No longer a choice for startups - The definitive playbook to navigate (and win-win with) government

It has been mantra — almost a badge of honor — among tech startups in Silicon Valley that government is the problem. Move fast enough, build a large enough market around government, and you can win big before burdensome regulation gums up the works.

Uber has been the prototypical example. While regrouping from significant cultural and business practices, there can be no doubt of its impact in the way all of us think about mobility, work, and how we spend our time. They did this, so the story goes, by asking forgiveness rather than permission — outpacing government, taxi and union organizations before those entrenched interests understood what hit them. 

But what if this isn’t the real story? 

A deeper, more nuanced understanding of Uber is that they from the very beginning mapped out and understood very well the limits and opportunities in regulation. They also had unique dynamics of bringing service of such value to both customer and drivers, they could in parallel build grass roots support to influence constructively the legislative and regulatory environments that could have squashed them.

Sure, they moved fast around government. But they moved smart with government. And there are sophisticated, complex, strategic, tactical and eventually massively rewarding methods for startups solving big problems worth getting right up front. They begged plenty of forgiveness. But they knew and worked with the rules of the road they were facing.

Few people on the planet are better positioned to understand “regulatory hacking” than my friend Evan Burfield. He and his co-founder (and also my friend) Donna Harris founded 1776 in Washington, DC and their powerful software platform Union both of which became a global hub of finding the connective tissue of ambitious startups generally but also navigating government to both their and government’s benefit. His new book, Regulatory Hacking you must pre-order today is the definitive playbook here. I wish I had this read before I ran one of my companies in health care, I can tell you that.

Why is Evan’s message so important now? Evan expressed five clear realities of today:

1)     Tech is diversifying beyond Silicon Valley — this may seem counter intuitive as still the vast proportion of global venture investment is within 50 miles of San Francisco. But looking forward, it is clear that with tech everywhere — in our country and around the globe — great companies will solve large problems relevant to where they live.

2)     Easy problems have been solved — well it’s not that solving massive social engagement, mobile access, global ride sharing was easy. But if you look at the biggest problems still under-addressed — in health care, education, infrastructure, security — all are intertwined with governments here and around the world.

3)     There is a crazy (in my view) backlash toward tech. It’s hard to find a tech-positive article written by any journalist these days, and too many politicians are pushing us to think backward rather than forward. This cannot be ignored. As legendary founder of sales force.com Marc Benioff has said, “financial services, consumer goods, food in tech and more, the government is going to get involved.” Best they do so positively.

4)     Having said all this, government simply isn’t solving many problems today anywhere near fast enough. Tech allows massive access to resources, reach, information, and action across any area of public good to be solved — right now.

5)     We are entering an age of technological wonder — science fiction is becoming realities. Again, the press tends to talk about the risks of AI, machine learning, blockchain, self driving cars, genomics and more. As real as issues will need to be addressed, we have now in our hands capabilities to help human existence only dreamed a decade ago.

Evan sets the foundations of how startups need to think about this environment right from the beginning. Every entrepreneur knows her TAM, total addressable market, but Evan explores the equal importance of her surrounding and varying constituents — who and what influences these buying decision makers, who are they currently buying from thinking they are solving a problem, who are their layers of decision makers. 

Have an ed tech startup? What are the laws, regulations and norms that must be navigated. Massive market opportunity tells us nothing. Mapping out the budgets, the decision makers, parents, PTA’s, politicians and regulation saves a whole lot of pain. It will help you segment your markets by interest. It is, as he calls, your “power map.” And this map may change and evolve, but that is fine as long as you understand it and your business model remains flexible.

His book will wake you up to the power of finding “first mover” regulators and “smart governments” — thousands, especially in local markets (mayors and politicians, but folks doing the day to day) who are embrace innovation. He shows models from New York City to Dubai that are embracing innovation not only from external entrepreneurs but from what they can offer and learn from the changing world of opportunity tech offers. And he makes crystal clear the mass amount of capital available, private and public, for those committed to make change that can succeed.

His narrative comes alive when he describes the remarkable stories of succeeding entrepreneurs themselves — most you’ve never heard of, but are deeply relevant to getting your ideas off the ground. I know personally, but learned a ton, about companies like family-safe carpooling HopSkipDrive. There is plenty of AirBNB and Elon examples here, but the relatable case studies to many entrepreneurs will be in these stories in the same stages they are in.

The lessons are for any entrepreneur is there: how to tell your story: (tell the why, tell a simple story, know your audience, be your authentic self). Understand the importance of your data — one of his most important chapters takes us by the hand on why data is foundational to how you build your business, but also how today it will be the basis of your success. Telling the DNA-testing company 23andMe story he shows how building influence — and building a network of influencers with the goal of access, credibility, reach, resources and domain expertise — are essential to navigate both resistance but build support in the highly sensitive worlds of health care.

He reminds us that government is a massive market, but selling to them is no easy task. The narrative is terrific, but the action steps clear: do your homework; don’t be a cynic (not all rules are dumb but have a purpose); decide whether to beg forgiveness or ask permission; remember it’s often simpler to comply (not every rule needs to be worked around); it’s easier to tweak than start from scratch; local and esoteric can be competitive advantage; think twice before poking big bears (sure rules need to be changed, pick your battles) ; rules are meant to be broken (or at least changed) smartly; never forget hacking is creative.

I love that throughout he refers to “citizens” rather than “consumers.” While not comprising the intense rigor and performance expectations of any company, we are reminded that in the places where regulatory hacking most counts, real people are looking to better real lives. “Citizens exist within the context of societies, and the health of those societies matter to the health of individual citizens.”

Wise words for our time, and a reminder of the impact entrepreneurs and innovators are making right now. We are, in fact, living in an age of wonders where we have the tools to solve nearly anything. This book helps tell us how best to win big.