A Conversation with Steve Ressler

Happy Friday, everyone. Welcome to In Case You Missed It, GovTech's weekly government technology news roundup, where we look at some of the biggest GovTech news from the past week and give you our thoughts on what it means. Again, I'm Joe Morris. I'm happy to be back after a quick paternity leave. Dustin Haisler is traveling today, but will be back with us next week. Today we're joined by a special guest, Steve Ressler. A GovTech veteran and serial entrepreneur. Welcome, Steve.

Hey, happy, happy Friday. Glad to have you back, Jim.

Thank you, sir. And again, thank you for joining us on In Case You Missed It. I thought before we kind of dove into all things GovTech, you could share a little bit with our audience your, your background as a serial entrepreneur in the GovTech market.

Awesome. So, um, yeah, actually I joke I was born to do this. So, uh, third-generation government employee on my dad's side. So my dad worked at the IRS and his, his dad in military and postal, and then a series of entrepreneurs on my mom's side. And so So I went to University of Pennsylvania for grad school on a Homeland Security scholarship, came to DC, worked at Homeland Security and Technology for 5 years, and eventually left and started a company, govloop.com, an online learning community for the government community. And so that company eventually got acquired by GovDelivery, which, you know, sends emails, text messages, digital communication for government, and was lucky enough to be an executive there before we eventually got acquired by Vista Private Equity and merged with Granicus, where I was an executive for a while. And then eventually left and was CEO of a small law enforcement software company called Callio, and that business grew, and we eventually sold to Motorola Solutions, where I spent a year at Motorola. And then also just love GovTech, so small advisor investor in, you know, probably a dozen GovTech companies, and so just big supporter of the ecosystem and honestly what you, you and Dustin are building with this show and GovTech.

I love how you casually just rattled off a bunch of GovTech 100 companies that you've been a part of. So that's pretty amazing. And now you're the co-founder at the Bryden Group. So maybe you could share a little bit about that new venture and why you're excited about it. It looks like you got some good digs there behind you too.

Yeah, we're swagged out. We got it on the emblem, the polo, and even the Yeti cup. So it's real. So the Bryden Group is an investment firm I launched with 2 partners recently, Alex Mears, who was formerly at Carlyle and did a lot of GovTech investing there, and George Dutille, both Navy SEALs, military veterans. And so what we do is we back— we're an investment firm backing entrepreneurs through acquisition, which is really a blend of startup entrepreneurship and private equity. So we back entrepreneurs who have an industry focus to go out, acquire small businesses in a sector, and then become the CEO and transform the business. And so we just launched in April, and our first initial cohort of 6 Entrepreneurs in Residence are starting mid-September.

So you could tell us a little bit more about that program and how it works.

Yeah, so what it works— we recruit mid-career searchers or entrepreneurs. So of our group, a number of them have been former executives, general managers of businesses, investors. And so we'll pay them a salary for 2 years where they go out and search to find a business to buy. And then when they find a business where there's a mutual fit, the small business owner wants to bring in new capital and new leadership, we'll do that together with them and make an investment, and we'll join the board and invest in the project. And we'll invest across industries and sectors, but we do love government and government software, so definitely an area that we'll do some focus on.

Yeah, so I was just gonna ask you, is, you know, are you looking at investing in the GovTech market and kind of, Is there any kind of preference to it or you're looking across all sectors equally?

Yeah. Well, I can't give up my favorite market, so we'll definitely do some GovTech investing. The beauty about GovTech too, if you're not— your listeners and you know, it's so big too. So people will say, that's everything from, for me, local government, K-12, special districts, state, federal, defense, national security. There's also the sector of folks that serve government, uh, vendors, think compliances. Uh, we also look for, uh, related, uh, sectors that think, you know, maybe there's a government and regulatory rule in the services around that. So, uh, we love all those sectors. So if there's folks, uh, interested in acquiring business in those sectors or businesses, uh, looking, uh, to transition, I would love to meet them.

So in past episodes, as you've mentioned and you've seen, we've talked about the record M&A activity that we've seen in GovTech. As someone who's, who's lived it, and you've mentioned at the very beginning, kind of your experiences at a variety of organizations. It'd be great to get your perspective on what you're seeing in the GovTech market today.

Yeah, so a very dynamic market, and what's been interesting for me is, you know, I'd say 10, 15 years ago, someone doing GovTech, either startups or even scale-ups on the private equity side, it was very limited of the folks that were interested in the market. And so what's so interesting the last 5 years is Folks have recognized that government's just a great market, and I think it's for a couple of things. So one, you know, government's a very sticky, reliable customer. They pay their bills on time, they stay consistent. If you do a good job for them, they will stay with you. And not only that, they'll refer you to friends. So if you're doing a great job for City of Cincinnati, maybe they'll tell their friend at Hamilton County or City of Columbus, which is unique as a sector. Other sectors— You know, if you sell to Hershey, they're not going to tell Nestlé to use this vendor. And so a lot of folks are interested in the market, and so you see a lot of capital coming in. And once capital comes in and people make investments, they often want to double down on investment. And that's why you see more and more companies that get an investment then start doing smaller acquisitions that they'll bring into fold to the entity.

So when you look at like things like, uh, right now, you have all of this federal money that's come into the state and local governments in the last 2 years, much of it's still to be spent. How much does that, like, that injection of funds, uh, add to the stability that you're seeing in the GovTech market?

Yeah, no, I mean, I think it's definitely, uh, I think a nice bonus, right? And I think there's kind of the sticky when you think of the local government, there's different tax streams that are regular and kind of come up every year and And we know we can rely on. And so you think of these additional capital as just almost more fuel for the fire. And especially in government where taking on new projects occasionally can be hard to find that capital, those buckets of money, whether it's federal grant money for something that kind of like body cameras, the federal grant money really turbocharged that market. You know, we see that now with the ARRA money.

So one of your things is, you know, I've seen it on your Twitter account, you're offering a lot of even free advice to entrepreneurs. But what advice would you have for those entrepreneurs that looking at scaling a business in the GovTech market? Any foundational tactics or strategies that they could look at leveraging?

Yeah, so A, thank you for your service. We need more entrepreneurs in government technology. I think, you know, we can talk the business side of government, but what drew me as kind of a public servant is like the work that public service does matters, right? Like we're having dramatic impact whether you're at a city, county, state level, the work we do affects citizens and public servants need great technology. And so there's a ton of opportunity for new innovation in the space. What I think the key parts I try to find, there's different opportunities in the government market. There's one market potential, which is, hey, there's kind of a historical system that's been used and can you build a better widget? So think about, hey, you know, licensing, permitting, is there a way to do that system better or build it on more modern stacks of AI, ML, or cloud computing, et cetera. And then there's kind of greenfield opportunities, which are, hey, there's new things that have happened that require new technology. So there's, you know, Airbnb didn't exist 20 years ago, so cities didn't have to do Airbnb compliance. Well, now they do. So there's a series of software around that. You know, social media didn't exist 20 years ago, and now it does. And so now there's, you know, software that helps you do social media archiving and reporting. compliance. And so as an entrepreneur, I think it's important to know what type of business are you. Are you a replacement? Are you a greenfield opportunity? I think it's also important to understand where, you know, who's your ideal market. Government's so big. Is your target market, you know, 50,000 population cities, or is it 500,000 population, or 5 million? Is it counties, or is it cities or states? And so the best GovTech entrepreneurs really know what their sweet spot audience is, and that really turbocharges your growth.

Well, coming back to scaling, what about the capital side of scaling? Any advice for those entrepreneurs that might be looking to scale with capital?

Yeah, I think, I think it's really being thoughtful on what you're using the capital for and what you, what do you want to be when you grow up, right? And so There's some folks that, hey, from day one, it's IPO or bust. They're trying to build billion-dollar businesses, and it's really a venture capital market and plan. But the trick is once you're on that train, it's hard to get off. And so understanding the capital you're taking, what is that signing you up for? What are your investors trying to do? While there's other types of money where, hey, maybe it's not IPO or bust, but even in our model, We're trying to buy great businesses at fair prices and grow them and make them better. But we don't need an IPO stock market outcome for it to be a win-win for the customers, for the employees, and the entrepreneurs. And so I think just on capital, understanding what you're signing up for. And then last, do your references. I think like all things in life, whether you're doing employee references, You know, you're signing up for a long-term relationship on the capital side. And so, you know, if you're— if you have a great business, you have a lot of options. And so understanding who you're working with, do your reference checks and make sure they're people you want to sign up with and share common values.

So we'll make sure to drop all your social profiles in the show notes for today. But we always want to give our guests the opportunity to, you know, make sure you can share a link, you can share what you're working on, anywhere that we should go to learn more about you or what you're working on, Steve.

Yeah, so, um, uh, the Brydon Group, our new initiatives at brydon.com, B-R-Y-D-O-N dot com. If you want to check out our entrepreneur in residence program as an entrepreneur, or if you run a small business and looking to transition, uh, check it out there. And then yeah, uh, feel free to find me on LinkedIn or Twitter, Steve Ressler on Twitter, and always happy to connect with folks, uh, in, in the broader GovTech public service community. Um, just love the space and, uh, love what you're building.

Yeah, Steve's a solid follow on Twitter. He's providing, uh, you know, insights into the GovTech market, but also for those of you that are in that entrepreneur side, interesting kind of, uh, advice and best practices and experience based on, uh, being a founder and what to expect, what to expect as you walk through that journey. So certainly a worthwhile follow there. So we'll make sure to include that in the show notes. Steve, thanks so much for joining us and sharing your insights on, on GovTech and what you've got going on in the Bridging Group.

Awesome. Thanks, Joe. Have a great one. Bye.