I think this is a great way to find startup ideas. There's a lot of expensive and awful software that needs to be replaced with modern websites and mobile apps. The other day I was reading through this huge thread about IT people who hate IBM's WebSphere product with a passion [1]. (Excuse the explicit language.) I guess this is the enterprise / government world. And it's not just IT, there are underserved government workers, insurance agents, accountants, etc. working with outdated and terrible software. Patching things together with spreadsheets, or pens and paper.
I posted this the other day, but it's also relevant here. From @patio11: [2]
> Here's an exercise you can do: do you understand what a life insurance agent does all day every day? Make it your mission for a week to do so, well enough to explain it to a close friend who has no access to your sources. All you have to do to learn this is read and make conversations happen. (People are happy to talk to you!)
Go and talk to real people and solve real problems!
P.S. Congrats to the Seneca team on the launch!
[1] https://www.reddit.com/r/programming/comments/7zb7jt/ibm_jav...
[2] https://www.indiehackers.com/forum/im-patio11-patrick-mckenz...
If you have a convoluted and slow purchasing process that favors existing vendors you are going to have problems. If you have that type of process and can't spend very much money up front, you are going to have worse problems.
Government, at all levels, has the second problem. This selects for large vendors (they can handle cash flow irregularities, have many low cost staff, have existing relationships and are on VoR lists/can easily pass credit/reference checks) and low quality. Price is especially key - bad software can be superficially cheap but "unexpectedly" need lots of consulting work or change requests. New high quality software is typically delivered by a firm that can't take advantage of post hoc consulting and change request revenue.
One easy way to block a startup with dropbox like pricing and market approach - privacy/security requirements. Make a state/federal law or regulation requiring all software touching citizen personal data be certified as safe. To ensure less waste and data security all software of any price must be provided by a firm on the VoR list. Purely for privacy and integrity purposes, of course!
When a government agency with minimal budget is the entire market, you face incredible hurdles to succeed that have nothing to do with product market fit. There's a reason why Uber and AirBnB broke laws & regulations and why government clients outside of defence & intelligence are typically the last targeted by a generalist software firm.
In addition, the strategy you've outlined is the one nearly every incumbent in every enterprise space has leaned on to protect themselves from disruption, but it only works for so long (as we've seen time and time again). I also think people overestimate the ability of large companies to quickly adapt their offering—the machinery of enormous sales, marketing, and product organizations can't turn on a dime.
Then after spending years building this software, the incumbent opens up their war chest, hires a small dev team, does a gradual refactoring, and has sudden parity in performance/design as you do.
People underestimate that many of these products are exactly where they need to be: functional enough to attract and retain customers and able to compete when absolutely necessary.
From my experience, Zendesk is a private sector-oriented customer relationship platform with communications at its core. The relationship between local government and their constituents doesn't look like the private sector relationship between customer service department and customer (though this comparison is frequently made). A customer service rep needs to answer, respond, and pass along... But in government, a worker has to actually get the work done.
The relationship between government and constituent isn't a sales relationship, it is a services one, and it's in the service request management area that workers are really suffering. The communication is only important insofar as it becomes a unit of work for the government to deliver on... A pothole, for example, or a streetlight issue. They struggle with geolocation and the need for mapping, the ability to visualize community issue trends and seeing them as they happen rather than when the shoe falls, FOIA requests, and more. These things are highly specific to government, and not really addressable by a generic private sector solution no matter how customizable.
As a result, in Romulus managing the constituent communications is only the first piece of the puzzle. In my opinion, the real value Seneca provides is in the service request management, which takes the communication and tracks the unit of work that comes from it internally, as well as providing the ability to communicate the progress externally as Zendesk does.
This reminds me of some threads about the difference between Slack and IRC. Could one be dramatically retrofitted to accomplish what the other does? Sure, but it wouldn't do it well, and people aren't looking for it to do that.
In my experience cities have just as many procurement problems as state/federal but with far less money to spend. You may have success with a Dropbox/Hootsuite approach of selling to non-traditional users under certain price limits. It just makes it so much harder when it's your only market.
As to plentiful discretionary funds... everyone's definition of this is different. Another challenge I've faced with local governments is that their speed to spend is similar to state & feds. Smaller sales with a sales velocity the same as if not slower than the feds is another challenge.
But if you've got people to make fast decisions and spend enough so that the unit economics makes sense you have my heartiest congratulations.
But still it is no accident that ncd's analysis works at the local government level: there are tens of thousands of those governments so variation means there will be some viable customers around.