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What have been your biggest challenges in achieving success as a newcomer to the federal market?
Initially, having past performance with enterprise customers only was viewed as an obstacle. Digital Hands has a successful 13 year track record in that space with leading technology manufacturers and large enterprise customers. Unfortunately, commercial past performance is not always accepted in the federal procurement process. Additionally, the business development learning curve is very steep as it has no resemblance to that in the private sector. Knowing the ropes to skip and the ropes to know continues to be a learning process and hiring professional consultants as guides has made the journey easier.
What is the biggest barrier for any IT services company in entering the federal market?
Simply, it takes a long time to get a return on investment. If a company is looking to get a one year return in the federal market, the company should give it up. A realistic timeframe for breakeven can be three years. Entering this market is not for those wanting immediate gratification. Strong cash flow to support the development is a requirement as is a tolerance for ambiguity. You have to be in this for the long run.
What do you wish you knew when you entered federal contracting that would have saved you time and money? What advice can you pass onto others entering the government market?
We wasted a lot of time trying to understand contract vehicles and getting on contract vehicles that we now view as unimportant to our success. We misunderstood the value of submitting responses to RFI’s. We also followed well-meaning advice to search for published federal opportunities and respond to every request that matched our competencies, including RFP’s. We now understand that, for what we offer, Digital Hands needs to be involved much earlier-- in the pre-RFP process.
The lessons learned along the way that I would pass on to others:
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3. Research and understand how your product or service gets purchased. If you are leading edge or have a new business model, you aren’t going to find opportunities that fit your model in the normal RFP process. You have to create the demand proactively (which is a longer process) with the agencies rather than searching in established publications for opportunities. In many cases, prime contractors that are interested in the same business objectives as your firm, can be great allies.
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