander Holt, far right, and those who are part of the CivTech pilot with Cabinet Secretary for Finance and the Constitution, Derek Mackay

Alexander Holt speaks with such exuberance that the table he’s perched on begins to shake. “You live and breathe this stuff, this is not a 9-5 job, this is – it sounds a bit idiotic to say – a vocation.”

Holt, who ran his own business in London for seven years before entering the Scottish Government, does not fit the civil servant caricature. Then again, very little about the pilot he’s leading – CivTech – tallies with what one might expect of a programme run by government.

It’s Tuesday afternoon and in a room at the end of the Level L corridor of Argyle House – an imposing 1960s block in the heart of Edinburgh that juxtaposes with the tech scene bubbling away inside it – a handful of individuals are working away.

Eight companies – five entirely new firms, two around three years old and one of six years – are there based on their pitches to tackle societal challenges with technology. Each has a sponsor, a public sector organisation – either the Scottish Environment Protection Agency, Transport Scotland, NHS National Services Scotland or the Scottish Government’s cyber resilience team – who has presented a problem, from air quality in urban areas to getting health and social care data and analysis to the widest audience, and told them to go away and solve it in 17 weeks with backing to the tune of £15,000.

“The whole premise of CivTech is you get a whole lot of follow-on contracts, until they reach the OJEU [Official Journal of the European Union] threshold (£106,000), and it benefits the public sector because we are giving them access to talent they would never otherwise get access to and wouldn’t be on their radar,” says Holt.

“We benefit companies because we’re giving the ultimate step up into working with the public sector and helping them build products for which they own the IP and then we help them commercialise and sell. And the payback for the challenge sponsor is they ultimately get royalty-free usage of whatever system they develop.”

The idea is Holt’s brainchild after seeing first-hand the issues government faced when brought in to look after procurement for Scotland’s schools intranet Glow two-and-a-half years ago. “What it taught me was that we write specs for stuff we don’t understand i.e. we solutionise before we actually fully understand what the problem is; that we go to frameworks where the right people aren’t necessarily on them; and when it comes to attracting innovative ways of doing things, we’re nowhere in the picture.”

Holt subsequently spent six weeks going round businesses, lawyers and investors for their take on working for the public sector. “They said, ‘We hate the frameworks, we hate procurement, it’s always really slow’ – all the stuff that we’d expect. I started putting my small business hat on and thinking, ‘Right, if I was to design the ultimate programme for getting a small business to work with government, what would that look like? And if I put my government hat on and design the ultimate programme for working with the nation’s talent, what would that look like?’ And so CivTech was born.”

Six challenges were sought over a period of six months then put out for anyone, whether it be small and medium-sized enterprises, start-ups, third sector, academia or large firms, to apply to tackle. Only 14 applications had been filed on the Friday before the Monday deadline, although Holt’s anxiety soon eased as the figure jumped to 80 by the cut-off.

That was whittled down to three companies per challenge for an exploration phase, each of whom was given £2,000 to form their pitch – a unique arrangement Holt felt was crucial to show individuals’ time was valued – before one was taken forward into an accelerator phase. “With commercial accelerators you get a whole bunch of promising businesses in a room developing a solution and then they spend six months finding the problem,” he says.

“What separates us out is we have the problem, we have the client, we have the money, we have the market. In one swoop you have absolutely solved the tech conundrum because you’re starting businesses with a problem, with a guaranteed first client, contract no.1 [exploration phase], contract no.2 [accelerator phase], contract no.3 [post-accelerator phase]. And if you think for a small business starting out, to then have up to potentially £100,000 for your first gig, that’s a pretty good deal.”

For the six who made it through – that increased to eight after a wildcard challenge focused on cyber security was later launched – a whiteboard resting against the pillar in the middle of the room is there to remind them what they’re working towards. It’s blank besides a few pieces of paper blu-tacked to it. Today they read ‘54 days to go!’.

“Demo day is 11th January,” says Holt. “That’s when we get the minimum viable product out the door. If you think about the delivery of technology, this is about showing what can be delivered in a three-and-a-half month period, not three years.

"It’s about how fast we can get useful stuff that works out the door. It may only be 10 per cent of the ultimate product but it’s something.

"If you think about software development, anything that is not released is considered ‘waste’, so you’ve got to get something workable out the door. It doesn’t need to be beautiful, it just needs to work and then you build on the next thing and the next thing.”

It’s also “de-risking” a procurement process that tends to favour larger firms who can afford the time and money to navigate their way through it. “Where people see public sector as being rubbish, no that’s utter rubbish. We’re going to be the best, that’s what we can do and what we can be,” says Holt.

“Too often we’re sold to by big-tech companies, consultancy companies, who essentially borrow our watch to tell us the time and then charge us for it. The up-skilling of the public sector means we can do this stuff ourselves.”

Challenge sponsors have input on a half-day per week basis and can call a halt at any point if unsatisfied that they’re getting value for money. “We’ve de-risked this for the public sector because it’s not millions of pounds, it’s tens of thousands with contracts that have break clauses,” says Holt. “Of course we have to be diligent where we spend our money but I see this as displacement.”

Workshops are held almost every other day with speakers including Skyscanner CEO Gareth Williams, the head of UNICEF UK in Scotland, Lucinda Rivers, as well as Andrew Murphy, group productivity director of John Lewis Partnership. “What is the one thing that we can offer over any other private sector-run programme?” adds Holt. “Access.”

And yet for those walking through the double doors into CivTech, there is little to suggest that this is anything other than another budding start-up. “This is absolutely the place to be,” says Holt.

“It sends such a message for a government to say we’re going to come out of our ivory tower, we’re going to be in where we need to be and that then says to the community, ‘These guys are serious about operating in this space and it generates much more interest’.”

Indeed, in what may well be a first for government, the lease for the space was signed the very day the companies moved in back in September. “The sofas have been donated from one of the companies, the fridge arrived today, hurrah, the cameras arrived today,” says Holt.

“But that is what a start-up is all about. We can absolutely effect so much change and it’s about having that start-up mentality.”

None of the companies coming through the pilot are guaranteed funding beyond January 11 while the same is arguably true of their host. That said, Holt and his colleagues – who have been shortlisted for two awards at Holyrood’s Scottish Public Service Awards – are writing the business case for the next programme with a view to doing eight challenges plus another two wildcards.

“Obviously we’re subject to budget reviews and there are all sorts of macro stuff but with the feedback we’re getting from companies, the feedback we’re getting from challenge sponsors, it’s a no-brainer this runs again,” he adds.

“The energy in this room, we have our challenge sponsors saying they feel happiest at work when they walk into this building and we have businesses who are growing personally, professionally and product-wise - it is palpable the change we are creating, undoubtedly. The stone has dropped into the water, the ripples are going out.”  

Holt freely admits he never saw being a paid-up civil servant being part of his career path and yet one senses his enthusiasm for the role is infectious. “The beauty of this is that it is giving a mechanism to people who actually want to change in any case.

"But people talk about this stuff – there is a lot of talk about innovation but few actually do it effectively. And we have developed a mechanism by which to do it.

“Yes it is on a tiny, tiny scale so we absolutely know we’re not doing the social security system or rural payments. But this is a start of people thinking differently. And it’s not that the public sector doesn’t want to change, not at all. I think it’s just they haven’t had the mechanism by which to do it.”

'We can use this as a badge of honour to get ourselves at the table'

“Rather than it being a chore, it’s making the journey an enriching part of your experience,” says Iain McNeill, who leads on commercial and marketing activity for Learn to Love Digital, a three-month old start-up.

McNeill and his three colleagues have been tasked by Transport Scotland with promoting tourist destinations along the A9 to coincide with dualling of the road network.

Their solution is to create themed radio channels for those travelling up and down the A9, examples being one focused on the Highlands, another on clan tales inspired by the popularity of Outlander.  

“We’re working with the Scottish Storytelling Centre,” says McNeill. “We’re quite lucky that we’ve got storytellers that cover all the regions across Scotland. We’re working with a doctor called Mairi McFadyen and she’ll be finding the right storyteller to tell the right stories.”

Content will be accessed through a mobile phone app with GPS used to trigger certain items and users told when certain places are coming up based upon their interests. “The one challenge I think we have is people’s mind maps of the A9 route – you think of Aviemore, you think of Pitlochry, so everyone’s stopping at these places,” says McNeill.

“But as we know there are a lot of really interesting unique places you can visit. Our idea was how can we make people’s journeys more memorable and the way we were thinking about it was, it is not the big places you queue that makes it really exciting, it’s the places like finding a waterfall, you might find a standing stone, you might get a beautiful view.”

Their plan is do the A9 and thereafter do some more routes in Scotland before mapping out others internationally. Although only three months old, the start-up has already been allowed to pitch for another project requiring three years of accounts.

“The very fact that we’re dealing with a government body helps us get traction in the private sector world,” he adds. “It was great that we could use this almost as a badge of honour to get ourselves at the table and get heard.”