Earlier this year the New York Times did a piece on small
businesses and their voice in government. The article confirms our
experience within the renewable technology sector. High-energy start-ups
successfully raise impact capital and ready themselves for manufacturing and
deployment. However, some are left stunned when a competitor receives a grant
that catapults a project to market advantage. Privately, effective
CEO's wonder how a company got that tax credit, grant, loan guarantee, favorable
regulation, or exemption.
Regulatory and legislative business drivers whether grant funding, bonds, or direct incentives are complex, slow-moving freight trains. These programs can move markets like mountains, or conversely, grind an industry player to a halt. When they move an industry, they hit hard and plow through anything in their way.
Here's the best perspective: there are those that are on the train, and those that are off. If your company is not working a decisive strategy for business advantage through government, you and your company are off the train. It may be a frustrating, unrecognizable, grey area in your business, but you must start your journey and recognize that it's a part of business - and being on the train sooner, is better than later. Call it a necessary evil if you must, but don't get left behind. Engaging with Government in the early stages of your technology can have multiple returns on your bottom line for years to come.
So where do you start? First, get a good consultant that can help you devise or determine the need for a near and long term strategy. Next, understand that the government is not granting favors. The government has a unique responsibility to enable innovation and technology in the public interest, and it is an investor. Treat it like one. Show the government what benefit you bring, what the return on investment is, not just why you need assistance.
Get familiar with the political undercurrents that affect your business. The United States Congress has a long tradition of supporting innovation, technology and businesses through its power in the Commerce Clause. But what is in the "public interest" undoubtedly, changes over time. Currently, the public interests hangs on a two pronged bandwagon: 1. economic growth and 2. job creation. Learn how to merge your business case and the benefits that you bring to a region and its people with either, or both, of these interests. If you can't find an angle to hang your hat on when you show the government what benefit you bring to the table, look for secondary angles through strategic business partners, investors, and customers.
Swaying Government's interests, is often a matter of focusing the dialogue to include factors that matter to the Government, even if you are leaving out significant aspects of your business relevant to revenue generation.
For example, a pre-revenue company with innovative technology is making renewable chemicals at pilot scale with a small number of employees. Sales are generated, but tax revenue is minimal and job creation in the next 6-8 months is negligible. At first blush the government may not think it has much interest in supporting the business or industry.
The company, however, has feedback from a large US fragrance formulator. In sales meetings, the partner reveals that retail outlets like WalMart are 'self regulating' for greater chemical safety in the absence of federal legislation. Retail customers want alternatives. The customer is willing to provide a Letter of Interest (LOI) to buy a significant amount if testing goes well, and the chemicals are produced at commercial scale in reliable quantity. To a business person this smacks of uncertainty based on anecdotal evidence. Even with an LOI the deal could easily disolve at the round of testing. Furthermore, this kind of information is not a core driver of the business; it will not finance a manufacturing plant.
But it might. Government is long term, sees growth through partnership and collaboration, is concerned with constituent transactions, and oriented toward long-term tax revenue. This small part of your business story, what you consider anecdotal customer feedback from a few sales meetings could be what tips the scales in your favor or at least hits the target soundly in this round. Something you may be ignoring or even downplaying to the board and partners could be your key into a valuable relationship with government.
What a Government representative hears: "A company employing constituents is preparing to transact commerce and increase sales tax revenue with a customer who will then sell or distribute to Wallmart. This company has potential to grow leaps and bounds in revenue generation increasing corporate federal and state tax. Employees will be needed at scale up, and operation expantion is likely. If I do somehing now, it will lay the foundation for job creation, R&D, real estate, construction, IT and retail in the future. On the other hand, it sounds like growth in this fledgling company (or industry) is likely only if the health conscious constituents keep up the pressure. The X Lobby is trying to keep alternatives to chemicals in fragrances off the market or any regulations across the board, but my constituents are very concerned with health issues. And especially chemical production. We had that chemical release last month. Even though it was within the permit-required allowance, the local paper put it on the front page. I'm a former Dr. so health is a large part of my platform, wow, this company is right in my wheelhouse. Now, what is it that they wanted me to do?"
A few last words. Now that you have peaked optimal interest, there’s a caveat. Don’t let your business be swayed by the opportunity of government funding. Technology solutions should not be determined by government. Our scientists, innovators, market analysts, entreprenuers and investors determine what technology goes to market at what time.
If you have well founded reason to believe that your technology is where it’s at, but the government is funding other types, don’t be swayed. Stick to your guns and do what the US does best – let the market sort it out. At the same time, devise a tandem government relations strategy that pushes your business through market barriers and expedites solutions to regulatory challenges. A savvy government relations consultant or industry association representative can lift these gemstone stories out of your business and propose a business case that specifically peak's a government official or an agency's interest. This is what gets your company or project to a better bottom line.