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

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.

PartnershipsSoftware Licensing Program (SLP)

Master Service Agreements

Marketing & Sales+ Events+ Competitions+ Grants+ Freemium / Easy

Onboarding+ Cold Calling

“Your Existing Systems Suck”

and similar messages don’t work for B2G

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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MB

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MB

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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

B2G - How to Scale Your Startup By Selling to Government

Government & Nonprofit

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