Co-Founder of The Atlas. I’m big on cities, infrastructure, reducing inefficiency, helping urban innovators succeed & the Michigan Wolverines.
Created:Thursday, May 9, 2019
Updated:Thursday, May 9, 2019
Shortening the long city sales cycle at Smart Cities Week San Diego
People who work for companies that partner with cities know that cities are wonderful partners and customers: they have mission, impact, scale & lots of stability. But the city sales cycle is notoriously long. A recent discussion at Smart Cities Week San Diego noted that while procurement is often blamed for the long city sales cycle, that may not be the case…and suggested other opportunities instead.
A few weeks ago, I facilitated a discussion between two forward leaning local government procurement officials – Kristina Peralta (Director of Purchasing & Contracting at the City of San Diego) and Jana Vargas (Director, Procurement & Contract Services at the San Diego International Airport) – and a diverse group representing entrepreneurs, big business, and city officials at Smart Cities Week San Diego…our hometown!
To kick-off the session, I shared some context from our experience working with cities over the last 10 years:
Cities will always be risk averse, and for good reason. To understand why, checkout this article from Former Mayor Michael Nutter here.
To buy different things, cities have to buy things differently. For context, checkout this Brookings Institution article here.
Here were some of the highlights and suggestions that came out during our discussion:
The long city sales cycle is a result of scoping, not process.
When a project hits the Chief Procurement Officer’s desk, the process is already over halfway complete. The rest of the work is managing process to ensure transparency and fairness. The longest part of the procurement process is defining what is actually being procured. Helping city departments streamline the creation of scopes of work would go a long way in reducing the city sales cycle.
If a city department wants to buy something, it will find a way to buy it! This means that startups who want to work with cities need champions within city departments. Tips for identifying those city champions is a topic for a whole other article, but this is really, really important.
Reduce risk however possible. City officials will ALWAYS ask “where has this solution worked in a city that looks like mine to solve the problem I am looking to solve?” Answer the question for them, in advance, using case studies and references.
Educate, educate, educate. The demands on city officials’ are immense, with increasing obligations and often decreasing budgets. That is one reason why market research (and by extension, the city sales cycle) takes a long time, and frankly, it’s often easier to buy the thing the city has already bought before. Helping cities understand the range of solutions available to them early is key to getting new solutions deployed.
Data standardization is still a work in progress.
If smart cities are driven by better data, then it’s important for cities to get data that is actionable wherever possible. Often times, cities that head into big capital projects with lots of different contractors will get to the end of a year’s long project with multiple different sets of data that can’t easily be merged and therefore used. Cities need to demand standardized data upfront in the RFP!
Transparency is key, but hard to execute.
City procurement offices prioritize fairness and transparency above all else. That means they want every potential partner to know when they are putting something out to bid. And companies obviously want to know about all relevant opportunities as far in advance as possible. Unfortunately, most cities don’t work with multi-year budgets, so it’s hard to project out what is coming down the pike and when. The City of San Diego now posts solicitations a year ahead of time, which is a good step forward.
Any data that can give companies more visibility early on about city pain points and emerging opportunities would be really helpful in shortening the long city sales cycle.
Entities like the San Diego International Airport are leading the way by creating an innovation lab, where early stage companies can test and prove their solution in a real environment – and if successful, secure a contract.
The City of San Diego is now creating their own internal accelerator program for govtech and civictech solutions.
It’s true, the city sales cycle can be long and arduous. Especially for small companies and startups. A better understanding of why that is – the understandable risk aversion of cities, the history of corruption in public procurement, the enormous time demands on city staff – points to many of the solutions that were suggested during our recent conversation at Smart Cities Week San Diego.
What are some of the other ways you’ve seen cities make it easier to adopt new solutions & technologies?