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The government as launching customer, a great opportunity for companies (by Rutger Steens)

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Let’s discuss the boundary conditions to innovate successfully based on some cases in Flanders and the Netherlands. Most governments are taking about half of their gross national product for their account. They can be better off by being open to innovation in the public purchase process and act as a launching customer for their industry and start-ups.

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The government as launching customer, a great opportunity for companies (by Rutger Steens)

  1. 1. 4.3 The government as launching customer: a great opportunity for companies 1 CONFIDENTIALCONFIDENTIAL THE GOVERNMENT AS A LAUNCHING CUSTOMER: A GREAT OPPORTUNITY FOR COMPANIES Rutger Steens Innovation Consultant Rutger.steens@verhaert.com TRACK 4 MyFutureGovernment
  2. 2. 4.3 The government as launching customer: a great opportunity for companies 2 CONFIDENTIAL 1969 YEARS PIONEERING INNOVATION 20191969
  3. 3. 4.3 The government as launching customer: a great opportunity for companies 3 CONFIDENTIAL 20191999 1999 B É T A
  4. 4. 4.3 The government as launching customer: a great opportunity for companies 4 CONFIDENTIAL 20191999 1999
  5. 5. 4.3 The government as launching customer: a great opportunity for companies 5 CONFIDENTIAL 1999 2019 DIGITAL NETWORK MODELS Digital channels activities resources
  6. 6. 4.3 The government as launching customer: a great opportunity for companies 6 CONFIDENTIAL 1999 2019 SMART CITY CHALLENGES 77% 63% Imec Smart City Meter 2019 Mobility Livability
  7. 7. 4.3 The government as launching customer: a great opportunity for companies 7 CONFIDENTIAL 1999 2019 GovernmentBusiness “SERVING A CITY”
  8. 8. 4.3 The government as launching customer: a great opportunity for companies 8 CONFIDENTIAL 1999 2019 Consumers “SERVING CONSUMERS” Business C
  9. 9. 4.3 The government as launching customer: a great opportunity for companies 9 CONFIDENTIAL 1999 2019 EXCITING EXPLOSION OF B2C Endangering usage Public nuisance
  10. 10. 4.3 The government as launching customer: a great opportunity for companies 10 CONFIDENTIAL STILL USING ‘SINGULAR’ MODELS B2B B2C C2CTransaction / multisided platforms B2G 1999 2019
  11. 11. 4.3 The government as launching customer: a great opportunity for companies 11 CONFIDENTIAL NETWORK MODELS REACH FURTHER 1999 2019 B2X
  12. 12. 4.3 The government as launching customer: a great opportunity for companies 12 CONFIDENTIAL NETWORK MODELS REACH FURTHER 1999 2019 B2X
  13. 13. 4.3 The government as launching customer: a great opportunity for companies 13 CONFIDENTIAL NETWORK MODELS REACH FURTHER 1999 2019 B2X2CB2X
  14. 14. 4.3 The government as launching customer: a great opportunity for companies 14 CONFIDENTIAL Discovering a network model THEY GO BEYOND YOUR CUSTOMER B2B B2C
  15. 15. 4.3 The government as launching customer: a great opportunity for companies 15 CONFIDENTIAL Discovering a network model B2B B2C CREATING AN ADDITIONAL RELATIONSHIP
  16. 16. 4.3 The government as launching customer: a great opportunity for companies 16 CONFIDENTIAL Discovering a network model B B C2 2 A ‘HIGH END’ MALL AS EXAMPLE M2
  17. 17. 4.3 The government as launching customer: a great opportunity for companies 17 CONFIDENTIAL Discovering a network model CONSUMERS HAVE A RELATION WITH THE MALL = B2B2C M2
  18. 18. 4.3 The government as launching customer: a great opportunity for companies 18 CONFIDENTIAL Discovering a network model A B2B2C EXAMPLE
  19. 19. 4.3 The government as launching customer: a great opportunity for companies 19 CONFIDENTIAL Discovering a network model 1 st B2B2C/NETWORK MODELS HAVE B2B CHARACTERISTICS LAUNCHING CUSTOMER Customer Who is willing to help you through the last steps and promote your business
  20. 20. 4.3 The government as launching customer: a great opportunity for companies 20 CONFIDENTIAL The launching customer 2015 THE 1st WHO HELPS YOU SCALE
  21. 21. 4.3 The government as launching customer: a great opportunity for companies 21 CONFIDENTIAL The government as launching customer B2B B2C B2C HAS A SIMILAR PURPOSE
  22. 22. 4.3 The government as launching customer: a great opportunity for companies 22 CONFIDENTIAL The government as launching customer B2G G2C B2C HAS A SIMILAR PURPOSE CITIZENS
  23. 23. 4.3 The government as launching customer: a great opportunity for companies 23 CONFIDENTIAL The government as launching customer A SUCCESFULL CASE FROM THE NETHERLANDS
  24. 24. 4.3 The government as launching customer: a great opportunity for companies 24 CONFIDENTIAL Endangering usagePublic nuisance The government as launching customer Achievable? Desirable? Useful? Permissible?Helpful? FACES A LOT OF ADDITIONAL CHALLENGES USERS NON-USERS Bouwen aan morgen, 2019, D.Robberecht, S.Smet
  25. 25. 4.3 The government as launching customer: a great opportunity for companies 25 CONFIDENTIAL The launching customer characteristics A ‘LEAD USER’ THE “CREATIVE” CUSTOMER PROMOTES YOUR BUSINESS REQUIREMENTS FOR SCALE Lead Users No commercial solutions available # people in need of a new solution Early Adopters Early Majority Late Majority Laggards Inflated expectations E. Von Hippel 1986
  26. 26. 4.3 The government as launching customer: a great opportunity for companies 26 CONFIDENTIAL Government & launching customer behavior RESEARCH EARLY STAGE TRANSITION GROWTH STAGE Research Seed Series A Series B, C, D Fundamental research Line up evidence De-risk Have machinery for growth IN A START-UP RUNWAY A working proposition Bouwen aan morgen, D.Robberecht, S.Smet Angular Ventures
  27. 27. 4.3 The government as launching customer: a great opportunity for companies 27 CONFIDENTIAL Government & launching customer behavior RESEARCH EARLY STAGE TRANSITION GROWTH STAGE 66,2 % 53,0 % 33,7 % 20,1% Riskof Failure Government VC Firms Growth VC Firms VCs TRY TO REDUCE RISK Bouwen aan morgen, D.Robberecht, S.Smet M. Mazzucato, 2018
  28. 28. 4.3 The government as launching customer: a great opportunity for companies 28 CONFIDENTIAL Growth FirmsGovernment VC Firms Government & launching customer behavior RESEARCH EARLY STAGE TRANSITION GROWTH STAGE 66,2 % 20,1% Riskof Failure LAUNCHING CUSTOMER SERIES B LAUNCHING CUSTOMERS TAKE LOWER RISKS
  29. 29. 4.3 The government as launching customer: a great opportunity for companies 29 CONFIDENTIAL Conditions for a government as launching customer ‘Serving a City’ does not mean selling a product to the government anymore APPROACH GOV AS YOU WOULD A VC
  30. 30. 4.3 The government as launching customer: a great opportunity for companies 30 CONFIDENTIAL Conditions for a government as launching customer APPROACH WITH A BUSINESS MODEL Desirability Network effects Usability Scalability Revenue Sources In cooperation with A. Rampell
  31. 31. 4.3 The government as launching customer: a great opportunity for companies 31 CONFIDENTIAL Conditions for a government as launching customer APPROACH A BUSINESS MODEL AS A VC WOULD DO Entrepreneurship INNOVATION I – CAPACITY E – CAPACITY Innovation Bouwen aan morgen, 2019, D.Robberecht, S.Smet
  32. 32. 4.3 The government as launching customer: a great opportunity for companies 32 CONFIDENTIAL Conditions for a government as launching customer I&E - DIGITAL POLICIES Integration ease, streamlined access, insights as a foundation – E-Stonia (EE) I - REGULATORY PLAYFUL Balance flexibility and clarity to propel innovation initiatives – Financial Conduct Authority (UK) I - DESIGN THE FOUNDATION Invest to help citizen / customer centric research and conceptualization – PIO (BE) E - REDEFINE REQUIREMENTS Redefine requirements so procurement focuses on outcomes and goals instead of history and approach – Defense Innovation Unit (US) E - RAPID PROCUREMENT Facilitate the uptake of new ideas on a startup inspired timeline – Navy (US) I - USE OTAs (Other Transaction Authorities) Go external to fast and flexibly contract or buy technology to test prototype technology – Multitude of states (US) HELP THEM THINK OF YOUR OWN CITIZENS MIT Innovation Initiative, McKinsey, Verhaert New Products & Services
  33. 33. 4.3 The government as launching customer: a great opportunity for companies 33 CONFIDENTIAL In conclusion A B2G2C APPROACH TARGETS THE GOVERNMENT AS A LAUNCHING CUSTOMER
  34. 34. 4.3 The government as launching customer: a great opportunity for companies 34 CONFIDENTIAL In conclusion ACTIVILY ADDRESSING CHALLENGES IN COMPLEX CITY NETWORKS BY TAKING A VC INSPIRED APPROACH IN THE GROWTH STAGE A ‘LEAD USER’ THE “CREATIVE” CUSTOMER PROMOTES YOUR BUSINESS REQUIREMENTS FOR SCALE
  35. 35. 4.3 The government as launching customer: a great opportunity for companies 35 CONFIDENTIAL One group, five brands Our services are marketed through 5 brands each addressing specific missions in product development. INTEGRATED PRODUCT DEVELOPMENT ON-SITE PRODUCT DEVELOPMENT DIGITAL PRODUCT DEVELOPMENT OPTICAL PRODUCT DEVELOPMENT
  36. 36. 4.3 The government as launching customer: a great opportunity for companies 36 CONFIDENTIAL THE LAUNCHING CUSTOMER CHARACTERISTICS A ‘LEAD USER’ THE “CREATIVE” CUSTOMER PROMOTES YOUR BUSINESS REQUIREMENTS FOR SCALE Lead Users No commercial solutions available Plateau of productivity Peak of inflated expectations # people in need of a new solution Visibility of expectations Early Adopters Early Majority Late Majority Laggards

Let’s discuss the boundary conditions to innovate successfully based on some cases in Flanders and the Netherlands. Most governments are taking about half of their gross national product for their account. They can be better off by being open to innovation in the public purchase process and act as a launching customer for their industry and start-ups.

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