Most of what you describe takes place at the state and federal level, but not local. In fact, discretionary funds are plentiful in our target market—people are often shocked to learn that we've never run into price objections when selling, and we've successfully sold to cities ranging in population from 20k to 4m. In other words, they aren't "awful purchasers" as you call them—they're hard-working, dedicated people looking to improve their efficiency with money to spend, but they aren't being provided with solutions they can experiment with on a monthly basis. We're trying to change that.In addition, the strategy you've outlined is the one nearly every incumbent in every enterprise space has leaned on to protect themselves from disruption, but it only works for so long (as we've seen time and time again). I also think people overestimate the ability of large companies to quickly adapt their offering—the machinery of enormous sales, marketing, and product organizations can't turn on a dime.
ghein|8 years ago
In my experience cities have just as many procurement problems as state/federal but with far less money to spend. You may have success with a Dropbox/Hootsuite approach of selling to non-traditional users under certain price limits. It just makes it so much harder when it's your only market.
As to plentiful discretionary funds... everyone's definition of this is different. Another challenge I've faced with local governments is that their speed to spend is similar to state & feds. Smaller sales with a sales velocity the same as if not slower than the feds is another challenge.
But if you've got people to make fast decisions and spend enough so that the unit economics makes sense you have my heartiest congratulations.
adrianratnapala|8 years ago
But still it is no accident that ncd's analysis works at the local government level: there are tens of thousands of those governments so variation means there will be some viable customers around.