Startup companies of all types are hot topics today. They excite investors because some offer great revenue potential. The media loves to write about them and economic development organizations try to attract them because of the jobs they create. Small businesses are the backbone of the nation and an essential part of every regional economy. And yet, in spite of all this, small emerging firms are largely left out of government contracting. That may be about to change.
That disconnect in past years was understandable. Selling to the government is a slow process in the beginning. While public officials hand out contracts of every size and type, public-sector contracts take longer to close and there are bureaucratic steps that require patience and attention to detail. Deals are cut and business is won much quicker in the private sector.
Neither investors nor entrepreneurs like long sales cycles. They dislike bureaucratic processes even more, so the government marketplace has never been an attractive option for startup firms. Yet, small, emerging firms have much to offer government. First of all, they have the flexibility and the capabilities to meet the needs of public officials. Occasionally, small startup firms are perfect to fill the contracting gaps left by large companies, they are flexible enough to move quickly and sometimes their work is less costly.
A number of cities have launched initiatives that are just a little shocking. They are finding ways to support startup businesses and allow them to work alongside public officials to resolve problems. A few cities have created what they are calling a residency program. Others are working with small, emerging firms through an innovation office and a few have created physical space to host events where startups are invited to collaborate with government officials. Who would have thought it possible?
Last month, the General Services Administration posted a guide to help startups navigate government contracting. And, an organization called Startups in Residence (STiR) has launched a 16-week program that allows collaboration between cities and small firms. City officials who have participated have had positive reports. The program allows city officials to submit challenges or problems to the small companies. If a participating startup offers a solution of interest, STiR makes a connection and over the next 16 weeks the startup works with government officials to develop a custom solution to the problem. For cities, this process can lead to significant innovation and quicker resolutions of issues. For small firms, it offers an opportunity for them to build credibility with governmental entities. Cities that are currently participating in the Startups in Residence program include the California cities of Oakland, San Leandro and San Francisco, and Washington D.C. There are numerous examples of success.
The city of San Leandro asked for assistance with data analytics and insights as it sought to make critical decisions about how to increase engagement with constituents. With a startup partner, the city was able to develop a platform to extract data from all available city information repositories, track trends, handle registrations and alert citizens to upcoming programs of interest.
Kansas City, Mo., selected five startup companies to partner with for a 12-week program. During this time, the companies had access to city hall office space and city data. City officials presented challenges and/or problems they were encountering. Then, in a collaborative initiative, both partners worked to create solutions. At the end of 12 weeks, solutions were presented to the mayor and city manager. The program was so successful the city is now advertising for interested firms to apply for the coming year.
Backed by a $1 million grant, Washington, D.C., and Howard University have opened the doors to collaboration in a big way. Space was provided for tech startups near City Hall. The objective has been to provide opportunities to emerging firms interested in working with government. The city hosts monthly events and provides resources for small emerging firms.
New York City has announced plans to turn a 258-million-square-foot building into a citywide technology hub. The center will include flexible work spaces, training area, classrooms and public event space. The building will be a central area for tech firms and planners estimate that the initiative will create 6,000 new jobs. If relationships can be established and entrepreneurs can learn how to work with government, taxpayers and citizens will reap the benefits.
Change happens…and much of it is very good!