Santa Cruz’s Peter Koht went from running the city’s Economic Development Department to becoming an advocate for would-be entrepreneurs with OpenCounter.

In 2012, a Code for America team came to Santa Cruz. They branded the downtown bike lockers, designed wayfinding signs, held weekly skillshares, built an open data portal for the city and created OpenCounter, a platform to streamline the process of starting a business in town. The goal for OpenCounter was to take a complex process involving numerous forms, fees, labyrinthine instructions and data redundancies and turn it into a user-friendly process that clearly lays out what steps are required to start a business, how long it will take and how much the whole thing will cost.

The Code for America team is now gone, but OpenCounter is thriving. In June, the Knight Foundation awarded the OpenCounter team—co-founders Peter Koht, the City of Santa Cruz’s former economic development director, who spearheaded the Code for America Santa Cruz project, and Joel Mahoney, who was a 2011 Code for America fellow in Boston—$450,000 to build a scalable application that other cities could utilize to streamline their own process and tap into the entrepreneurial potential of their communities. This allowed Koht and Mahoney to transition OpenCounter from a municipal project into an application that helps move local governments into the 21st century.

Around the country, municipalities are strapped with increasingly tightened budgets, diminishing teams and processes that are vestiges of a bygone era. At a time when life moves at the speed of a tweet and we have access to information 24/7, government bureaucracy, with its paper forms, limited hours of operation and one-way conversations, is a dinosaur. This makes starting a small business a confusing, frustrating affair.

“The interface for government is formica, fluorescence and forms,” says Koht, pointing out that government was set up during a time when we were predominantly an agricultural economy. There were some updates made during the industrial revolution, but it has yet to catch up to the information economy.

“Open government”—a catchall phrase that includes government transparency, open data, accessibility and up-to-date interfaces—aims to change this. As part of this growing open government movement, OpenCounter gives users a transparent platform that clearly lays out the details of starting a local business.

It also provides a treasure trove of data to officials. City leaders can see what businesses are opening in what locations, estimated timelines, business sizes and more. The conversion rate for people who open an account versus those who actually submit permits is only 10 percent. But there’s valuable data in the other 90 percent.

For instance, if officials see numerous people try to open a coffee shop in a building or neighborhood where it’s not allowed, they can use that to justify a text amendment to the zoning rules. Or if there are six applications for co-working spaces, they can see that it’s clearly a growth industry.

Koht and Mahoney are intrigued with the idea of allowing officials—whether city managers, economic development directors, or even mayors and electives—to have an idea of what’s going on in the local economy.

“What OpenCounter does,” Koht says, “is show you what’s happening. Even if people don’t submit, you can still pick up the phone and call them and say, ‘I see that you’re looking to do this. Is there anything I can do to help?’ That’s how you build a healthy economy.”

The big-picture vision for OpenCounter is to drive a conversation around helping small businesses get going—and to do it at a fraction of the cost of hiring round-the-clock staff.

“OpenCounter doesn’t replace any human function,” Koht says, “but it increases the amount of citizens that a city talks to, and it allows the conversation with city hall to happen on the entrepreneur’s terms.”

To date, eight cities have signed up with OpenCounter. The smallest is Gonzales, Calif., with a population of 8,600, and the largest is Houston, the fourth largest city in the U.S., with two million people. Koht and Mahoney are also in talks with Los Gatos, Pacific Grove, Seaside and Truckee.

In Santa Cruz, OpenCounter has 500 people registered, and 57 of them have submitted for formal permits. Using feedback from these users, Koht and Mahoney have transformed OpenCounter from a local project into an application with the potential to help entrepreneurs in cities of all sizes.

“Santa Cruz is a great place to incubate a business,” says Koht. “It’s large enough that you can try an idea at scale. It also has a creative spirit that allows you to try new ideas, and those ideas can scale far beyond the borders of the city.”