Transcript of B2G - How to Scale Your Startup By Selling to Government
B2GHow to Scale Your Startup
By Selling To The GovernmentStonly Baptiste
@StonlyBPartner & Co-Founder at Urban.Us
FEAROFGOVERNMENTit shouldn’t stop you
Why Cities Matter>50% - Population
70% - Carbon
80% - GDP
Buildings Resources
Transport Gov
Cities are people and...
GOVERNMENTIS BEAUTIFUL
5 out of 23 portfolio startups sell to Gov
DINOSAURS
DISRUPTION
MARKET
$8.5B
$7.5B
$25.9B
$10B $7.3B $7.5BSource: e.Republic (2016)
DISTRIBUTION
State
Federal
Military
Int’l
USERS
GOVERNMENT
OFFICIALS
Are People
As a startup, selling to government is complex but not impossible.
Chris Gueits
how about a real-world example of a procurement sales cycle? this could demystify the process further.
Shaun Abrahamson
Agreed. Even breaking out RFP vs other sales options.
Enterprise SaaS
“You typically need 6 to 18 months to close an enterprise deal.” - Steli Efti, Chief Hustler @
Close.io
B2G SaaS (Discretionary)
“Government sales cycles are an average
of 90 days.” - Marc Ende, Dir. of Sales @
SeamlessDocs.com
B2G (Procurement)
12-24 Months
“Selling to government is hard and takes too long” - most people
AlliesCity CouncilMayorsDepartment Heads
BuyersCity AdminsChief Procurement
Users
Request ForProposals
Who’s Buying
FreedomOfInformationAct
Who’s Selling
DiscretionarySpending
Tara Pham
May note that it's sometimes better to get your foot in the door with a smaller project because some gov's will expand project later without requiring additional procurement processes (or solicitations will be written tightly to your spec). i.e., For some, it's a "land grab" strategy
Pilot ProjectsCo-development with a city / Early AdoptersPros: + case studies+ valuable marketing/press, and, most of
all, + word of mouth among city operators
Cons: + high CAC
Tara Pham
I would say this is a pro _and_ con (or general consideration) because often pilots cost more than they make for the company — therefore contributing to a higher cost to acquire the customer than in some other sales cycles; THAT SAID, sometimes there are major secondary (i.e. non-monetary) benefits such as case studies, valuable marketing/press, and, most of all, word of mouth among city operators. **Cities gets pitched stuff all the time, so real recommendations from their peers go a long way in selling to gov officials. This may be truer for gov customers than traditional enterprise because there are fewer options (vendors), and there is a perception that few companies actually build for gov. The perception is often that these companies usually build for the private sector first and then try to translate the solution to gov., which believes itself to be a different beast. Plus, these vendors are often big mega-corps that often sell an over-engineered product (again, built for private sector first). The city decision makers are pretty jaded on them, so peer recs are everything
Chris Gueits
can you reference any startups that successfully launched pilots? did they turn the pilot into a contract? how?
Sole Source ProcurementYou have unique IPPros: + larger value contracts+ removes competition
Cons: + not as easy to get and keep
Sascha Haselmayer
why would it take longer?i would add though, that in Europe, 98% of sole source contracts that were challenged by competitors or the public were found to be in need of re-procuring.Focus can be on unique IP or capability. Most procurement people are very uncomfortable with sole sourcing.
Messages that work+ Save time and money+ Save lives+ Get more budget+ Attract more businesses+ Domain expertise+ Gov / Social background
Tara Pham
Vendor's mission as impact is important messaging for gov. because they have to serve everyone and don't need to profit. Another place where startups, esp. with domain expertise or gov/social background, can out-perform mega-corp's
To B2Gor not...
You can B2G without selling to Gov
+ Sell to citizens+ Sell data+ Sell ads
REMEMBER
REMEMBER
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Stonly Baptiste@StonlyBPartner & Co-Founder at Urban.Us
BONUSThe best B2G Startups have key
qualities
Patience
Getting your first reference cities may take time. Scaling may take longer.
Empathy
They reach out to understand the problems not to sell a solution.
Great Teams
Founders, Investors, Advisors that understand (or want to understand) Government
Great Products
A.I., Mobile, UI/UX - and other unique innovation that they bring to Government