Comment by bobberkarl | Hacker News Reader

Comment by bobberkarl | Hacker News Reader

I did. I had a startup selling transportation software to small cities (<40k population). Sale process was 6 months. The tender process is excruciating. You will need to meet them up to 5 times to get an informal yes (3 months), and up to 6 months to get a contract (only if they do not need to organize a public bidding).

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

Do you think it's possible to sell a "low dollar" SaaS (e.g., price points below $200/month) to cities?

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...

For most cities, YES. If they can pay for X with a credit card, and it`s cheaper than 1k$ a month, they will.

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.

Yikes, when you put it that way... No thanks!

How did you find cities to bid for. I once did a very cursory look into government contracts and selling products / services to local governments by checking out the sites for some random small cities and a few states. Very few had open bids and the ones that did were typically not for a software related project.

You call every city that might need the thing you are proposing, you talk to the receptionist and ask her who you should talk to about $SUBJECT. She will give you multiple names, extension numbers, and email addresses.

How do you afford the travel time? Seems like all the handholding would be quite expensive.

That gets rolled into the price.

Now you know why software sold to governments starts at hundreds of thousands per year.

Right. On a bill, it will show a 80/20 ratio for the tech/support pricing, but in your internal cost structure, you put 30% for the tech and 60% in support.

Because they are small organizations, they are used to pick up a phone and talk to someone right away.

Local consultants. Hire a local engineering firm or PR firm or attorney as a representative to do the handholding. You hire someone who knows all the right folks with a good rapport and a grasp of the technicals. Even paying someone who normally charges $400/hr for a few weeks of work who has the right contacts can reap rewards. You can structure those consultants with a lower base rate and a commission upon success.

The problem is, in smaller cities, the local consultants are your competition. They are the one providing the cities with decade old technologies and ugly U.I./U.X.

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.

x0xo is perfectly right. I did not own a car, so it costed me 4k$ just in car/hotel/food/printing for my first client.

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.

It's one of the tragedies of public services, that the value is not always apparent. Would citizens be willing to pay $x/year for so and so enhancement? There is probably more value there than adding one staffer.

No the citizens are not willing. Just look at the median income of small cities, then look at their budget. Some cities have a 5M$ budget, and police is half of it. No mayor will raise taxes for a SAAS.

Obviously, they are not willing on the face of it.

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..

You are right by saying they may. Making that happen is still pretty hard.

Thanks for this comment. Excellent learning for me!

Happy i had enough experience to be able to contribute to HN for once. You're welcome.

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