How new open-data policies enable start-up's business model

In government contracting, access to the right information can make all the difference. The biggest vendors rely on consultants and advisors with deep knowledge of the bureaucracy and networks of relationships inside government, but new open data policies are making government contracting and financial information accessible in new ways.

Govini, a San Francisco-based startup, is looking to shake up the market dominated by Deltek and a few other firms, by offering access to a wide array of contracting data at the federal, state, and local level, across a range of industries, including IT and telecom, defense, environmental, health care and business services. Govini acts as a portal into the maze of government contracting opportunities, allowing users to search across agencies for opportunities based on geography, size, sector and more.

Deltek is undoubtedly the 800-pound gorilla in the contracting information space, and firms like Centurion Research Solutions are seeking to carve out their own analysis-driven business.

But Govini is modeled more along the lines of companies like Jane's Information Group, which built a thriving business with military and aviation contract data, or McGraw-Hill, which created a market for national construction information based on data from building permits.

It's the kind of service that's only possible under new open data policies that put the onus on agencies to release information in uniform, machine readable formats. President Obama, in a July 8 White House event touting his new management agenda, named open data as way to use government information to generate private-sector economic growth. "We've opened up huge amounts of government data to the American people. Put it on the Internet for free," he said.

The ability to process large volumes of government data, "takes the friction out of the manufacturing process and allows us to deliver to the marketplace at a cost that was previously prohibitive, and that the legacy data and information services couldn't do," said Govini founder and CEO Eric Gillespie. Subscribers pay $3,600 for access to federal information of the type you'd get on Deltek GovWin or Bloomberg BGov, and just over $13,000 for federal, state and local information, plus analytics and information about competitors.

A raft of technological innovations makes this all work: the ability to aggregate large volumes of data as a result of bandwidth increases and new database software, the ability to visualize data using analytics, and the ability to share that information in the cloud. Finally, and crucially for Govini, is the deployment of large public sector datasets. These are the "four Vs" of big data – volume, velocity, variety and veracity. With the trend toward open government data in full swing, said Gillespie, "for the first time ever we have the four Vs working in unison."

At the same time, Govini is not just trying to build an information service. According to Gillespie, they are looking to disrupt the market for professional services in government contracting in much the same way that Google disrupted the market for advertising – by automating processes that were once handled in a one-off, non-repeatable basis. The historical data in Govini's systems are designed to give users a sense of what opportunities are worth chasing, based on win probability, value, and other factors.

"Most federal contractors hire professional services firms to come in and figure out market dynamics in a non-systemic and often times random way," he said. By replacing that bespoke work with automated, machine-driven analytics, Gillespie said, Govini could create a market potentially worth billions annually.

Govini does have consultants on staff, but they exist to help clients use the system. They don't place calls to contracting officers, make FOIA requests or produce bespoke reports, or offer specific advice on whether a user should or should not go after a contract. Of course, it is far from settled as to whether the players in the federal market will want to shift from relationship- and experience-driven expertise to analytics.

Currently, Govini has about 1,000 subscribers at the small- and medium-size business level, in addition to about half of the top 100 federal contractors in its client book. Most of the larger clients have multiple subscriptions. Gillespie wouldn't disclose any revenue information. Govini is a privately held company, and backed with investments by Silicon Valley venture firm Accel Partners.

One advantage is that potential new clients are contained in the data that Govini trades in. "Figuring out who plays in this space and who would be interested in doing that more efficiently, is pretty simple and pretty straightforward," he said.