Author: Nick Bowden

What’s different about GovTech?

San Francisco City Hall

Building and selling products to government is hard. If you’re reading this post, I’ll assume you’ve heard the “if we only fixed procurement…” soundbite.

This post isn’t about fixing procurement, procurement is a symptom.

I’ve spent the last eight years building and selling products to governments. At the risk of oversimplifying what works in govtech, I think success comes from three factors:

  1. Founder-product-market fit
  2. Understanding zero-sum budgets
  3. Scale through social proof

Founder-product-market fit

Every sector requires companies to find product-market fit as quickly as possible. There’s not a better post than this one when it comes to the importance of product-market fit. However, government is different. It’s almost impossible to “eat your own dog food” in govtech. You can’t create a QA environment that replicates the planning and zoning counter. The only way to replicate public safety use cases is to be in the field with the folks doing the work. The inability to use-what-you-build puts enormous pressure on the founder(s) to place themselves in the environment and build a product that works.

Understanding zero-sum budgets

City budgets are a zero-sum game. Allocating dollars to a new product simultaneously forces withdrawal from something else in the budget. Your product has to be so good it entirely replaces another product or a human process. There’s a good chance that product or process you’re replacing has been in use for 25+ years. Products can’t be 10% better in government, they have to be 10x better than the incumbent. This might sound like every other sector, but risk aversion is high in government. In order to replace something in the budget, the bar for product viability isn’t minimally-viable.

Scale through social proof

Concentrated impact, either geographic or within a domain, is a common thread in successful govtech companies. To combat the inability to use your own product (highlighted above), the only way to gain understanding and thus scale is through social proof. Random smile and dial doesn’t work in govtech. People forget that selling software to non-IT departments is a new phenomenon. Most of these folks haven’t been sold software, ever. These are domain experts and only experience value through narratives, stories of similar people finding value. In the case of government, similar people means the city next door or another person that does my exact job. The danger in govtech is trying to get scale through the force of a sales operation long before product-market fit exists.

With all of that said, success in govtech is there for the taking.

Passive intelligence for government

Every government wants to use data to make better decisions.

This desire and need is being supporting both from within government and by a handful of interesting companies like SmartProcure, Mark43 and GovInvest. These companies provide data and platforms that make purchasing, public safety and pension decisions much more informed.

The challenge for both companies and internal tool development is the same: changing user behaviors. Even with the very best products, changing behavior is really fucking hard. Raise your hand if you want another website or app to log into every day? Bueller? Bueller?

From a product perspective the fundamental challenge is straightforward: create enough value for consistent use. However, government presents its own set of unique challenges: Elected officials turn over, political will matters, and legacy vendors have stranglehold contracts.

That being said, there’s a giant opportunity for apps that work while government officials sleep. What that means is technology working behind the scenes to deliver practical and insightful information long before it surfaces through traditional mechanisms. How does this all happen? Passive intelligence and delivery applications. An everyday consumer example of this is the brilliant, slightly creepy, time-to-work notification from Google Maps. As I leave for work and hit the end of my driveway, I’m provided with an estimated time to get to the office.

This is a classic example of low user investment and high user value. The app does the hard work and only notifies you at the exact moment you should care. Consuming the information makes you a maps user, without forcing you to open maps. Wouldn’t you love for your city council member or Mayor to get similar notifications about city operations?

I can think of hundreds of use cases across all of government. From public safety, to infrastructure, to changing demographics. In a world where consumers demand passive intelligence, why aren’t we building for elected officials as if they are also consumers of useful, intelligent data?

It’s entirely possible that there are apps out there that already do what I described. If there are, I would love to learn more. It strikes me as one of the most opportune places for govtech founders to be spending their time.