Feds welcome start-ups
One year later, Silicon Valley firms begin to succeed ? with a little help
- By Judi Hasson
- Feb 06, 2005
Executives of five Silicon Valley start-up companies faced a daunting task last year when they wanted to start selling their software and ideas in the federal information technology marketplace.
The group teamed up, and now, a year later — with some help from a former federal official and a California organization for IT executives — they are in the market and becoming successful.
"We learned we had to walk before we run, but we needed to get to a stage where we are," said Peter Mauel, vice president of sales for Certive, a provider of business intelligence middleware and one of the five firms.
It was not easy, said Stuart Robbins, founder and executive director of CIO Collective, a nonprofit organization of IT executives based in Oakland, Calif. The collective helped the fledgling firms from its base in Silicon Valley.
Robbins chose the five companies to create the team. His acquaintance Alan Balutis, a former federal chief information officer and then president of a small technology solutions firm called Veridyne, was looking for a particular combination of technologies from the company's potential partners. Robbins found those capabilities among the five firms and chose to help them.
But like many newcomers to the federal market, officials at the companies were naïve about the realities of contracting.
They didn't know, for example, that once a request for information is issued, it's usually too late to get the attention of the agency in charge. Networking has to start long before the official word goes out about a new opportunity, something the company leaders had to learn fast, Robbins said.
They did not know what government contracting vehicles were or how they were used. They did not know how to partner with other companies or how to become subcontractors working with a prime contractor on a project.
Robbins said the companies had something unique to offer but little direct access to agency officials. Over the course of the year, they learned how to build relationships with federal officials.
He described himself as the group's "application programming interface," a term that refers to a programming standard that enables communication among various types of software.
Robbins was a necessary interloper, Balutis said. "It really is a challenge with them being as small as they are and not having a Washington presence," he said.
But Balutis, who now leads Input's government strategies unit, said the young firms had something that most Beltway start-ups do not: diversity in thinking and novel ways of doing things.
The firms have now joined Veridyne's "ecosystem" on Commerce IT Solutions NexGen, the Commerce Department's governmentwide acquisition contract that provides IT services and solutions. Balutis described the ecosystem as a loose partnership with the start-ups.
"We've put together a very diverse — in many senses of the word — team," Balutis said. "One part of it was to go out and get very small, innovative, niche — but intriguing — technologies and making them part of the team."
Even with innovative ideas, the firms still found it hard to get anyone's attention.
One problem is the length and timing of the federal government's contracting cycle. Another is the extremely long time periods for requests for proposals. And a third is not having an office in Washington, D.C.
But persistence is paying off for this young team. Certive, for one, has three or four proposals on the table in the federal sector, including at the Air Force, Navy and Treasury. Officials expect to have their first deal with the federal government in a few weeks.
Juanita Lott, founder and CEO of Bridgestream, a 4-year-old Oakland, Calif., firm, said the best way into the market for a young company is through a relationship with a firm like Veridyne.
"From our standpoint, it is an issue of timing," Lott said.
But more than timing is required, and these companies may be offering something that insiders are not, said Mauel, who is Certive's vice president.
Still, he said, companies outside Washington need to find a way to create "an awareness that there are emerging technologies out there besides the ones being bought by Fortune 500 companies."