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3 Pieces of Advice for Setting Up a Successful Gov Tech Company

At TiECon 2017 in Santa Clara, Calif., some gov tech leaders parceled out advice on how to successfully sell to the public sector.

SANTA CLARA, Calif. — There aren’t a lot of people in the world who are accustomed to building and implementing technology for the government.

But on May 5, a group of people who do have experience in that area gathered in Santa Clara, Calif., at TiECon 2017 to talk about what it takes to sell technology to the public sector. The people involved ranged from investors to public IT officials, but they agreed on several pieces of advice for companies trying to break into gov tech.

1. Solve the right problems

Ron Bouganim, founder and managing partner of the Govtech Fund, is not just looking for any company to include in his portfolio. The fund is early-stage and emphasizes high-growth startups that have already signed multiple clients.

Still, one of Bouganim’s main criteria for evaluating potential investments hits at advice others echoed at the conference for companies that want to work with government: Look for smoke.

“They have to have built a product that solves an absolute hair-on-fire, burning pain point,” Bouganim said.

In some ways, government is a natural fit for that mentality. The public sector’s long-standing norms for buying technology have left many agencies operating on old systems that hamper employees’ ability to work quickly and thoroughly. Under the right circumstances, that can lead to some crispy scalps.

Many successful gov tech companies have found ways to help government work better under those conditions — SeamlessDocs takes paper forms and creates digital versions citizens can fill out and sign without coming into an office. NIC offers government ways to accept payments from citizens and businesses online. ClearGov digs up open data and builds portals for small government entities that might not otherwise have the time or resources to do so.

But solving the right problem isn’t just about searching for urgent needs, according to Illinois CIO Hardik Bhatt. Gov tech companies also need to search for problems that affect citizens, as opposed to agencies.

Agencies and departments have their fair share of problems to solve. But ultimately, Bhatt said, their mission is to serve constituents. And to a constituent, it doesn’t matter which particular acronym is solving their problem.

“You have a tendency of thinking that I’m doing something … extremely different for my agency compared with another agency, but at the end of the day we forget that we are all providing solutions to that one citizen that’s going to multiple agencies,” Bhatt said. “So if your solution is geared toward solving the citizen’s problem, I think that would appeal to us very quickly compared with solving an agency problem.”

2. Start small

While searching for critical problems, speakers at the conference also recommended beginning with narrower solutions. A lot of startups begin with big ambitions, but when it comes to government, Viscount Systems Chief Executive Officer Scott Sieracki said, it’s often better to start small.

“Sometimes when you’re not that big a company, you’re not that overly resourced and capitalized a company, you need to step back a little bit and find another way to get started,” Sieracki said. “It doesn’t mean you can’t ultimately participate in that grandiose rocket ship opportunity. But if you take a practical approach and you find a piece of that business, that gives you initial momentum. It’s a starting point, and typically that momentum will carry you into a much larger opportunity and a much larger ecosystem.”

That’s at odds with the traditional way government has approached technology — putting out multi-year requests for proposals encompassing huge systems and all but eliminating smaller companies from the competition — but many at the conference said government is beginning to change its approach. At the federal, state and local levels, government officials are beginning to work in more agile ways that allow for smaller, more iterative projects and short development sprints.

Many are also beginning to use pilot projects — some paid, some not — as ways to get a foot in the door. John Bergin, the business technology officer for the U.S. Department of Defense’s CIO, said he often prefers the pilot approach because it gives him a concrete demonstration that a product or service can make an impact.

“If you come to the door and say, ‘John, I can change your firewall rule settings and reduce the amount of labor you’re doing to manage your firewall rule setting this many per firewall,’ why go back and do the math and say, ‘Wow there’s a return on investment in let’s call it two months?’ That’s worth a pilot,” Bergin said. “I can get that done, we can get that done, but you have to come with numbers.”

Those numbers are especially important in the public sector because it shows government officials concrete evidence that what they’re buying will work, according to Andrew McMahon, director of strategic partnerships for the tech accelerator Dcode42.

“Jot down that successful moment when the agency showed dollar savings or outcomes and show that time and again because that really resonates with buyers in the government space,” he said.

3. Talk to the right people

It’s also vital, Bhatt said, to find the right people to talk to when building something for government to use.

“When you’re talking with the government, make sure that you’re talking to the right person in the government that has decision-making authority and the money associated with that,” Bhatt said.

That’s somewhat vague advice, but there’s a reason for that. At the state and local levels, there can be quite a bit of variance in which people have authority over what. In some places, for example, the chief information officer has procurement power. In others, only dedicated procurement officials can handle the buying.

In particular, Bhatt recommended looking for people who can say whether there would be funding available for the government to buy a solution. It’s entirely possible, he said, for a startup to work for a year building a product, only to find out that the government has no money to purchase it.

Ann Dunkin, Santa Clara County’s chief information officer, had some more specific advice. She said vendors should work with people on technical teams. Those people, she said, tend to influence what kinds of vendors a government searches for.

“Everybody wants to talk to the CIO. But let me explain to you that in the federal government, the state government, the local government, CIOs are not decision-makers in the same way as they are in the private sector,” Dunkin said. “I’m not saying I don’t make decisions, but I very rarely get to decide which vendor we go with.”

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.