Adie Holt explored the complexities of working with government and SME clients, offering practical advice for navigating long sales cycles, building strategic relationships, and overcoming procurement challenges in the Cyber Runway: Scale accelerator.

Navigating the complex world of government and SME procurement can be daunting for any startup. Adie Holt shared insights during a recent Cyber Runway: Scale session provided by the Department for Science, Innovation & Technology and hosted by Plexal, where I attended on behalf of Cyber Tzar, the Enterprise Supply Chain Risk Management platform. Adie’s insights on effectively acquiring customers in these sectors, overcoming vendor lock-in, and building realistic pilots offered invaluable advice for startups looking to make a lasting impact in the government and SME markets.

Contents

The Intersection of Government, SME, and Customer Acquisition and Pilots with Adie Holt

This video is publicly available on the Plexal YouTube playlist for the Cyber Runway programme.

Key Insights and Findings

Here are the key insights and advice from the Cyber Runway Scale session “Intersection of Government, SME, and Customer Acquisition and Pilots with Adie Holt“. These insights emphasize the complexity of navigating defence and security markets, the importance of strategic relationships, and the need for careful planning and realistic trials when pursuing government contracts.

Challenges in Defence and Security Markets

• Defence and security procurement is notoriously slow and complex. Engaging with government sectors requires patience and a clear understanding that sales cycles can last 18 months or more.
• Many defence and security projects are outsourced through larger primes (i.e., Tier 1 contractors), so direct sales to the government are rare, especially for smaller suppliers like SMEs.

Customer Understanding

• Businesses must deeply understand who their real customers are within defence and security organizations. It is easy to misidentify a high-ranking official or a speaker at a conference as the decision-maker when, in reality, purchasing decisions are often made at lower operational levels or outsourced to primes.
• The key is to differentiate between the enthusiastic non-buyers and the actual decision-makers with budget authority.

Importance of Strategic Relationships

• Success in defence procurement is often driven by relationships and networking. Building trust with key stakeholders, including decision-makers and users of the technology, is crucial for advancing sales efforts.
• Attending events and conferences is valuable, but it’s essential to focus on connecting with the right people who have the power to move your product or service forward.

Overcoming Vendor Lock-in and Legacy Issues

• Large defence and security organizations are often tied into long-term contracts with existing vendors, making it difficult to introduce new technologies.
• Understanding the timeline for contract renewals is crucial for determining when it’s worth pursuing a potential customer and when it’s better to wait.

Pilots and Trials Must Be Realistic

• When running pilots or trials with defence or security clients, it is important to simulate real operational environments. Trials should aim to demonstrate how the solution will integrate seamlessly into existing operations to minimize obstacles during procurement.
• Companies should avoid developing “lab-based” solutions that don’t reflect the real complexities of defence environments. Realism in trials helps ensure quicker adoption post-trial.

Small Bets Approach for Uncertainty

• A practical approach in this space involves making “small bets.” These could include testing the market through conversations, attending a conference, or engaging with potential customers on a small scale before making significant investments.
• This approach allows for learning and iterating without overcommitting resources before confirming a product’s fit for a specific market segment or project.

Social Value in Defence Procurement

• Social value (e.g., local job creation, community benefits) is increasingly important in government tenders. However, SMEs are often at a disadvantage compared to larger companies when it comes to demonstrating impact at scale.
• Smaller businesses should focus on metrics that highlight their growth, job creation, and contributions to the local economy.

Navigating Defence Sales Development

• Traditional sales techniques such as using sales development representatives (SDRs) may not work effectively in the defence sector, where relationship-based sales are more impactful. SDRs may fill up pipelines with leads, but converting them into sales requires established trust and understanding of the procurement processes.
• A better alternative is expanding the sales team or network to include people with existing relationships and credibility in defence.

Documentation for Delivery Assurance

• To ensure successful integration of a product into defence, companies should maintain detailed delivery assurance documents (DADs). These documents track every step of the process, including the individuals responsible for each aspect of deployment and integration.
• Clear documentation and accountability help prevent project stalls and increase the likelihood of conversion after initial trials.

Leveraging Partnerships:

• Partnerships with larger primes or more established companies can help SMEs navigate defence procurement. While many SMEs fear being overshadowed or taken advantage of, properly structured minority partnerships can create opportunities without the risk of being subsumed by a larger organization.

Using Trust-Based Networks:

• Developing and leveraging a network of trusted intermediaries is a highly effective way to get introductions to the right buyers. These introductions are more likely to result in meaningful engagements than cold outreach.

Conclusion

Selling into government and SME sectors requires patience, relationship-building, and a deep understanding of procurement cycles. By following Adie Holt’s advice, startups can better position themselves for success, reducing customer friction and delivering real value through carefully structured pilots and trials.