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Presumably (maybe a bad presumption), agencies that use their services save more/make more than they are billed for.
It would be a shame to kill a group that was saving money overall because they did not bill enough internally.
This is disappointing to read, given I love what 18F has done. No matter whether we think they should be breaking even or not, they shouldn't be creating wildly inaccurate revenue projections and then falling drastically short of them. That looks like something is going drastically wrong with management there, especially considering greater macroeconomic conditions have not changed drastically enough in a way that wo…
How many fast growing startups have accurate financial projections?
Activities that can’t be billed to other agencies are another drain. One example is staff time totaling 727 hours on a logo change. The old logo was a blue square with 18F in the lower-right-hand corner. The new logo, a black square with 18F centered and a different font, wasn’t worth the time and doesn’t look as good. for anyone else curious: (new) Black Logo: https://18f.gsa.gov/assets/img/logos/18f-logo.svg (old)…
By the way, like a friend suddenly shaving off all of their hair, I consider a corporate logo change to be a harbinger of bad things to come.
> The new logo, a black square with 18F centered and a different font, wasn’t worth the time and doesn’t look as good. That was a really odd injection of opinion to read in what appears to be a news piece.
* "But like many digital-age start-ups, 18F, named after GSA’s 1800 F St. NW address, was long on vision but short on management."
* "Not wanting the bad news to overshadow the good works, ..."
* "It shows."
In a perfect market, they would be able to sell their services at the same price as the value of those services. So if they build a system for the Veterans Administration (VA) that saves $1 million, they should get $1 million for it. Their EOY revenue would reflect their value created.
But they are actually selling to themselves. They are a part of the federal government, and their customers are other agencies. So the price they should charge is actually (value created - effort to get paid).
If they waste $500,000 of man-hours to get that $1m, then the government loses $500k for no reason, other than for 18F to be able to point to $1m in revenue as proof of services provided.
The government as a whole also loses out if price is an issue for the buyer, but a net win for the whole organization. If bureaucracy means that a department isn't willing to spend $1m to reap $2m in savings, because maybe the benefits are nebulous or internal politics or any of the other crazy things that people do in big organizations, then it actually benefits the government as a whole for 18F to do it for free.
While I like that they focus on revenue to prove the impact they are having, selling products to other agencies shouldn't be profit maximizing. Any inefficiencies, either to the buyer or seller, are taxing to the organization.
Side note: $32m is nothing. I'll take that any day over people building GIF hosting and SnapChat.
2015: $22.26 million
2016Q3: $27.82 million
This looks like encouraging growth to me.
It is clear that they have not billed enough to break even internally, but have they saved/made more for other agencies to break even for the government overall? Presumably (maybe a bad presumption), agencies that use their services save more/make more than they are billed for. It would be a shame to kill a group that was saving money overall because they did not bill enough internally.
Did I misunderstand or is the story also - A government department was started with the ambitious goal of "zero budget" and this year with a 183 person team will have recovered 68.75% of its costs. And did we forget that fast growing startups don't usually break even either?
> The new logo, a black square with 18F centered and a different font, wasn’t worth the time and doesn’t look as good. That was a really odd injection of opinion to read in what appears to be a news piece.
As a made-up example, a news article on Samsung's falling stock might focus on its Note 7 failures, making the assumption (and thus giving the reader the impression) that the mobile phone is the main cause of the company's decreasing revenues, when in fact the company's general electronic components sales have been dying for months. But this slow decrease is much less sensational and might've missed the headlines. This sort of "opinion" is far more difficult to notice, but still exists in reporting in the form of attempting to speculate on the reasons behind the facts.
This article just happens to be particular blunt about its assumptions.