GovCo
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This point cannot be emphasized enough. I've dealt with Medicaid bids and the amount of regulation one must adhere to is unfathomable. This unfortunately makes his next point just as difficult:
> Hire the best computer scientists and data nerds to improve the government from the outside.
Data nerds want to play with data. Comp Sci folks love algorithms and novel implementations. Neither of them like reading 300 page annotated Word documents with multiple revisions about every little thing a system should do, especially when the requirements are not always rational.
So the missing requirement in this list is to first hire a bunch of experienced analysts, project managers, and people who can do the paperwork and make them the bridge between the client and the coders. I would love to work on pure tech. for complex Govt. problems but I do not want the headache of HL7 and MITA 3.0 requirements.
The moment you have a good business team, you will find willing developers. Without a business team with experience, connections, and negotiation skills, you will have a hard time building the product, let alone sell it.
Working in government and having to deal with these things on a day to day basis, you couldn't be more right. Also, it doesn't help that people hate when they have to be a part of a selection committee.
We're in the learning process right now, to see if there's any interest/demand. One of the things that's come up is the RFP review process - even at county levels, I've been surprised at how... paper-based it still is, and even more surprised that people seem willing to change to e-processes.
Anyone that has any more info/insight on local gov bid processes and willing to share insight, please hit me up.
tia :)
It helps if you manage the tick the disabled-minority-veteran boxes, because then you have a better shot of getting some of the small business setasides.
And hey! If your small business manages to become prime on a contract, you'll find that Raytheon or Lockheed or Boeing will be willing to sub to you...
States are more complex, as the agencies are larger and generally have more specific needs; you can do more custom software work, but your best bet is to get embedded in an agency and learn their processes and systems extensively. I don't recommend trying to break out of a governmental "level" (local to state, state to fed) -- totally different contracting environments, and your time is best spent learning your given market very well.
After that, it's a lot of sales efforts and searching for/responding to RFPs. Your best bet is to get onto state purchasing lists (similar to GSA, but generally with a lot less red tape), as most states will let cities and agencies skip the bid process if they're buying off an approved vendor list. If you have to go through bid, the very best thing you can do is get a champion with purchasing authority and let them know exactly what your product does that the competitors don't -- it's very common to write bids so that they end up targeting a single vendor, but you have to have valid and meaningful differentiators (not always technical -- don't forget that bids encompass not only software but also support and consulting!) for the bids to pass muster. If you're looking for competitive intelligence, you can generally get access to city and state contracts under sunshine laws -- these will tell you not only what the pricing is in your market, but also what cities and agencies are looking for in their bids.
This may or may not apply, but female-, minority- and veteran-owned businesses (so-called "historically underutilized businesses," or HUBs) are usually a plus when bidding, as are small disadvantaged businesses. I strongly recommend checking out getting SDB or HUBZone certification from the US Small Business Administration if you think you qualify -- it'll open some doors for you.
Understanding the contracting world begins at step one: understanding the bureaucracy. And due to "small business incentives", small businesses have legal advantages that no "big company" are ever given.
https://www.sba.gov/content/register-government-contracting
Not saying that it is easy, but seriously. SBA.gov should have been the _first_ link on that page. Navigate the bureaucracy, define your business as a small business, and start bidding on some subcontractor deals to get your foot in the door and build up a history.
The procurement process is absolutely the biggest problem we face. The idea that the government puts bids out to an open market and therefore gets the best quality and price is a fable. Most contracts go out to a pre-selected group of companies, are are shaped to fit into the models these companies provide. There are some positive changes happening both at individual agencies and at the broader federal level as to procurement reform that look positive, but by and large this is still the biggest obstacle to getting in the game. Subcontracting is a better option to start.
We absolutely need more companies in this space, both in the product and services arena. The more companies, the more agencies will feel comfortable adopting contracting practices that are geared towards these companies rather than classic contractors.
If you're a senior level developer or UI/UX designer interested in helping people get health care and Veterans get benefits, please be in touch with me; we're hiring and have a lot of really interesting work. Experience with Go, Rails and AWS are a plus, but any significant experience in web development or design/UX will do.
Not sure the "startup work environment" of macbook pros and free lunch will really help you compete against startups that offer stock options in a profitable company. Selling people on taking a worse deal in order to make the world a "better place" always seems disingenuous to me whether the goals are altruistic (help the American people!) or commercial (re-invent the tablet!)
If I put on my employee hat for a second, this is what the deal sounds like:
1. Work on uninteresting or incredibly regulation-encumbered projects that can't or won't be measured on customer satisfaction. Where do complaints about healthcare.gov go? How are you as an employee of the contractor that made it able to respond to those complaints? At least when its a product 1) people can go to a competing product (show failure), or 2) people can use it because they genuinely want to (show success) and not because its the only game in town.
2. No potential massive IPO (per the description here).
3. Very unlikely you'll get the actual cool perks of adding quirky features you guys come up with together from analyzing customers. Its probably going to be a super refined spec, decided by a bunch of politicians, and since you're working at the lowest bid anyways even if you could afford to work on cool genuine ideas you have, you probably can't afford it.
4. Huge potential for the project to fail for political reasons anyways. (or you'll have to work with other gov contractors on a different part of the project)
5. The reality that some component of the company will have to become good at the "gov contracting game".
1. It's very rewarding to feel like you're doing civic duty. I think we have a real shot at reforming the way government percieves what's possible in government contracting.
Healthcare.gov is very rewarding to work on, because even though I'm super apolitical, I'd like to see people inside the government see that an order of magnitude cost reduction is possible, and people outside the government see that the government can produce good software.
Healthcare.gov anonymous shopper is a go and postgres app that has served >250mil visits. How is it not rewarding to serve that many people in getting their health care?
2. I've had my lottery tickets at other companies, I'm not worried about getting mine in an IPO any more. I never was part of a good exit.
3. Some of this is true, and some is not. Yes, you're not in total control of the product, because you're working with gov agencies. However, there's plenty of latitude to implement good user-focused software, especially when you're small and nimble.
4. Just like there's a huge potential for your IPO lottery ticket to fail. No different.
5. Just like some component of your startup will have to become good at the "VC schmoozing game".
Seriously, a point-by-point real world counterargument of your comment.
EDIT: relevant essay by PG http://www.paulgraham.com/icad.html
Palantir is a for profit company that works on both commercial and government projects, and is valued at $9 billion. If you believe that that is in the spirit of what this article is proposing, then sure, I suppose this is the perfect counterargument. I think its pretty clear that Palantir is a very different company with very different goals than what is being proposed here.
The point of this article is creating a "for the common good" contractor with the aim of lowering bidding prices, and increasing software quality across the board, funded perhaps by donations, and certainly not having profitability as its primary driving force. Palantir is just another company, a very successful one mind you, that yes happens to make good government software.
First, one of the things that contract selections are based off of are a history of performance. A startup has no history, so they better get some civilian projects under their belt before they start competing for government work.
Second, the government is accountable to its people, and the way that government acquisitions proves that it is being good stewards of the people's money is by hiring companies that can "prove" they aren't going to waste it. That means that your company has to meet several ISO XXXX standards, your company must be certified lean, you must be at least level 3 in the capability maturity model (CMM, which again requires a history of performance), you have to have six sigma black belts on hand, and a whole host of other crappy certifications that you have no choice to go out and get.
Plus, you have to employ a certain percentage of minority races, women, and handicapped people, or you won't get the contract -- while this sounds like it isn't a big deal, look around the startup space and you'll see that it is made up overwhelmingly of white males.
By the time you meet all these requirements (and there are a whole host of nitpicky other things to think about like the contracting process and myriad laws) and still have enough talent on hand to actually make a product, you are no longer a startup. Competing for government contracts is not the way to go for a startup. It is not a system set up to give the little guys a shot.
Source: I am a mid-level certified government (military) acquisitions professional (if you want details I am lvl I in program management and science and technology management, and lvl II in test and evaluation-- certified by the "Defense Acquisition University" which isn't a real university and required by DAWIA -- a congressional act that regulates a lot of this stuff). I am 26 and have taken over 400 hours of acquisitions training in addition to my master's degree. And I'm just the one doing the math/stats work when we test new stuff. The program managers have to navigate a minefield of bureaucracy every day, trying to prove to the taxpayer that we aren't wasting their money. Ironically we end up wasting a lot of money trying to prove that we aren't wasting it.
FUNDAMENTAL CONTRACTING AND BIDDING REFORM IS NEEDED.
Others have mentioned Palantir (for-profit) and 18F and USDS (within the federal government). Other groups to check out: Code for America (non-profit) and Department of Better Technology (for-profit)
Nope. SF is not the center of the universe.
Some of my colleagues are doing just this. Stay tuned.
Conversely, it would be great to see someone try this. The space industry (ine of the nost monolithic and change resistant industries) seems to be favouring privatization, cost, and reliability. Prove the cynics wrong!
I'm part of a small team of expats from Silicon Valley that came out to DC last year to help fix healthcare.gov. (Mostly Stanford, Google, YCombinator folks) We started our company, Nava, to bring the best of SV startups to DC and create software that radically improves how our government serves its people.
Our trajectory is very similar to what you've described, with some tweaks that I won't go into here.
In the last 6 months, we've launched 2 major projects:
- App 2.0, the new insurance application for healthcare.gov. It's processing 70% of apps coming through the marketplace, and: converts 35% more people than the old app, gets them through in half the time, is mobile-friendly (20% of apps), sits on robust, scalable infrastructure, etc etc. It was the first system that CMS (Center for Medicare and Medicaid Services) ever hosted on Amazon AWS.
- Scalable Login System (SLS), the new identity management system for healthcare.gov. Sadly, the main achievement here is that the system is actually up and available, unlike its predecessor. It's now saving the taxpayer $70M in annual maintenance costs.
Here's a Wired article from last summer about us:
http://www.wired.com/2014/06/healthcare-gov-revamp/
Our momentum is strong, the problem is important, and we're looking for good people.
If you're the type that would get fired up about reimagining broken government experiences and technology, please drop us a line at jobs@navahq.com, we'd love to hear from you!
T
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There's a fairly large government program specifically designed to award technology and R&D contracts to small businesses. http://www.sbir.gov/ There's even a good bit of hand-holding through the process to make sure the business knows how to sell the resulting product.
I've also seen many, many dozens of sole proprietorships awarded non-SBIR contracts.