GOVERNMENT
First the dot-coms descended on the B2C (business-to-consumer) market. Then they attacked the B2B sector. Now comes the latest and perhaps most challenging play: C2G (consumer-to-government).
The C2G market "has all the right characteristics for opportunity," says Kaleil Isaza Tuzman, CEO of New York City-based govWorks.com, which aims to be a major C2G player. "Government is the biggest monopoly out there."
Isaza Tuzman came up with the idea for govWorks.com after unearthing a year-old unpaid parking ticket; he realized there had to be a more efficient way to interact with local government. His new site has already secured about $50 million in venture capital, and will soon roll out a Spanish-language version.
govWorks offers an array of services, ranging from local government job listings and chat rooms to online government auctions and facilitated payment - nationwide - for parking tickets, utility bills, and real estate taxes. (The annual revenue generated from the latter three categories is about $300 billion.)
So far, only a handful of city governments offer anything comparable: Indianapolis' site (www.egov.com) lets users apply for permits, register nuisance complaints, and pay parking tickets; Seattle's portal (www.ci.seattle.wa.us) allows for payments but is cluttered and hard to navigate.
The govWorks site earns revenue through transaction fees and subscription charges for premium services such as government auctions and job listings. The fees aren't cheap - they range from $2 for a $10 parking ticket to $30 for a $1,500 real estate tax bill - but they can be reduced or eliminated through an incentive program. Mostly, though, the site's backers are betting people will be willing to pay for the convenience.
"This wasn't a space where VCs were hunting," says Michael Levinthal, a general partner at Mayfield Fund and now a govWorks.com board member. "But after we saw what they were doing, it was obvious that this is huge. These are definitely change-the-world type of people, and most important for us, they're changing the world that others haven't."
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