If they need to do a public bidding because they did not planned to implement a service like yours soon, the whole process takes up to a year.
Cities all have a different tender process/rules. Most ask you to have an insurance of up to a 5 millions by event adding mostly 10/15k in expenses.
There was a lot of interest, but cities did not have the cash on hand to pay for my services. I was billing up to 100k/city/year.
Mostly, if you have a product that can be paid for by the federal government or the state, they will buy it in an heartbeat. Eg: if it helps handicapped people.
The good: the LTV is really long, 10+ years. Try to find a champion in the town hall, that person will help you setup your offer so that the different branches of the city are happy.
Also, overcharge. Cities love personnal support. You will spend a lot of time on the phone, talking to real people.
For more info, write me an email at bobberkarl(at)gmail.com
I've had a few discovery calls lately where people have said you can slip things by on a credit card if it's cheap enough, while others have said absolutely everything goes through a procurement process.
Very interested to hear your thoughts based on the experience you described...
The only problem is, are you willing to take up to 3 meetings for ~8 hours with 4/5 different people in person in a small city hours away from where you live for 2k$ a year in revenue?
And if your answer is yes, please shoot me an email.
Truth is, and i can't stress it enough, you are a 100% right. If you can find someone to cooperate with after you already beat him at the public bidding process, you did 90% of the personal relation work.
Now you know why software sold to governments starts at hundreds of thousands per year.
Because they are small organizations, they are used to pick up a phone and talk to someone right away.
PRINT EVERYTHING. Buy a nice presentation template online, print it on glossy paper, and you will always have a meeting in person or at least, a phone call.
My point is, they may very well be willing if they could understand the material value of it.
Don't call it 'SaaS' - call it by whatever problem/enhancement it is creating ie 'we need software to increase traffic flows by 10%' etc..
* Do not wait wait for them to decide they need a solution and then engage; your business will die. Success comes from educating prospects, helping them understand the benefits -- hell, even helping them write the RFP, if they'll let you -- and being the preferred solution before the bidding process formally begins.
* Related: All of your meaningful sales will come from formal proposals submitted as part of an RFP process. You need to get good at being the insider who helps them write the RFP or you need to get good at writing better, more compelling (not cheaper, not fancier -- more compelling) proposals. Even better? Get good at both.
* Bob correctly referenced the fact that you'll have high insurance requirements. Don't let them faze you too much -- commercial liability is cheap. Errors and Omissions, on the other hand, can be pricey and you want to avoid having to have that if possible.
* Get very good at finding local partners, even if you don't need them. Big projects that leave some of the money in the community are more compelling.
* If you are not a woman or a minority, get good at finding local partners who are certified as women-owned or minority-owned businesses. Some public agencies set up their RFPs with an automatic point deduction from your score if you can't tick this box.
Happy to chat more if it's helpful.
Does this not bother anyone?
One of the biggest hurdles for us besides the timeline, which I haven't seen mentioned yet, was compliance. The city had a very antiquated security checklist they wanted us to satisfy which was written exclusively for their existing on-prem software deployments in a MS ecosystem, and thus impossible to meet as a SaaS provider. I suspect many smaller municipalities will present you with the same nonsense. In our case, this was not what ultimately killed us, but based on this experience I would advise you to avoid putting all your eggs in one basket and perhaps avoid altogether working a government that is not ready for SaaS once you find out that is the case.
The sales process has typically involved multiple in-person meetings (until recently, at least) and been very long with larger contracts needing to go out to tender.
Not sure if it'll be the case for you, but we often need to persuade multiple people from the department that will be paying for the software as well as one or more people from the municipality's central IT team (who naturally have rather different concerns and priorities).
It's a hard business to bootstrap unless you have a large bank account to fall back upon for years while waiting for sales growth to kick in.
Sales processes are long. 6 to 12 months if I rember correctly. But ones you sell, it might well be a 10-15 years subscription with a bunch of additional services like support contracts and customizations. Also it becomes easier ones you have the foot in the door somewhere and use word of mouth referals from there.
I don't know how well typical start ups do in this space, because of the stability requirements which might not be something you'd want to commit to. But it has been exellent for the fully bootstrapped companies I know.
Regardless, it's hard to make inroads into any government space if you don't already have experience in it. It's not nepotism or "backroom deals" but more just jargon, processes, understanding the buyer, etc, etc.. aka not unique to government at all.
When you're first trying to enter any space, coming into sell is the hardest approach. You're viewed with suspicion. It's 100x easier (still not easy) if you're already a participant in some way.
I asked them if they ever considered expanding to the US. They answered something like this:
>No, because governments in America are constrained because Americans hate their government and get upset whenever it spends any money. Americans want their government to spend the least by buying the cheapest stuff, so dealing with them is more trouble than it's worth. No local government in America will ever invest in quality.
Had to deal with them last year.