P³ Startups
The $6T market for public-private partnerships
A Public–Private Partnership, or PPP ("P³"), startup, is the modern evolution of a prime contractor. Primes don’t sell software; they run government programs. PPP startups do the same, but are built like modern tech companies.
SaaS startups sell software. P³ startups run a government program.
Some examples:
Medicare ($1.1T) — Chapter
Benefits & Payments ($400B+) — Promise
Food & Nutrition Programs ($150B+) — Ordo
PPP startups run programs end-to-end, so the government agency doesn’t have to. They’re less like SaaS companies and more like infrastructure. And once they run programs well, they become the default choice. In government, the default wins almost everything, and becomes the prime of its market.
Why The Biggest Wins Will Be P³ Startups
There’s a popular idea in tech right now that if the federal budget is $6T, a startup only needs one small slice to become enormous. That’s why so much venture capital goes into hundreds of different RFP-writing tools or small defense startups hoping to be “the next Anduril.”
But the assumption is wrong. It misunderstands how government buys. Most government buyers use a simple checklist:
Does this meet the requirements?
Is this company legitimate?
Is the price defensible later?
Could this embarrass us if it fails?
Given that rubric, buyers almost always choose the least surprising option. And once a company becomes the familiar choice, it accumulates more work by default.
Primes take most of the market. Everyone else becomes a subcontractor.
So the biggest outcomes won’t come from tools that help others win government work. They’ll come from the operators who become the default.
Why P³ Startups Didn’t Happen Earlier
Because in the past there was a funding gap — what Palmer Luckey affectionately dubbed the “Valley of Death” in a recent interview. Its easy to raise seed funding and late-stage growth funding, but almost impossible to raise in-between.
Anduril had Palmer Luckey to keep it alive.
Palantir had Peter Thiel for the same.
For years, Silicon Valley was allergic to DC. Too slow, too bureaucratic, too political. Now those same investors post photos with senators and generals. That cultural shift opened the path for PPP startups to exist.
Why P³ Startups Need Venture Capital
PPP startups need capital early because they have to act like real operators long before revenue arrives. They need:
Compliance early, before revenue
Time to build trust, which only comes from experience
Enough runway to survive long contract cycles
They look quiet at first. They’re doing the unglamorous work. Then one day the compounding hits — and suddenly they’re running entire systems.
What Matters: The Operating Model
What really matters is the operating model. PPP startups typically win contracts by responding to RFPs, but the hard part isn’t winning—it’s running the programs every day. They need delivery systems that work everywhere, compliance that survives audits, financial controls that don’t break, and a business model that can handle dry funding cycles.
Most companies can run one contract. Very few run 100+ contracts without dying.
Once a PPP startup proves it can run a program anywhere, it becomes the least surprising option, and in government, the least surprising option wins.
Finding The Next P³ Startup
Government isn’t as different from other markets as people think. The best operator becomes the prime, and primes take almost everything.
So the question isn’t “How do we get a slice of $6T?”
It’s: Who becomes the prime in X category?
If you answer that, you win the whole segment.
So far, seems like the top budget categories are already spoken for: Medicare, Defense, Benefits & Payments, Food & Nutrition programs.
And even this understates the scale. These budgets expand every year, and Ross Fubini’s dual-use thesis implies a second market — private-sector work — layered on top. The true opportunity is much larger.
About Me
Hi, I’m Hunter Rosenblume, a software engineer and aging Thiel Fellow. I’m the CEO of Ordo, America’s fastest-growing school food service. We’re serving 3 million meals this year in 15+ states by building software for the NSLP program — a real example of a P³ startup.
Ordo is backed by XYZ Venture Capital, an early-stage fund investing in the next generation of P³ startups. If you’re interested in learning more, feel free to reach out, [email protected].