Policymakers love tech startups - but are they buying from the innovators?

Policymakers are keen to talk up the potential of the UK, but when it comes to handing out contracts for IT projects how good is government at connecting (and doing business) with early-technology businesses?

When I try contacting Alexander de Carvalho for the first time, the call doesn't go through. Mysteriously, however, my number shows up on his phone and he when he sees it, he rings me back. "We're based in Whitehall beside the Ministry of Defence building. It may be that the signal was disrupted in some way," he suggests.

Close proximity to the MOD may or may not be unhelpful when it comes to maintaining smooth mobile communications, but otherwise, it's not a bad location for a business - Public -  that aims to connect digital startups with potential buyers in the public sector. Established in 2017 by de Carvalho and partner Daniel Korski, Public operates as an investment fund and a provider of accelerator services for young companies that have the potential to sell their products and services to government. And just to emphasise its public-sector focus, the company this year opened co-working space in the heart of Whitehall. If all goes according to plan, it will become a natural home for "govtech" innovators. 

But is the public sector an attractive market for relatively young companies that don't have the resources, credibility and marketing muscle of an IBM or Microsoft?  On the face of it, the answer to that question should be yes. For one thing, the government is keen not only to talk up the sector but also to provide financial support. Witness Theresa May's attendance at this year's London Tech Week, accompanied by a pledge to invest £153 million in quantum computing.

Meanwhile, public sector bodies at national and local level are keen to cut costs while also, if possible, improving services to taxpayers. James Hirst is co-founder of Tyk, a company that has built APIs that allow Britain's courts to take traffic offence pleas online. As he sees it, there is clear demand on the part of policymakers to seek out technologies that can help deliver on that policy imperative. "Our interactions with the public sector suggest that government is looking for faster, more efficient and holistic ways to engage with the public," he says.

But selling to public sector bodies isn't necessarily straightforward, not least because there are a lot of them, all with their own policy objectives and buying processes. So how does a startup establish where the demand is? Even when you narrow it down to one segment of government such as healthcare, there are hundreds of trusts and agencies making buying decisions.

And pinpointing potential customers isn't the only problem. Mikkel Brun is co-founder of Tradeshift, a company that successfully won a contract to supply electronic invoicing solutions to SBS, an NHS shared service provider. To secure the deal, his company had to demonstrate compliance with NHS standards in areas such as data security. "It's a process that can be time-consuming. But if you make yourself available, you have to go through all the steps," says Brun.

And as James Hirst observes the compliance process can represent something of a leap in the dark. "When you're selling to a large organisation, you have to provide evidence that you can comply with their guidelines. And it's hard to know what you need before you start the process." 

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