10 ms·

Govtech: The $400B Market Hiding in Plain Sight

162 points by RonnieB 11y ago

joshmn 11y ago
For anyone who has experience in selling to Govs (successfully or not), I'd love to hear about it.
- RonnieB 11y ago
  Our 7 startups here at the Govtech Fund (@GovtechFund) have an average sales cycle of 86 days to 12K gov't agencies this past year.
  - josemando 11y ago
    Ron, do you invest in companies outside U.S.? I founded a govtech company in Brazil, we have over 100 gov clients and we would love to talk to you!
    - RonnieB 11y ago
      I wish we could! Unfortunately Govtech Fund I is focused exclusively on US-based startups. This is purely a function of scale today -- as a $23M Seed/Series A fund, we just can't spread ourselves too thinly. But there WILL be a Govtech Fund II, III, IV, etc. down the road and I'd love for Brazil will be top of the list! In any case, if you find yourself in the Bay Area, please drop us a line -- happy to grab coffee. In the interim, if we can ever be helpful, don't hesitate to ping! @GovtechFund on Twitter always a good way to reach us.
      - josemando 11y ago
        Great! Thanks for the response :) We go to NY and Bay Area every 4-5 months to stay in touch with investors and potential partners. I just ping you guys at Twitter so we meet for coffee next time. Cheers ;)
        RonnieB 11y ago
        Great!
- godzillabrennus 11y ago
  Sure, email me hn at strapr dot com if you want to chat.
- USNetizen 11y ago
  About 70% of our revenue comes from the federal government, including cleared work. We specialize in this space and have customers across a half-dozen or more agencies. The sales cycles can still be pretty long, but mostly for IDIQ's with $30M+ ceilings. We've received small $500k contracts that took over 9 months to award and, on the other hand, $3M+ contracts that took just a month. A lot depends on the department/agency, and even organizations within the department/agency. It varies so widely but the key is getting to know your customer and anticipating the cycle. Relationships are absolutely crucial to getting government sales - the boilerplate they put out as RFP's hardly ever tell the full story of what the customer needs. Also, leverage your set-asides and find reputable partners to team with. Can't stress this enough - it's the only way to compete against the behemoths in the market who have far more name recognition amongst contracting officers (who can be extremely risk averse). If the government isn't your target market, you can start winning work as a subcontractor and working your way up the ladder, getting to know your program manager customers who make the purchase decisions. Two books I recommend as well - http://www.apress.com/9781430244974 http://www.apress.com/9781430244974 and http://www.amazon.com/Zero-Billion-Entrepreneurs-Government-Contracting/dp/1940013046 http://www.amazon.com/Zero-Billion-Entrepreneurs-Government-...
  - hudibras 11y ago
    >Also, leverage your set-asides and find reputable partners to team with. This is something that I've always wondered about. Contracting officers and large contractors are desperate to team up with start-ups (otherwise known outside Silicon Valley as "small businesses") so why don't more start-ups use government contracts as a no-strings-attached method of raising cash or bootstrapping? Maybe it just doesn't sound cool or sexy to say that you're basically working for Uncle Sugar...
    - USNetizen 11y ago
      I think too few of them realize how powerful (yet easy) SBIR and CRADA programs are - free funding to develop a product, courtesy of DoD, HHS, etc. Up to $750k per year. I know entire $50M+ companies that specialize in SBIR R&D alone even, then license their product patents. Heck, Oracle started out as a DBMS for the CIA. Almost all of the founding semiconductor companies of Silicon Valley were funded in large part by defense work (missile guidance). People forget this, but I think the realization of its potential coming back around. (https://www.sbir.gov/about/about-sbir https://www.sbir.gov/about/about-sbir) What's cooler than developing products used instantly by up to millions of customers all at once? Once you overcome the stereotypes of working with the government, you realize how truly amazing and transformative it can be if you do it right.
- dkyc 11y ago
  Check out this awesome interview with Marc Ende of SeamlessGov ( http://www.seamlessgov.com http://www.seamlessgov.com ) that was released just last month: http://blog.close.io/how-to-sell-to-governments http://blog.close.io/how-to-sell-to-governments Specifically about B2G sales.
  - RonnieB 11y ago
    +1 to that. Marc and the entire team at SeamlessDocs are killing it. We're so proud to be investors there -- amazing company with tremendous impact. What more can we ask for?
  - raminassemi 11y ago
    Thanks for sharing!
daodedickinson 11y ago
Crazy the deals FAST Enterprises has landed. I definitely expect to see more competition there.
godzillabrennus 11y ago
I'm helping out a govtech startup founded by my father. It's crazy how few funds are out there for this. Also, kudos to Civis Analytics for growing beyond govtech.
- selimthegrim 11y ago
  What is Civis doing now beyond govtech?
jlas 11y ago
So who'll be the next GovWorks? https://en.wikipedia.org/wiki/GovWorks https://en.wikipedia.org/wiki/GovWorks
- USNetizen 11y ago
  GovWorks was focused on only a small subset of the government market and rode the dot-com boom. I've personally known companies grow from $1M in revenue to over $100M in revenue in a span of only 5 or 6 years in the government space, even in a lousy economy. It's the hype of Silicon Valley that you have to avoid. Government, especially Federal, is a market that is driven by different principles than most others out there, which many startups don't understand before they try to enter it. So they expect immediate returns and just give up. It doesn't work like that.
  - infinite8s 11y ago
    Do you have to be based in DC for that?
ilamont 11y ago
While there may be an attractive market, selling to the government is a byzantine, frustrating process that puts startups and small businesses without in-house contracting expertise at a disadvantage. Before you commit to anything, study the processes that govern this space. There are lots of requirements for getting into the system — my company (not a tech startup, FWIW) needed to register for SAM (“The System for Award Management is the Official U.S. Government system that consolidated the capabilities of CCR/FedReg, ORCA, and EPLS”), Fedbizopps, GSA Vendor Support Center (VSC), ACES (the private company which issues a digital certificate), Duns & Bradstreet, etc. Then I had to bone up on general contracting requirements and pass some tests before I could bid … and then discovered individual solicitations have their own requirements, pricing restrictions, vetting processes, and sometimes huge delays (for one that I was interested in, the solicitation said “it may take up to 12 months or longer before an offer is evaluated.”) (1) I am assuming that the Govtech fund has in-house expertise that can help smooth the way for new companies, but there will almost certainly be complicated processes, time-consuming bureaucratic requirements, and huge delays that cannot be circumvented. My advice would be to ask hard questions about these issues before going down this path. 1. http://in30minutes.com/selling-to-the-federal-governmentgsa-a-bureaucratic-nightmare-for-small-businesses/ http://in30minutes.com/selling-to-the-federal-governmentgsa-...
- USNetizen 11y ago
  It's not that hard once you get used to it, and your industry seems to be an exception to the case as what you experienced is not typical in IT. The upside far outweighs the bureaucracy when you land your first $1M+ contract (or you could just subcontract and avoid the bureaucracy altogether). It is, however, a market that requires a lot more commitment than most startups are accustomed to, which is why they try to enter and then give up shortly thereafter. It requires a lot of relationship-building, learning, and such. I've noticed, however, that military veterans tend to be very successful in this space because they are accustomed to the jargon, the processes and the requirements. Like I said, it's a learning curve, but one that pays huge dividends if you stick with it. Plus, your local SBA office has a special government-procurement officer in there who will actually sit with you and go over things one-by-one, so no need to ever go it alone if you get lost. They offer free training courses as well in government procurement. The resources exist, but too few people are using them.
spangry 11y ago
And this figure only covers government IT procurement... When you look at how government has traditionally interacted with citizens, it's indistinguishable from a monopoly service market. In the past, this was the only feasible way to deliver many government services. However, the result is the same as any other market monopoly: inefficient production and above welfare maximising pricing (albeit indirectly paid via taxation). Government Web APIs fundamentally change this, and I'm not just talking about 'open data'. A whole bunch of monopoly markets suddenly become highly competitive markets (especially since digital service production tends to occur at around 0 marginal cost). The value to the economy could be many times the figure discussed in the OPs article. Tim O'Reilly was so far ahead of the times when he published his chapter on 'Government as a Platform' in 2010 (http://chimera.labs.oreilly.com/books/1234000000774/ch02.html http://chimera.labs.oreilly.com/books/1234000000774/ch02.htm...) More recently, in Australia they've just set up their own (kinda crappier) version of the UK GDS and published an API design guide. I think the excerpt from this article basically sums it up (http://www.themandarin.com.au/48771-dto-make-creating-apis-mandatory-federal-agencies/?pgnc=1 http://www.themandarin.com.au/48771-dto-make-creating-apis-m...): "However despite all these challenges, the cause [government APIs] is a great one and could do more to transform how government IT operates than many more public steps. If the DTO [Australian GDS] can pull this off, have agencies fall in line and have APIs start rolling off government IT ‘production lines’, it will have single-handedly justified its own existence and transformed how government works, even if it doesn’t achieve anything else in the next few years."
wmeredith 11y ago
It's not hiding. It's a cesspool of bureaucracy and nepotism that almost by design weeds out those with the disposition for creating good software.
- USNetizen 11y ago
  What have you done to try and fix it? Looking in from the outside you can speculate all you want, but maybe do something to work your way inside and see what it is really all about. There you'll see things can change, but you have to be willing to put in the effort, but too few are unfortunately.
  - avs733 11y ago
    the deeper I get in this thread the more I like you. I used to do contract work for a number of small businesses (call them startups if you like...at least one fits the term) that sold to FedGov, specifically DOD. They had many of the same complaints I see here, what I saw was a mismatch of priorities and expectations that gets lost in a see of translation problems...especially when you involve the USMC. The process is often the way it is for very good reasons. However, the reasons may not be apparent or operate on the same paradigm as those in the startups world are used to. As with any subcommunity within culture there is a lingo and a language and a way of doing things. The folks in here have their own (I mean we are on a website hosted by a business incubator named after a math operation). What I feel like is going on in this discussion thread is a classic case of 'I don't understand it so it is bad'. It looks very poorly on the startup community, and reinforces stereotypes about us as a group. Reframe the paradigm of FedGov not as focused on efficiency but instead on processes and procedures in the name of fairness and the whole thing starts to make more sense. I do acknowledge that fairness in this case being an often abstractly applied and defined process.
devonkim 11y ago
Veterans will dominate in a lot of these contract bids because they have veterans preferences and many get disability points on their contracts, too. The federal employment system heavily favors veterans and oftentimes lowers standards of employment just to bring in more veterans into companies. Then add in that companies can be essentially paid extra for hiring a veteran on certain contracts and you are left with a heavy bias for employees and leadership whose primary experience in organizations is the old school, rigidly hierarchical military. Trying to work with some of these guys in a start-up setting outside DoD space is no more frustrating than trying to work with a corporate developer that's never had any job besides at IBM their whole lives. It doesn't mean they're bad or unintelligent, but the rigor and emphasis upon certain organizational structures and workflow processes are just plain useless knowledge in a start-up focused upon execution. There's a lot of cultural horrors that will keep out motivated, smart folks from working with the government. I've spent well over 10 years of my life hoping to be the change that I was recruited for, but it's just not enough to be smart and motivated as much as well connected to incumbents that are fighting very hard against change because their very expensive meals and Mercedes S500s depend upon keeping things as stable as possible. This is the precise opposite mentality of the technology giants in industry.
- USNetizen 11y ago
  Firstly, your perception of veterans is woefully wrong and misplaced. Veterans set-asides in contracting actually do very little to help a company as there is still much legwork to be done. Even then, you stereotype veterans as "rigid" which is simply not at all true. I see envy in your post, not facts. Companies are NOT AT ALL "paid more" for having veterans on contracts. Labor rates are the same regardless of the status of the employee. You're facilitating the spread of rumors, stereotypes and hearsay which is why people think badly of this market. Veterans are given preference for hiring, yes, because they have a skillset that too few private sector employers realize unfortunately. There are studies to prove that point. Secondly, "focusing on execution" and not processes is why so many startups die in a growth stage because it too often means chasing revenue only with few long-term plans. The government is inherently a long-term market. You need to have a long-term view. True, if you're developing a dog-walking app or glorified to-do list, yeah, it's not a market for you. But if you really want to do something game-changing and want to build something of note, I see no better place for it. Look at Palantir for example. There are hundreds of other examples. Lastly, you can't just sit around waiting for "change", you have to make it happen. I used to be a GS-13 employee, fairly high up at one of these agencies, and I voluntarily left a secure job to make more of a change and I see it happening. It's rewarding, but you have to push for it and take risks or else nothing will ever come of it. I speak from experience actually doing this. How many else here can?
hackaflocka 11y ago
I want to build "organizational operating systems" for govts. (incorporating "best practices") using FLOSS ERP software (I've done e-Government research in academia, and I can also code). People who have experience in this space: is there a market for such a thing or do govts. prefer commercial (i.e. non FLOSS) software systems?
jaybna 11y ago
There is a reason most banks exclude government receivables from line of credit borrowing bases. It is a legitimate market, but it is hiding in red tape and not plain sight.
- USNetizen 11y ago
  That's not true at all and simply more hearsay and rumor. Banks see government receivables as reliably as if you invested in treasury bonds with cash assets. It's the only customer in the world that is 100% guaranteed to pay, on time, as long as you perform to standard. You're speaking to the wrong people if someone told you that. I'm speaking, however, from experience.
niels_olson 11y ago
I'm on a DoD network and this site is blocked. I'm not sure whom I should be more skeptical of, Ron Bouganim or my network operator.
deleted 11y ago
[deleted]
Spooky23 11y ago
It's a tough market for a startup. I've worked for state .gov, and probably oversaw about $20M-50M in purchases annually. Some downsides: -Our procurement cycles are very long, sometimes as long as a year. -Procurement contract vehicles are a horror show. The contract terms and conditions are often not negotiable, and may impact your ability to get credit, etc. -You may find difficult to deal with services terms imposed by some procurement regime. -If you don't have a field sales force, you'll probably need lobbyists to get meetings. -You'll need to deal with all manner of crazy compliance regimes. HIPPA, FERPA, IRS 1075, CJIS, etc. Plus local policy. -If you "partner" with the IBM/Unisys/Dell/EMCs of the world, you may find yourself screwed holding recievables for the big vendor, used as a straw man by the vendor sales team, forced to use high cost/low quality consultants from the big vendor, or otherwise messed with. On the upside, .gov is usually terrible at negotiations, and they look at spending differently than commercial customers. You can make a fortune selling stuff, but you're not going to do it with traditional SaaS business models. You need to invest substantial time, energy and dollars into the pre-sales process.
tdaltonc 11y ago
This is the epitome of an industry where people with good ideas could benefit from being paired with insider advisors.

162 points by RonnieB 11y ago

joshmn 11y ago

For anyone who has experience in selling to Govs (successfully or not), I'd love to hear about it.

RonnieB 11y ago
Our 7 startups here at the Govtech Fund (@GovtechFund) have an average sales cycle of 86 days to 12K gov't agencies this past year.
- josemando 11y ago
  Ron, do you invest in companies outside U.S.? I founded a govtech company in Brazil, we have over 100 gov clients and we would love to talk to you!
  - RonnieB 11y ago
    I wish we could! Unfortunately Govtech Fund I is focused exclusively on US-based startups. This is purely a function of scale today -- as a $23M Seed/Series A fund, we just can't spread ourselves too thinly. But there WILL be a Govtech Fund II, III, IV, etc. down the road and I'd love for Brazil will be top of the list! In any case, if you find yourself in the Bay Area, please drop us a line -- happy to grab coffee. In the interim, if we can ever be helpful, don't hesitate to ping! @GovtechFund on Twitter always a good way to reach us.
    - josemando 11y ago
      Great! Thanks for the response :) We go to NY and Bay Area every 4-5 months to stay in touch with investors and potential partners. I just ping you guys at Twitter so we meet for coffee next time. Cheers ;)
      - RonnieB 11y ago
        Great!
godzillabrennus 11y ago
Sure, email me hn at strapr dot com if you want to chat.
USNetizen 11y ago
About 70% of our revenue comes from the federal government, including cleared work. We specialize in this space and have customers across a half-dozen or more agencies. The sales cycles can still be pretty long, but mostly for IDIQ's with $30M+ ceilings. We've received small $500k contracts that took over 9 months to award and, on the other hand, $3M+ contracts that took just a month. A lot depends on the department/agency, and even organizations within the department/agency. It varies so widely but the key is getting to know your customer and anticipating the cycle. Relationships are absolutely crucial to getting government sales - the boilerplate they put out as RFP's hardly ever tell the full story of what the customer needs. Also, leverage your set-asides and find reputable partners to team with. Can't stress this enough - it's the only way to compete against the behemoths in the market who have far more name recognition amongst contracting officers (who can be extremely risk averse). If the government isn't your target market, you can start winning work as a subcontractor and working your way up the ladder, getting to know your program manager customers who make the purchase decisions. Two books I recommend as well - http://www.apress.com/9781430244974 http://www.apress.com/9781430244974 and http://www.amazon.com/Zero-Billion-Entrepreneurs-Government-Contracting/dp/1940013046 http://www.amazon.com/Zero-Billion-Entrepreneurs-Government-...
- hudibras 11y ago
  >Also, leverage your set-asides and find reputable partners to team with. This is something that I've always wondered about. Contracting officers and large contractors are desperate to team up with start-ups (otherwise known outside Silicon Valley as "small businesses") so why don't more start-ups use government contracts as a no-strings-attached method of raising cash or bootstrapping? Maybe it just doesn't sound cool or sexy to say that you're basically working for Uncle Sugar...
  - USNetizen 11y ago
    I think too few of them realize how powerful (yet easy) SBIR and CRADA programs are - free funding to develop a product, courtesy of DoD, HHS, etc. Up to $750k per year. I know entire $50M+ companies that specialize in SBIR R&D alone even, then license their product patents. Heck, Oracle started out as a DBMS for the CIA. Almost all of the founding semiconductor companies of Silicon Valley were funded in large part by defense work (missile guidance). People forget this, but I think the realization of its potential coming back around. (https://www.sbir.gov/about/about-sbir https://www.sbir.gov/about/about-sbir) What's cooler than developing products used instantly by up to millions of customers all at once? Once you overcome the stereotypes of working with the government, you realize how truly amazing and transformative it can be if you do it right.
dkyc 11y ago
Check out this awesome interview with Marc Ende of SeamlessGov ( http://www.seamlessgov.com http://www.seamlessgov.com ) that was released just last month: http://blog.close.io/how-to-sell-to-governments http://blog.close.io/how-to-sell-to-governments Specifically about B2G sales.
- RonnieB 11y ago
  +1 to that. Marc and the entire team at SeamlessDocs are killing it. We're so proud to be investors there -- amazing company with tremendous impact. What more can we ask for?
- raminassemi 11y ago
  Thanks for sharing!

daodedickinson 11y ago

Crazy the deals FAST Enterprises has landed. I definitely expect to see more competition there.

godzillabrennus 11y ago

I'm helping out a govtech startup founded by my father. It's crazy how few funds are out there for this. Also, kudos to Civis Analytics for growing beyond govtech.

selimthegrim 11y ago
What is Civis doing now beyond govtech?

jlas 11y ago

So who'll be the next GovWorks? https://en.wikipedia.org/wiki/GovWorks https://en.wikipedia.org/wiki/GovWorks

USNetizen 11y ago
GovWorks was focused on only a small subset of the government market and rode the dot-com boom. I've personally known companies grow from $1M in revenue to over $100M in revenue in a span of only 5 or 6 years in the government space, even in a lousy economy. It's the hype of Silicon Valley that you have to avoid. Government, especially Federal, is a market that is driven by different principles than most others out there, which many startups don't understand before they try to enter it. So they expect immediate returns and just give up. It doesn't work like that.
- infinite8s 11y ago
  Do you have to be based in DC for that?

ilamont 11y ago

While there may be an attractive market, selling to the government is a byzantine, frustrating process that puts startups and small businesses without in-house contracting expertise at a disadvantage. Before you commit to anything, study the processes that govern this space. There are lots of requirements for getting into the system — my company (not a tech startup, FWIW) needed to register for SAM (“The System for Award Management is the Official U.S. Government system that consolidated the capabilities of CCR/FedReg, ORCA, and EPLS”), Fedbizopps, GSA Vendor Support Center (VSC), ACES (the private company which issues a digital certificate), Duns & Bradstreet, etc. Then I had to bone up on general contracting requirements and pass some tests before I could bid … and then discovered individual solicitations have their own requirements, pricing restrictions, vetting processes, and sometimes huge delays (for one that I was interested in, the solicitation said “it may take up to 12 months or longer before an offer is evaluated.”) (1) I am assuming that the Govtech fund has in-house expertise that can help smooth the way for new companies, but there will almost certainly be complicated processes, time-consuming bureaucratic requirements, and huge delays that cannot be circumvented. My advice would be to ask hard questions about these issues before going down this path. 1. http://in30minutes.com/selling-to-the-federal-governmentgsa-a-bureaucratic-nightmare-for-small-businesses/ http://in30minutes.com/selling-to-the-federal-governmentgsa-...

USNetizen 11y ago
It's not that hard once you get used to it, and your industry seems to be an exception to the case as what you experienced is not typical in IT. The upside far outweighs the bureaucracy when you land your first $1M+ contract (or you could just subcontract and avoid the bureaucracy altogether). It is, however, a market that requires a lot more commitment than most startups are accustomed to, which is why they try to enter and then give up shortly thereafter. It requires a lot of relationship-building, learning, and such. I've noticed, however, that military veterans tend to be very successful in this space because they are accustomed to the jargon, the processes and the requirements. Like I said, it's a learning curve, but one that pays huge dividends if you stick with it. Plus, your local SBA office has a special government-procurement officer in there who will actually sit with you and go over things one-by-one, so no need to ever go it alone if you get lost. They offer free training courses as well in government procurement. The resources exist, but too few people are using them.

spangry 11y ago

And this figure only covers government IT procurement... When you look at how government has traditionally interacted with citizens, it's indistinguishable from a monopoly service market. In the past, this was the only feasible way to deliver many government services. However, the result is the same as any other market monopoly: inefficient production and above welfare maximising pricing (albeit indirectly paid via taxation). Government Web APIs fundamentally change this, and I'm not just talking about 'open data'. A whole bunch of monopoly markets suddenly become highly competitive markets (especially since digital service production tends to occur at around 0 marginal cost). The value to the economy could be many times the figure discussed in the OPs article. Tim O'Reilly was so far ahead of the times when he published his chapter on 'Government as a Platform' in 2010 (http://chimera.labs.oreilly.com/books/1234000000774/ch02.html http://chimera.labs.oreilly.com/books/1234000000774/ch02.htm...) More recently, in Australia they've just set up their own (kinda crappier) version of the UK GDS and published an API design guide. I think the excerpt from this article basically sums it up (http://www.themandarin.com.au/48771-dto-make-creating-apis-mandatory-federal-agencies/?pgnc=1 http://www.themandarin.com.au/48771-dto-make-creating-apis-m...): "However despite all these challenges, the cause [government APIs] is a great one and could do more to transform how government IT operates than many more public steps. If the DTO [Australian GDS] can pull this off, have agencies fall in line and have APIs start rolling off government IT ‘production lines’, it will have single-handedly justified its own existence and transformed how government works, even if it doesn’t achieve anything else in the next few years."

wmeredith 11y ago

It's not hiding. It's a cesspool of bureaucracy and nepotism that almost by design weeds out those with the disposition for creating good software.

USNetizen 11y ago
What have you done to try and fix it? Looking in from the outside you can speculate all you want, but maybe do something to work your way inside and see what it is really all about. There you'll see things can change, but you have to be willing to put in the effort, but too few are unfortunately.
- avs733 11y ago
  the deeper I get in this thread the more I like you. I used to do contract work for a number of small businesses (call them startups if you like...at least one fits the term) that sold to FedGov, specifically DOD. They had many of the same complaints I see here, what I saw was a mismatch of priorities and expectations that gets lost in a see of translation problems...especially when you involve the USMC. The process is often the way it is for very good reasons. However, the reasons may not be apparent or operate on the same paradigm as those in the startups world are used to. As with any subcommunity within culture there is a lingo and a language and a way of doing things. The folks in here have their own (I mean we are on a website hosted by a business incubator named after a math operation). What I feel like is going on in this discussion thread is a classic case of 'I don't understand it so it is bad'. It looks very poorly on the startup community, and reinforces stereotypes about us as a group. Reframe the paradigm of FedGov not as focused on efficiency but instead on processes and procedures in the name of fairness and the whole thing starts to make more sense. I do acknowledge that fairness in this case being an often abstractly applied and defined process.

devonkim 11y ago

Veterans will dominate in a lot of these contract bids because they have veterans preferences and many get disability points on their contracts, too. The federal employment system heavily favors veterans and oftentimes lowers standards of employment just to bring in more veterans into companies. Then add in that companies can be essentially paid extra for hiring a veteran on certain contracts and you are left with a heavy bias for employees and leadership whose primary experience in organizations is the old school, rigidly hierarchical military. Trying to work with some of these guys in a start-up setting outside DoD space is no more frustrating than trying to work with a corporate developer that's never had any job besides at IBM their whole lives. It doesn't mean they're bad or unintelligent, but the rigor and emphasis upon certain organizational structures and workflow processes are just plain useless knowledge in a start-up focused upon execution. There's a lot of cultural horrors that will keep out motivated, smart folks from working with the government. I've spent well over 10 years of my life hoping to be the change that I was recruited for, but it's just not enough to be smart and motivated as much as well connected to incumbents that are fighting very hard against change because their very expensive meals and Mercedes S500s depend upon keeping things as stable as possible. This is the precise opposite mentality of the technology giants in industry.

USNetizen 11y ago
Firstly, your perception of veterans is woefully wrong and misplaced. Veterans set-asides in contracting actually do very little to help a company as there is still much legwork to be done. Even then, you stereotype veterans as "rigid" which is simply not at all true. I see envy in your post, not facts. Companies are NOT AT ALL "paid more" for having veterans on contracts. Labor rates are the same regardless of the status of the employee. You're facilitating the spread of rumors, stereotypes and hearsay which is why people think badly of this market. Veterans are given preference for hiring, yes, because they have a skillset that too few private sector employers realize unfortunately. There are studies to prove that point. Secondly, "focusing on execution" and not processes is why so many startups die in a growth stage because it too often means chasing revenue only with few long-term plans. The government is inherently a long-term market. You need to have a long-term view. True, if you're developing a dog-walking app or glorified to-do list, yeah, it's not a market for you. But if you really want to do something game-changing and want to build something of note, I see no better place for it. Look at Palantir for example. There are hundreds of other examples. Lastly, you can't just sit around waiting for "change", you have to make it happen. I used to be a GS-13 employee, fairly high up at one of these agencies, and I voluntarily left a secure job to make more of a change and I see it happening. It's rewarding, but you have to push for it and take risks or else nothing will ever come of it. I speak from experience actually doing this. How many else here can?

hackaflocka 11y ago

I want to build "organizational operating systems" for govts. (incorporating "best practices") using FLOSS ERP software (I've done e-Government research in academia, and I can also code). People who have experience in this space: is there a market for such a thing or do govts. prefer commercial (i.e. non FLOSS) software systems?

jaybna 11y ago

There is a reason most banks exclude government receivables from line of credit borrowing bases. It is a legitimate market, but it is hiding in red tape and not plain sight.

USNetizen 11y ago
That's not true at all and simply more hearsay and rumor. Banks see government receivables as reliably as if you invested in treasury bonds with cash assets. It's the only customer in the world that is 100% guaranteed to pay, on time, as long as you perform to standard. You're speaking to the wrong people if someone told you that. I'm speaking, however, from experience.

niels_olson 11y ago

I'm on a DoD network and this site is blocked. I'm not sure whom I should be more skeptical of, Ron Bouganim or my network operator.

deleted 11y ago

[deleted]

Spooky23 11y ago

It's a tough market for a startup. I've worked for state .gov, and probably oversaw about $20M-50M in purchases annually. Some downsides: -Our procurement cycles are very long, sometimes as long as a year. -Procurement contract vehicles are a horror show. The contract terms and conditions are often not negotiable, and may impact your ability to get credit, etc. -You may find difficult to deal with services terms imposed by some procurement regime. -If you don't have a field sales force, you'll probably need lobbyists to get meetings. -You'll need to deal with all manner of crazy compliance regimes. HIPPA, FERPA, IRS 1075, CJIS, etc. Plus local policy. -If you "partner" with the IBM/Unisys/Dell/EMCs of the world, you may find yourself screwed holding recievables for the big vendor, used as a straw man by the vendor sales team, forced to use high cost/low quality consultants from the big vendor, or otherwise messed with. On the upside, .gov is usually terrible at negotiations, and they look at spending differently than commercial customers. You can make a fortune selling stuff, but you're not going to do it with traditional SaaS business models. You need to invest substantial time, energy and dollars into the pre-sales process.

tdaltonc 11y ago

This is the epitome of an industry where people with good ideas could benefit from being paired with insider advisors.