Getting Started in GovTech
MAKE A DIFFERENCE WHILE BUILDING YOUR BUSINESS
Govtech has amaing potential to change the ability of people across the country (and world) to live thriving, fulfilling lives, but at the same time, it's one of the most challenging markets for innovative startup companies to enter and scale within.
9 LESSONS FOR GOVTECH STARTUPS
Below, you will find some quick tips for founders who are just getting started in the govtech ecosystem, or thinking about starting a govtech company.
READ THE 2022 AWS GOVTECH STARTUP GUIDE
Amazon Web Services (AWS) created the 2022 GovTech Startup Guide for founders, developers, and technology startups serving the government community. Featuring multiple customers and subject matter experts, the guide identifies government technology (GovTech) trends and illustrates key industry insights.
JOIN THE CIVSTART ACCELERATOR
As part of our mission to build an honest and inclusive govtech ecosystem, we're here to help the best startup founders navigate this $3.25 Trillion market.
If you already have a great company and you are ready to scale, apply to our program!
1. The Govtech Market is Massive
There is a tremendous opportunity for civic-minded entrepreneurs to make a difference.
Just considering the state and local US market, there is $3.25 Trillion available for vendors each year.
Whether the biggest cities or smallest county, these are some of the largest and most complex organizations in any locale, with thousands of employees and numerous departments. Each of those departments — as big as the largest B2B customers — has its own technology, logistics, process, outreach, and other needs.
2. Each Gov has Unique Challenges and Context
Govtech is not a uniform market.
While there is tremendous opportunity, customers in the B2G landscape look more unique than in any other sector, making this market more challenging than most.
Working in GovTech requires the patience and adaptability or the right combination of narrowness and price to succeed.
3. Start by Understanding Challenges
Not with your solution
Take a look at existing strategic plan documents, or ask a lot of questions to the right person to get a clear understanding of their challenges. Then make sure your solution is framed within the things that they care about. You are more likely to see how your solution can help them than they will be able to see the applications of your solution to their many problems.
RFPs can be incredibly overspecified and responding to them may not be the best use of a startup's time. By seeding officials with ideas about how your solution can support their clearly named challenges, you create future opportunities when the next RFP gets written.
4. Investors do not always understand the market potential
Be prepared to educate
Despite their reputation, investors can be as risk-averse as government officials.
Be prepared to provide extra information and justification for your product-market fit. Many investors will not be comfortable going outside their expertise into B2G. Find the investors who are interested and make sure they understand the slower sales cycle, but the huge potential across the whole market.
5. Avoid RFPs early on
There are other ways
RFPs are typically written to protect the government by overspecifying a solution. This often has the unfortunate side-effect of excluding new approaches and new technologies.
While understanding the RFP process is critical in the medium and long term, landing those first couple of customers is better done in your company’s hometown, where they have hometown pride and economic development benefits to consider. Also consider: pricing under procurement thresholds (this can be as high as a hundred thousand dollars in the biggest cities); finding or creating pilot/proof of concept opportunities with governments for free or reduced cost (with explicit procurement ambitions on the other end); coming to the government with funding in hand (e.g. grants).
6. Be a Partner, not a Vendor
Governments are looking for long-term, sustainable companies
Governments have a lot of discretion, despite the RFP process. As with anything, relationships are key. Being the person they remember sending them helpful news and information and updates for the past several months can make the difference in getting the contract by getting your foot in the door.
7. Case Studies go a long way
They explain your product and reduce perceived risk
As soon as possible, write a great case study and market it widely. Having a case study can help the government pay attention to your product, see its impact, and also justify a perceived risk internally.
No government official wants to lose their job to save the government a couple of thousand dollars when it turns out the startup couldn't deliver on their promises. Showing impact, as well as cost-savings in a case study, proves you can deliver.
8. Know who the Right People are
It's probably not the mayor
Mayors, councilmembers, and other elected officials can be important to have buy-in and support from, and if you have those connections, make use of them.
But if you are selling a transportation solution, speak to the city, county, or state DOT. Consider that your transportation solution may actually benefit the economic development corporation, office of revenue, procurement office, or the IT department within the specific local government.
Do your research. Governments are complicated, they are unique from each other, and there is no sense in wasting your or their time on the wrong person.
9. Get Help
Govtech is more collaborative than any other market
Founders get into govtech because they care about their community and how local governments are serving their residents. There is an ecosystem of founders, investors, accelerators, and nonprofits looking to support the best and most innovative technology solutions, including us at CivStart.
Be patient and good luck!