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GovTech Summit to Startups: Passion, Retention Are Essential

This week's InState GovTech Summit in Austin featured tech vendors discussing how to crack the growing public-sector market. The founder of PayIt described what’s changing as governments increasingly turn to startups.

Startup staff collaborate
As the government technology space grows, younger companies are figuring out how to break into that market, establish footholds and begin to scale. The insights those firms offer promise to influence how public agencies buy and deploy the latest software and other digital tools.

The inaugural InState GovTech Summit in Austin brought together investors, officials and entrepreneurs for a two-day series of panels and networking events. The event itself reflected the ongoing increase of investment, mergers and acquisitions in the government technology market, driven by pandemic demands and the broader trend toward digital services in virtually all sectors of the U.S. economy.

The event focused heavily on helping entrepreneurs learn to compete with legacy vendors in this space, and to attract investor attention while earning the loyalty of government clients.

One of the startups with a prominent role at the conference was Kansas City-based PayIt, which sells digital payment and other services to governments, and which recently expanded into Canada.

During a “fireside chat” that featured some of the main takeaways of the conference, CEO and founder John Thomson told attendees why now is a golden time to be in business with state and local government.

“The market is going through a big change, crossing that chasm into the cloud and into software as a service in a big way,” he told his panel partner, Kim Majerus, leader of U.S education, state and local government for Amazon Web Services, which works with PayIt and has captured a sizable chunk of the public-sector market for cloud technology.

Thomson acknowledged that younger firms such as PayIt represent a gamble for many government customers, echoing one of the major themes of the conference.

“No CIO is going to get fired for hiring IBM,” Thomson said. “But they will get fired for hiring a startup.”

But as Thomson told it, the advantage that younger companies have over longtime players in the government space involves passion and hiring. He said he wanted to build PayIt in part so that busy or low-income citizens wouldn't have to waste time standing in lines in government buildings to pay tickets or access services. He also talked about meeting with governors and other state officials, not only to tout the benefits of the digital services PayIt could offer, but to learn more about what those agencies really needed and what they could prioritize.

“I’m a true believer,” Thomson said.

Passion only gets a younger company so far in the gov tech space, however, going by Thomson's advice for other company founders.

“The most important thing you can do is crush the first thing you do,” he said.

Like other speakers at the summit in Austin this week, Thomson addressed the challenges and rewards of hiring top talent. He said PayIt tends to hire a good number of “younger people,” as well as workers who come from other industries. Again, the thread connecting them all is passion.

“They want a chance to change the world and do something meaningful,” he told Majerus. “I can hire people who would never think of going to work for the government, who don’t want to work on a mainframe, who want to be part of a dynamic culture and have creativity and the freedom to make mistakes.”
Thad Rueter writes about the business of government technology. He covered local and state governments for newspapers in the Chicago area and Florida, as well as e-commerce, digital payments and related topics for various publications. He lives in Wisconsin.