Thinking of selling to Public Sector? Keep these things in mind.

By Brian Michael , Founder and Embedded CRO

I started my tech career as a reseller working with dozens of companies who were trying to break into Public Sector (PubSec). I was lucky enough to catch on with one of them and help them grow tremendously, and after spending a number of years building commercial deals and teams, went back and started a PubSec line of business within a larger public company.?

My experience tells me that companies/executives often either underestimate the challenges in breaking into PubSec or think that it is so scary/complex that they never even really consider it. If you are in either bucket, here are some key questions to consider:

FED vs SLED

Where do you think you will have better product market fit: Federal (Fed) or State, Local, Education (SLED)??

• Fed deals will typically be larger, decision makers are often consolidated in Washington, D.C. Budgets are large, but FEDRAMP can be a meaningful hurdle: cycles are long and often lumpy (closing at end of Fed fiscal year on September 30).?
• SLED is very distributed, cycles can be shorter, fiscal years vary by state, but ACV is often lower.??

Know your place on the commodity curve

The old saying “No one gets fired for buying IBM” rings true in PubSec. Often risk tolerances are low, which can work to your advantage in some cases and hurt in others. Are you evangelizing a new idea, service, product? Or are you helping an agency do something they already do faster/better/cheaper? If the former, make sure you build that into your revenue plan/forecast. It will take longer.?

Dedicated reps or blended territories

Can you sell to PubSec with your existing team? The answer is maybe. Depending on the answers to the questions above, it could be possible. That said, doing so without knowing why you will be able to bridge that gap could be fatal. PubSec has its own complexities, language, ecosystem, buyer personas, value drivers, etc. Don’t assume what’s working for you in commercial will translate 1:1.

Channels/resellers/partners

Battles are won and lost here. Nailing and scaling the right few partners can propel your business forward. Not knowing your way around this world will cost you deals and, more importantly, LOTS of time. Be selective; deals make partnerships, partnerships don't always make deals.?

Forecasting

Be sure you have a sober view of when you expect this new line of business or market to return capital. PubSec business is very sticky, but it's slow. Grow your teams and targets at a measured pace, especially early on. I have seen many sales leaders try to open PubSec for their company and not set the right growth expectations, then end up separating only to see some or much of their work start to pay off quarters later. Set up a three year plan and be realistic. If you and your CFO don’t like its shape, don’t assume brute force or incremental hiring will be able to change it.?

If you found any of this insightful or valuable, have more questions, or want to chat live, feel free to shoot me a note at [email protected]. Happy belated birthday, America!