A serendipitous meeting in March between the CEOs of two cutting-edge tech firms focused on enhancing government communications has led to an acquisition.
GovDelivery, a St. Paul, Minn. firm that provides outsourced e-mail delivery services to 300-plus federal, state and local government agencies, has purchased GovLoop , a popular social networking site for government employees that is based in Washington, D.C. Terms of the deal were not disclosed.
Both CEOs hailed the alliance as a sign of the momentum in the once-staid government market about applying the latest Web-based collaboration tools to public sector problems.
``There is in general a massive embrace of technology for solving problems and moving the mission of government forward,’’ says Scott Burns, CEO and co-founder of GovDelivery. ``The civil servants started the momentum, and now we have the sponsorship and motivation from the Obama Administration.’’
As a sign of the momentum, Burns points to the fact that GovDelivery is having its best year ever. Founded in 2001, it took the firm eight years to deliver its first billion messages for government agencies. It took seven months – from January through July of this year—for the firm to deliver its second billion messages.
``Every day, 10,000 to 100,000 people sign up for updates from the government through GovDelivery,’’ Burns said, adding that more than 15% of these people are government employees seeking updates from other government agencies while the rest are citizens who use the information for themselves. ``We’re helping push the information out.’’
Burns said he sees opportunities for expanding GovDelivery’s role in government-to-government communications through the acquisition of GovLoop.
Steve Ressler, CEO and co-founder of GovLoop, started the Web 2.0 site as a hobby 16 months ago. Now Ressler can quit his day job as an IT specialist with the Department of Homeland Security and focus full time on growing GovLoop, which has around 20,000 members.
``This is about turning a hobby into a job,’’ Ressler says. ``I get to be president of GovLoop and help it grow from 20,000 members to 100,000 members. GovDelivery is helping by providing the resources to build out a team to help moderate the community, to make the site better, and to add new features.’’
Ressler, a third-generation federal government employee who is passionate about public service, said the deal was more about freeing up his time to scale GovLoop than it was about money.
``I always say that on GovLoop I get five cool stories a day of how government has solved a problem,’’ Ressler says. ``This acquisition is about moving GovDelivery to where it can solve 50 to 100 problems a day…I’m just jazzed to do this full time and have the resources to do more good.’’
Ressler adds that the arrangement should make his life more manageable.
``It’s hard to balance a 9-to-5 job with a 5-to-9 job,’’ he said. ``There are only so many nights I can spend at Starbucks and not have my girlfriend get mad.’’
Ressler and Burns met at Government 2.0 Camp in March. At first, they talked about becoming business partners. Later, the conversation turned to an acquisition.
``We really weren’t out looking for acquisitions, but this is a unique opportunity,’’ Burns said, adding that this is GovDelivery’s first deal.
With GovDelivery’s backing, GovLoop plans to add up to five employees. To fund its growth, GovLoop is looking into corporate sponsorships that would allow tech firms to create user groups on the GovLoop platform. Another idea is to create premium moderated groups for particular agencies or topics.
Burns says the two innovative firms are more alike than they seem at first glance.
``GovLoop is about trying to improve things using new technologies, to help government figure out how to better run a local park or how to spend national recovery dollars,’’ Burns said. ``We’ve been trying to play in this same area.’’