
Ask HN: Has anyone built a SaaS for local municipalities? - jokull
I&#x27;m building an aggregator for building permits and planning meeting notes. My business model is to sell alerts based on coordinates and&#x2F;or search terms. Would love to hear from anyone bootstrapped selling a platform&#x2F;SaaS to municipalities because we&#x27;re considering also selling solutions to the public sector. I assume the sales process is long?
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bobberkarl
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

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

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ethagknight
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.

~~~
bobberkarl
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.

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gwbrooks
I sold to cities, counties and regional agencies in the U.S. for 30 years.
Random suggestions:

* Do not wait wait for them to decide they need a solution and then engage; your business will die. Success comes from educating prospects, helping them understand the benefits -- hell, even helping them write the RFP, if they'll let you -- and being the preferred solution before the bidding process formally begins.

* Related: All of your meaningful sales will come from formal proposals submitted as part of an RFP process. You need to get good at being the insider who helps them write the RFP or you need to get good at writing better, more compelling (not cheaper, not fancier -- _more compelling_ ) proposals. Even better? Get good at both.

* Bob correctly referenced the fact that you'll have high insurance requirements. Don't let them faze you too much -- commercial liability is cheap. Errors and Omissions, on the other hand, can be pricey and you want to avoid having to have that if possible.

* Get very good at finding local partners, even if you don't need them. Big projects that leave some of the money in the community are more compelling.

* If you are not a woman or a minority, get good at finding local partners who are certified as women-owned or minority-owned businesses. Some public agencies set up their RFPs with an automatic point deduction from your score if you can't tick this box.

Happy to chat more if it's helpful.

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Gollapalli
Literally just commenting to save for future reference. Thanks for this.

~~~
matsemann
If you click the time of the comment (x minutes ago) you get taken to a
permalink for that comment. There you can mark it as a favorite, and later
find it in your favorites in your profile.

~~~
rhacker
Thanks for this, didn't know it was a feature.

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lq0000
Many years ago I was part of a SaaS startup for which local governments were
one of our target markets. During our beta we quickly gained interest from the
relevant department of the city and were then led on by them for the better
part of a year before we went under. This behavior seems consistent with a lot
of the comments that have already been posted.

One of the biggest hurdles for us besides the timeline, which I haven't seen
mentioned yet, was compliance. The city had a very antiquated security
checklist they wanted us to satisfy which was written exclusively for their
existing on-prem software deployments in a MS ecosystem, and thus impossible
to meet as a SaaS provider. I suspect many smaller municipalities will present
you with the same nonsense. In our case, this was not what ultimately killed
us, but based on this experience I would advise you to avoid putting all your
eggs in one basket and perhaps avoid altogether working a government that is
not ready for SaaS once you find out that is the case.

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lefstathiou
My brother in law’s brother is the founder of ClearGov which sells SAAS to
municipalities for reporting budgets and such. If relevant shoot me an email,
include some information so I can lay it up for him and I will make an email
intro. Can’t promise other people’s time but never hurts to ask.

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mattcollins
At [https://apply4.com/](https://apply4.com/) we have a SaaS helping local
municipalities streamline how they manage particular types of permitting,
including permits for filming and special events.

The sales process has typically involved multiple in-person meetings (until
recently, at least) and been very long with larger contracts needing to go out
to tender.

Not sure if it'll be the case for you, but we often need to persuade multiple
people from the department that will be paying for the software as well as one
or more people from the municipality's central IT team (who naturally have
rather different concerns and priorities).

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msrpotus
Worked on a startup doing something very similar--would recommend against it.
As everyone else is saying, the sales process is incredibly long and most
local governments just aren't used to buying SaaS. Local partners are
important AND you'll need to be very good at sales: can't rely on marketing to
bring in customers.

It's a hard business to bootstrap unless you have a large bank account to fall
back upon for years while waiting for sales growth to kick in.

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ykevinator
Anything over a threshold requires bidding (usually rfp process). There are
only like 20 cities that have money, everyone else is scraping buy. If you can
deliver value for $100 / month, you can make money, otherwise you're looking
at the rfp process. There are rfp aggregators like rfpmart and others that
capture about 50% of the rfps out there. You should also be warned that there
probably is competition out there even if you were unaware of it.

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jokull
rfp threshold is closer to 4000usd in Iceland. An annual contract could be
rolled year-by-year under that, and there are 72 municipalities to sell to.

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4ndrewl
Worked on some of this in the UK a few years ago. Main complexity from a tech
pov is hooking into whatever CRM and line of business and workflow/workforce
management solutions the local authority uses. And then in public sector it's
not unusual to have a requirement for open bidding for a solution.

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smoe
The first company in Switzerland I worked at in the mid 2000s as one of the
first employees, did records and project managment platforms, intranets and
CMS originally for civil engineering projects later for goverment agencies,
cities, states, NGO, public schools and universities, etc.

Sales processes are long. 6 to 12 months if I rember correctly. But ones you
sell, it might well be a 10-15 years subscription with a bunch of additional
services like support contracts and customizations. Also it becomes easier
ones you have the foot in the door somewhere and use word of mouth referals
from there.

I don't know how well typical start ups do in this space, because of the
stability requirements which might not be something you'd want to commit to.
But it has been exellent for the fully bootstrapped companies I know.

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artur_makly
[https://neighborland.com/](https://neighborland.com/)

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caseysoftware
I'm an investor in [https://permits.com/](https://permits.com/) which is that
exact space but potentially different business model.

Regardless, it's hard to make inroads into _any_ government space if you don't
already have experience in it. It's not nepotism or "backroom deals" but more
just jargon, processes, understanding the buyer, etc, etc.. aka not unique to
government at all.

When you're first trying to enter _any_ space, coming into sell is the hardest
approach. You're viewed with suspicion. It's 100x easier (still not easy) if
you're already a participant in some way.

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ben-gy
Municipalities are my biggest client base for
[https://covidcomply.org](https://covidcomply.org) \- I’ve been doing a spray
and pray sales approach for this that has been going very well - governments
like to make things complicated but what I’ve found is most of the time the
person on the other side is sick of the long complex processes as well which
makes relationship based sales work well - this in references to Australian
culture though - this might not translate to wherever you are based

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deanebarker
I was at a conference in Australia once (I'm an American). I met a company
there that sold software to local governments.

I asked them if they ever considered expanding to the US. They answered
something like this:

>No, because governments in America are constrained because Americans hate
their government and get upset whenever it spends any money. Americans want
their government to spend the least by buying the cheapest stuff, so dealing
with them is more trouble than it's worth. No local government in America will
ever invest in quality.

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vivekpreddy
Remix.com sells transportation software to local municipalities. I believe
they have a ton of traction worldwide at this point.

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phonon
[https://en.wikipedia.org/wiki/Startup.com](https://en.wikipedia.org/wiki/Startup.com)

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pryelluw
[https://www.governmentwindow.com/](https://www.governmentwindow.com/)

Had to deal with them last year.

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giantg2
Many small municipalities outsource their permits and inspections. It might be
better to target those inspection/permit companies.

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CodinM
Barcelona made this [https://decidim.org/](https://decidim.org/)

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j_rosenthal
www.peoplegis.com's peopleforms and mapsonline, on which is built everything
from building permits and payments, workorder management and snow ops, to
elder services, dog permits, cemetery management and a lot more. Incredibly
flexible SaaS used by a lot of small-medium cities and towns.

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eps480
[https://opengov.com/](https://opengov.com/)

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gumby
Opengov is probably the market leader, and it’s taken them a while

