Your credibility

Can you prove you know what you are doing?

  1. The government’s risk aversion: The government is highly risk averse, and a new vendor is riskier than the company that has been providing products and services to them for years. And this is a huge barrier for new businesses
  2. The government worries that new businesses:
    1. Don’t know what they are doing (they can’t deliver the promised product or service)
    2. Can’t manage their work
    3. Can’t comply with the government’s regulations
  3. New businesses don’t have track record: New businesses don’t have:
    1. Successful projects and contracts that demonstrate that they know what they are doing
    2. Happy customers to reference
  4. Validating your credibility: Since your company doesn’t have reference-able work experience you will have to leverage your, and your cofounders experiences, and other validators that you know what you are doing

Things that build your credibility

  • Past performance: Projects that you have done at other jobs, preferably jobs where:
    • The work was similar
    • The customer was similar
    • The size and complexity was similar
    • You had a leadership role
  • Corporate certifications: Any relevant certificates your company has (e.g. ISO 9001, or an approved accounting system). Typically, new businesses don’t have these but if you do it’s great.
  • Employee certifications: Any validators that you and your employees know what they are doing:
    • Years of professional experience
    • Relevant degrees
    • Relevant certifications

If you aren’t credible you probably shouldn’t start that business

  • This is “Table Stakes:” Most customers and partners won’t work with you if you don’t check some of these credibility boxes:
    • If you don’t deliver the customer wont be able to complete their mission
    • If you don’t deliver the prime will look bad in front of their customer
    • There are lots of other companies out there that are credible
  • Your Initial Primary Offering: When selecting your IPO prioritize products and services where you have the strongest credibility. Remember:
    • You can add other products and services later
    • Your first three contracts are the hardest to win
    • Once you have momentum, relationships and staff thanks to you initial wins everything else becomes easier

What to do

  • Look at your list of options: Look at each of the options you identified in the last exercise. There may be products and services on your list that you did once, or that were a small part of your professional background. Even if you really enjoyed those projects or want your company to provide them we strongly recommend putting those options on the shelf for now
  • Create copies: Open your workbook, go to the page on credibility, and create a copy for each of the options where you have at least some credibility
  • List your credibility factors: List any projects, degrees, and certifications that you have related to the product or service you are considering.
  • Down select: Review your options and we recommend choosing the three where you have the most credibility
  • What happens next: We are going to evaluate your high credibility options to explore:
    • The federal market for each
    • How you can differentiate yourself from the competition
    • Select the best one to be your IPO


Video Transcript(s):

Government buyers and prime contractors are risk averse, and as a new company they’ll assume that working with you introduces risk.  So we need to convince them that you’re ready to deliver, and the best way to do that is by demonstrating that you’ve successfully done similar work in the past, which is known as past performance. 

So open your workbook to the credibility page, and make a copy per option you're still considering, so if five options looked promising after the market analysis then you’ll need five copies.

At the top of each page, write down one of the options, and in the body of each page write down all the relevant projects you’ve done.

There’s no hard rule for how much past performance you need but government RFPs frequently ask for three. So if you have three strong past performances that should be enough to convince most prospective partners and customers that you can deliver.

Next, list any relevant degrees & certifications that you’ve earned.

Do this analysis for each option and then consider the strength of each

And when we say strength, think about it this way. You need to convince prospective partners and government agencies that you can deliver, so ask yourself whether the projects you’ve listed would make you feel comfortable if you were the customer. 

Once you’re done, compare the options and remove any where your past performance is light. 

And next let's think about your value proposition.