Importance of B2G model

Most people are very familiar with two business models B2B or B2C. According to them, your business has to fall into either buckets only. If you mention a lesser known model like B2G, you are laughed at.

So what is B2G model?

From the definition at >Techopedia, Business-to-government (B2G) is a business model that refers to businesses selling products, services or information to governments or government agencies. B2G networks or models provide a way for businesses to bid on government projects or products that governments might purchase or need for their organizations”

The Karnataka state government had recently organized a competition for startups called Elevate 100. The ‘Idea2POC’ challenge, ideally expects an idea to be pitched and based on certain criteria used for judgement, qualifies a startup to win government grants. Since it was a grant based competition, I was taken aback by the ‘Shark Tank’ styled VC round questioning “How will you return our money back?” In the second month, it was hard to chunk up numbers with realistic revenue estimates unless I quoted some imaginary numbers which I was strictly against. So I told them that I had a solution that would benefit the government via citizen services and I was trying to explore the B2G model. They just laughed it off.

So why does B2G model all over the world evoke such a response?

The general perception about B2G models is:

* Government agencies are difficult to work with than private sector
* Government takes more time to approve projects
* Lots of hurdles and too much of paperwork
* It is challenging for startups competing with bigger companies in this space, even if they have better solutions
* Applications for bidding, require business running for at least 3 years

Unfortunately, most of the above is not just a perception, but the truth. New age startups that are less motivated from monetary gains but more motivated to solving social challenges in the country, face an uphill task in the B2G sector.

Here is one startup sharing their positive experience with the B2G model in the US.

After all, it could very well be a win-win for both the startup as well as the government.

The State and Central Government are encouraging startups with various schemes and grants. But if we want to build a stronger and smarter India, the Government needs to go beyond that. They need to open the playground to innovative startups, adopt newer solutions and reduce the bureaucratic hurdles faced in this space.

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