24 takeaways (so far) from the 2017 B2G SaaS Global Survey
The survey is still underway but we already have a meaningful enough sampling of responses and are sharing our preliminary takeaways. Feel free to comment or make suggestions.
- 2/3rds of respondents started with their hometown (or home state) as a first customer.
- Government customers are targeted primarily based on public expressions of interest in the problem area or in innovation in general.
- 75% of respondents self funded and/or raised money from friends and family before raising venture funding.
- 1/3rd of respondents sell to consumers and/or businesses as well as governments.
- Firms selling only to government were more likely to raise venture funding.
- Other forms of funding include grants, debt and competitions/awards. (No ICOs (yet))
- The most popular sales model is to target discretionary budget spending. This is more popular amongst earlier teams. (You can find budget levels at http://openprocure.us/)
- A quarter to a third of companies also sell via Collaborative Development/Fee Sharing, Subcontractors/Partnerships and/or Private / Non-Profit Funded Projects.
- Very few companies (less than 1 in 10) have a freemium offering.
- The majority of respondents use multiple strategies, but there are a few that focus on just one target Competitive Procurement (RFPs).
- There is a concentration of focus on medium and large cities. Very few are focused on Small Cities, Federal Governments and Special Districts.
- Average "Average Annual Contract Value" are roughly $35k, and range from as low as $5k to as high as $100k.
- From 2015 to 2016, the majority experienced a moderate growth of 30%. A few grew revenue 5-6x.
- Most expect similar or slower growth for 2017.
- Contract terms are 2 years on average.
- The sales cycle for almost half of respondents were 90 days or less . But if strategies included “competitive procurement”, this number averaged much higher at 270 days. The latter cohort tends to have larger contract values ($56k average for “RFP” focused companies vs $16k average for “discretionary budget” focused companies) and higher gross sales (in the 7- and 8- digit millions for “RFP” focused companies).
- Delays in receiving payments range from 2 weeks to 2 months on average.
- Almost all have some component of service contributing to revenue, even if service itself is not an offering. This suggests that value added service is the rule and not the exception for B2G sales.
- Only an average of 3% of growth was from upsells to existing customers.
- Average marketing spend per $1 of revenue by stage:
Stage (revenue in 2016)
Pre-seed ($10k - $100k) — 0.1018
Seed ($100k - $3M) — 0.0694
A ($3M - $10M) — 0.005
Teams and Tech
- On average, almost a quarter of staff are dedicated to sales.
- Head count per $100k of revenue by stage:
Stage (revenue in 2016)
Pre-seed ($10k - $100k) — 9.4
Seed ($100k - $3M) — 3.25
A ($3M - $10M) — 1
- Salesforce / Salesforce IQ are the predominantly used CRM platforms. Other platforms used include: ProsperWorks, Pipedrive, Hubspot, InsightSquared, Insightly, Indinero and Marketo
- Product offerings include the following technologies: web, mobile, crowd-sourcing, machine learning, IoT, block-chain, biotech, and quantum computing.