Why we’re thinking small in Civic Tech in order to make a big impact on government

By Scott Burns, CEO and co-founder of GovDelivery

Civic Tech is getting a new wave of investor attention.

In a recent Tech Crunch piece, Omidyar Network’s Stacy Donohue wrote how Civic Tech is ready for investment.  New funds have popped up, traditional VCs are calling into Civic Tech, and larger companies have started to make acquisitions to consolidate the many small companies in the space.

GovDelivery has made three such investments in the past year.  First, we acquired NuCivic, a company that brings purpose-built applications to manage government open data, collaboration, and workflows to the open-source Drupal platform.  Second, we acquired a small nonprofit called TMGov to enhance the reach of our GovLoop Academy courses.  And, just recently, we announced an acquisition of Textizen, which delivers high impact, interactive capabilities that accept feedback from the public, drive engagement and promote positive behavior change.  All of our acquisitions to date, including GovLoop which is now an important part of our overall business, were in the pre-revenue or early startup phase when we acquired them.  That seems counter-intuitive to some.  We aren’t Venture Capital investors so why don’t we buy more “proven,” large businesses?

GovDelivery was an early Civic Tech company launched from my basement apartment at the end of the dotcom era in 2000 with aspirations to bring in $100M within three years.   It was called “e-government” back when elected officials said things like “Get online not in line.”  We were optimistic and capital was flowing freely to many companies in the space.  Some raised $20M or more to pursue opportunities in e-government.  In the end, few survived.  It was touch and go for GovDelivery for a while, but by staying focused on the compelling need of connecting government with the public, we turned a corner in 2005 and started making the massive impact we knew we could.  Our more than 200 employees and the technology solutions they deliver for digital outreach, learning, and data management serve 1,000 government organizations and connect those organizations with over 90 million people.  These clients just had to wait about 10 years longer than our early estimates for us to be at the scale we wanted to achieve.

People tend to think “big” with government.  Big budgets, big organizations, big procurements.  We’ve learned that thinking small is where the action is.  The change that government needs almost always starts with one individual.  We’re intrigued when we see a technology that is truly impacting even one government organization’s ability to change a citizen’s behavior in a positive way. We’re intrigued when we see technology or content change the way government employees work and make decisions in ways that matter.  Because technology has advanced profoundly over the past five years in areas that support government’s needs (digital channels, mobile access, data management) looking only at bigger companies would exclude some of the newest and most exciting innovations.

We’re also thinking smaller because we can advance early stage, innovative solutions quickly and scale the impact.  Like a couple of other “survivors” of the first wave of e-government, we’ve gained the scale to take new technologies to a large number of clients quickly.  The public sector requires a greater focus on security and compliance than other sectors.  We have invested millions in security, scalability, client facing staff, and support so government can truly rely on the technologies we bring them to power the most vital communications.

The client base that took us 15 years to build now includes every Federal department, hundreds of cities, counties, state agencies, and nearly 100 organizations in Europe.  These clients want new innovations without sacrificing support and security.  So we continue to look to acquire companies doing breakthrough things unique to government that are ready to scale, whether they are pre-revenue or half our size. So far, we’ve seen better innovations in the earlier stage companies. I don’t think government should have to wait 10 or more years to get its hands on the small innovations emerging in the Civic Tech marketplace, when we can bring at least some of them into the GovDelivery team and provide the right expertise, security and support to start driving impact now.