Thinking About a Government Sales Channel in 2026? Now is the Time to Act
Written by Louis Piconi
I’ve built a few tech companies that broke into the government market the hard way—learning how the legislation/budgets/procurement works, winning our first pilot, then turning that foothold into a repeatable sales channel. If you’re an early-stage company (or you’ve simply never sold to government before), I think right now is one of the best windows in years to start building a state and local (SLED) motion.
1) The money is shifting—and states have more discretion in how they deploy it
Under the Trump administration’s FY26 posture, agencies and programs are seeing realignment and pressure, which is changing buying behavior and accelerating “do more with less” priorities. In practice, that pushes decision-making down the stack: states are prioritizing outcomes, speed, and measurable ROI, and they’re often more flexible than federal buyers about how to structure pilots, expansions, and multi-year modernization roadmaps.
A concrete example is the Rural Health Transformation Program (RHTP)—a $50B program running FY26–FY30that requires states to submit plans to access funding and execute transformation activities. When large, programmatic dollars are routed through states with plan-driven spending, it creates a practical entry point for vendors who can help states deliver quickly: analytics, workflow, AI-enabled service delivery, cybersecurity, eligibility modernization, fraud mitigation, and core infrastructure.
2) 2026 will bring a wave of new gubernatorial agendas
If you’ve ever watched how government agendas and buying changes, you know elections matter—but governor transitions matter most because they reshape priorities across agencies. In 2026, gubernatorial elections will be held in 36 states, which means dozens of new “first-100-days” agendas, cabinet appointments, and signature initiatives. New leadership creates a predictable spike in: strategic plans, executive directives, program reviews, and “quick wins”—all of which translate into procurement activity.
3) Companies can benefit more from a systemic approach than scale
Founders often assume government sales requires a giant BD team. It doesn’t—at least not at first. What it requires is a clear strategic plan and a systemic approach: one problem to solve, one clearly differentiated and aligned solution, validation in test markets, aggregation to build opportunities, filtering to determine which opportunities are optimal, and then a focused operational plan. State and local politics can look fragmented from the outside, but once you learn how the system works, you can often deploy that system across multiple states in a time and capital efficient manner.
4) The best time to start is before you “need” it
Government revenue is sticky once you earn trust—but trust takes time. Building the channel now—while you can invest in building gubernatorial/legislative support, agency relationships, pre-election discussions, references, and procurement readiness—means you’re positioned when a program like RHTP, a new governor’s priority, or a budget shift turns into an urgent buying cycle. A systemic approach can make this activity both time and capital efficient.
If you’re early, don’t wait to be “big enough.” In SLED, credibility compounds—and the companies that start building it now will be the ones winning when the next funding and political cycle hits full speed.