A Startup’s Guide to Working with the Government – Part 2

At Eclipse, collaborating with government agencies is core to our mission of transforming physical industries. We have worked with our portfolio companies to forge partnerships with transit agencies and facilitate on-demand dynamic routing via RideCo, serve the U.S. Department of Defense through companies like True Anomaly and Ursa Major, and develop new regulatory frameworks for automated aviation with the Federal Aviation Administration (FAA) with Reliable Robotics. It’s common for many startups to steer clear of government involvement due to perceived operational opacity, extended sales cycles, and the substantial effort required before making significant headway. Winning contracts is akin to playing the ultimate strategy game. In this piece, we share 5 hard-won lessons learned on effective government sales and engagement strategies, as well as common pitfalls to avoid. These insights are drawn from our firsthand experiences, network of key government leaders, and the success stories from our portfolio companies. 1. Define your objectives clearly — there can be multiple Before you do anything, start by defining your objectives and setting some clear goals. Know what you’re after and why – but just as crucial is knowing what you’re not chasing. Getting regulatory approval, for example, is a whole different ball game than crafting contracts.

This is a big topic, so we’ve created a deeper guide to demystify your objectives and craft a winning strategy tailored to your goals. 2. Know when and how to get on-the-ground support in D.C. Washington D.C. is a face-time, relationship-based culture. There is simply no getting around it. “If the request comes from a person or organization you know, you take a second look,” explains Sameera Fazili, former Deputy Director of the National Economic Council and Deputy Assistant to President Biden. Plus, people in government speak their own language and mastering the jargon, acronyms, and nuances can take years. “A seemingly straightforward request like ‘we want a policy’ could prompt 3-4 further inquiries within the U.S. Government’s space enterprise. For example, should the policy be administrative, legislative or a presidential memorandum?” says Katie Wall, formerly a staffer for an ex-Vice President, Chief of Staff at the National Space Council, and currently serves as Director of Government Affairs at True Anomaly. It is crucial to enlist experts with relevant connections and adeptness in breaking through bureaucratic barriers, and most importantly, understand the context relevant to your business. Given their specific skill set and relationships, these experts — both in-house and external — come at a premium cost, making it crucial to budget accurately. Timing also matters: Hiring too early risks overspending without direction, while hiring too late could risk missing key budgeting and planning cycles, leading to a year-long wait for the next one. Here are some tried-and-true guidelines on who to hire and when: – Don’t know where to start? A government-focused advisory firm — with expertise in your domain— can outline achievable goals, navigate different agencies and decision-makers in Congress, and assist in crafting a plan within a set timeframe. The commitment can be project-based and time-bound, so no long-term commitment is necessary. – Set your plan in motion with lobbyists. If you have a clear objective, lobbyists are great to get your message in front of the right decision-makers in both the House and Senate, speaking to both sides of the aisle. They’ll handle prep with junior staff, brief you on their political priorities, and draft advance memos so that you can focus on closing deals.

The most effective lobbying firms for startups are often small and resemble startups themselves, comprising people who left the government within the last 2 years. Make sure they can hustle for you and have the relevant relationships.

Pro Tip: Look at their track record and check their other clients to gauge how you stack up in importance. All lobbyists and their clients are publicly disclosed by law, and a quick search can tell you who their other clients are: House and Senate. Lobbyists have limited resources; ensure they’re focused on your priorities versus a Fortune 500 company that’s paying them 5x your budget. – Set your plan in motion with in-house support. When you’ve solidified your execution plan but need additional support —especially if you’re heavily reliant on the government as a customer — hire an in-house specialist. The best hires are former government officials seeking roles outside of the government — those who have been on the other side of the table. Ask for connections from your network. This was the case for Katie Wall, who posted on LinkedIn that she was open for new opportunities. A few weeks later, Even Rogers, CEO of True Anomaly, had lunch with a colleague who had worked in government with Katie and seen her LinkedIn post, and quickly connected them. 3. Take the time to understand your audience — and their constraints In Silicon Valley startups, there’s a perception that the government is ineffective at building, while in Washington DC, startups are seen as eager to move fast and break things. Both hold some truth. Bridging these cultures is crucial to effectively communicate your objectives. Jay Walder, the former CEO and Chairman of the world’s largest transit systems, the MTA in New York and MTR in Hong Kong, as well as several transportation start-ups, notes the differing perspectives from his experience on both sides. “Startups offer immense potential for personal and professional gain, yet acknowledging the slim chance of success and embracing failure is inherent in building a great company. Conversely, the government operates with a different risk tolerance and often cannot embrace the potential of failure that is inherent in the start-up model,” Jay says. “ There’s also a tendency within startups to think that government constraints don’t have validity. Startups see opportunities for transformative change, but we have to recognize that there are some constraints that have real validity, and we can’t be dismissive of these things.” Jay encountered these challenges when leading a nationwide bike-sharing program. “We often think that it is just a straight line to go from a successful pilot to a model at scale. Scaling bike-share wasn’t just about adding bikes or stations; we needed to grasp each location’s unique interplay of factors,” Jay says. “For instance, hospitals have non-standard operating hours, which dramatically impacts the use of bikes nearby at different times of day. Understanding these interdependencies across 50, 100, or even 500 different locations is critical. These are the types of scaling challenges that startups should be thinking about early on and showing an understanding of this is important to gain and maintain government trust.”

Founders who recognize this and address these constraints head-on are more likely to be set up for long-term success, beyond the feel-good meeting or two. “The reality is that Silicon Valley’s reputation is to build fast and break things, and that makes you more suspicious of startups that are pure tech plays. There is a wariness that we have different objectives,” Sameera says. “Responsible innovation is key.” 4. ‘Feel-good meetings’ are in abundance, but follow-up is key Securing high-profile meetings can feel like winning the lottery, but when there is a lack of substantial follow-up and sustained interest, you may come away feeling disappointed.

Here’s the thing: government officials get pitched a lot of ideas every day. Recognizing that a good conversation is only the beginning of a long sales process, and not the end goal, can help internal stakeholders accurately calibrate to where you are in the sales cycle and avoid missed expectations. How do you push for follow through? Craft a very clear, compelling messaging about what you want to achieve aligned with their priorities, and then follow-up consistently, but not intrusively by sending relevant information or news clippings to stay relevant and top-of-mind. Polished physical leave-behind materials are also essential. You can’t imagine the number of times a beautifully designed PDF has been blocked behind a government firewall. “Never underestimate the value of ‘leave-behinds’ in offices. This includes white papers, presentations, and swag (think patches, stickers, lapel pins). I still have much of the industry swag I was given as a staffer proudly displayed on my office wall,” Katie says. Creating opportunities for continued engagement outside of formal meetings, like receptions, dinners, conferences, etc., is another great strategy. “Oddly enough, it’s not intuitive that you would rather go to a reception than take an individual 1:1 meeting. But, sometimes you feel like you can learn a little bit more and get a chance to talk to other people who might give you a better 360 view on that company; you’re seeing their broader pitch,” Sameera says. 5. Map out your stakeholder ecosystem Government ecosystems can be unnecessarily complex. Oftentimes, the contracting authority, budget holders, and the end user all sit across different organizations with competing priorities. That does not even consider the agencies involved in regulating your company or your product. Nor does it include policy offices like the Industrial Base Policy, which works on longer term policies that affect DOD’s operational readiness and manage the agency’s Defense Production Act (DPA) program. Your goal should be to understand how you fit into what already exists. Even within a single government entity like the Department of Defense (DOD), stakeholder groups vary widely. There are service branches, combatant commands, research and innovation groups (e.g., Defense Advanced Research Projects Agency), and policy offices (e.g. Industrial Base Policy) influencing long-term strategies. The group responsible for funding decisions (Congress) is different from the agency distributing funds or handling contracts (a specific agency within the DOD). The end users are entirely different categories, typically generals, warfighters, or service members in the field. It is also worth noting your investors may view R&D contracts from innovation-focused agencies differently from longer-term procurement contracts from a Program Executive Office, and bridging the gap between R&D and procurement is notoriously difficult.

Here are some reputable ways to better understand the key organizations: – Bgov.com is a good platform that provides insights, analysis, and information on government contracting, legislation, and policymaking in the United States.

– Legislative documents, such as the National Defense Authorization Act (NDAA) for specific language. Major programs have specific line items with budgets attached, from F-35 fighter planes to Iron Dome defense systems. – Department organization charts. While it might seem straightforward, the layers of hierarchy in government can be surprisingly complex. Government respects and operates within clear hierarchies. Understanding this is key to knowing who to engage with and when. Final thoughts Government contracts — substantial and intricate — present enormous potential as a business catalyst. Executing top-tier strategies — such as assembling the right on-the-ground team and understanding stakeholder constraints and ecosystems — is paramount in securing these sought-after contracts and relationships. Mastering these challenges unlocks an array of opportunities, fueling innovation, reshaping industries, and making a profound societal difference.

This is part 2 of a 2-part series. Part 1 dives into 5 concrete objectives of collaborating with the government. If you’re tackling the most pressing problems of the nation or are interested in starting a business in this space, we want to hear from you. Reach out at diana [at] eclipse [dot] vc.Follow Eclipse on LinkedIn for the latest on the Industrial Evolution.