When thinking startups, cooperating with the government may not be the first thing that comes to your mind!
And as governments are often perceived as slow, heavy and difficult to deal with, it’s not an obvious choice either. Picking the right time to engage the government matters. Having gone through the previous steps of building a credible board of advisors and being able to demo your product or service will greatly help build confidence when seeking the government’s assistance.
Engaging with government is easier today than ever before. In comparison to the past, startups and governments now form powerful partnerships and have an equal interest in making those partnerships work. With globally failing economies, startups represent an unique model for building a future generation of entrepreneurs, and with them, help re-build economies from the ground up. Billions of dollars are being poured into startup initiatives all over the world and most governments are supportive of them. Just to name a few:
- UP Global Partnership between Startup Weekend and Startup America
- Startup Chile
- Digital Agenda for Europe
- Various government initiatives in Singapore, see Spring, EnterpriseOne and Infocomm for details
Government now represents a powerful startup building block and should be seen as a strategic long-term partner. This partnership grows over time and has many facets, such as:
- helping with both local and global introductions (business development, deal making etc.)
- becoming a customer of the product or service you’re building
- assisting with specific challenges in research & development (R&D) – both financially as well as strategically
- supporting in relocation / attracting talent and pulling capital into the country
- co-investing with other angel investors or VC’s
- becoming one more voice in communicating your venture’s achievements that benefit the country, its economy and the startup environment in general – locally and globally
Therefore, to think of the government only as an investor or as a source for grants would be a fundamental mistake. But to form an even deeper relationship that engages the government on several levels, it is crucial to have a clear strategic plan outlined of where the journey is going.
Again – timing matters, so be mindful when you try to access these resources. I made several mistakes by not realizing who can approve what and pitching the wrong people at the wrong time: Just before an election for instance, everybody wants to please everybody but nobody truly knows the outcome of the election: Which policies will make it? And which will eventually stick around long enough to actually make sense for your venture?
Seeking the help of a more experienced entrepreneur who has successfully worked with the government before is a great opportunity to know beforehand the many pitfalls that can exist in the process of engagement. In fact, this is probably essential to avoid (sometimes just technical) mistakes that would otherwise kill the partnership before it even started.
On a general note, government is mostly interested in these aspects:
- Employement: if you employ (more) people, great.
- Talent: if you can attract talent (of which there is a shortage in your country), great.
- Investment: if you can attract overseas investors to invest in your venture, also good.
- Intellectual Property (IP): if you have patents, other forms of IP or this is going to be created by your product/service and it will be owned by the company in the country
- Success: any success story that sells well
Along these lines you’ll naturally have to engage with different departments of the government from immigration to local chambers of commerce and so on. In New Zealand for instance you could contact Callaghan Innovations for R&D grants, NZTE to get access to overseas markets and contacts, your local city’s economic development board (i.e. ATEED or Grow Wellington) and if you want to sell something to the government directly, the DIA (Department of Internal Affairs) to get access to GETS.
Note: There is no reason to engage only one government. International Teams shoud leverage their local connections and make the most out of it. So if you have local subsidiaries or a globally distributed team, use this to your advantage and engage multiple governments at the same time to see where you can generate the best interest and where there is the best fit.
When dealing with government, it’s still you that needs to do the heavy lifting – so always plan for a longer timeframe than expected to get something approved – I have already underestimated this twice. But considering the opportunities at hand today for startups to cooperate with the government and despite the effort that needs to go in to make it work – it’s definitely worth your best efforts.