MVPs for Highly Regulated Industries

A number of industries create unique hurdles for startups and new products. They come in the form of compliance constraints, legal restraints, or regulatory red tape. It is possible to create disruption in these industries, and there are a few strategies that work particularly well for this. Industries that most reflect this type of compliance complexity are healthcare, finance, gambling, food supply, electricity, government or military contracts, some types of manufacturing, and transportation.

It makes sense to think about the legal hurdles from day one before you build. You want a compliant product at all times. You don't want something clearly illegal just to prove it is technically possible. It can never be sold. However, depending on your risk tolerance or adherence to some later principles, be flexible on what's compliant. Sometimes it's good to bend some rules in order to offer value. Begging forgiveness is quicker and cheaper than asking permission. The answer is usually "no."

Find legal counsel that is bullish on your business. They have to be creative and solution driven. A "let's make this work" attitude is key.

If your legal advisors only say no to your ideas, and don't brainstorm ways to maintain legality while serving customers, they're likely not a good fit to be aiding you. They are there to advise you on risks, consequences, alternative paths and definitions.

Hyper growth can be key for these types of products. Artificially limit the supply of your product. Get really deep with a few core users, and refine the product to its highest potentially. Then open the floodgates and create a sensation. While you are too small, regulators don't care if you're bending the rules. When you're huge and a whole portion of the economy is relying on the service you're offering, the regulators can't shut you down. They'll be forced to adapt the law. And who are they going to turn to as a partner to decide what the law will be? You, the market leader.

Embed your offering with partners that have regulatory clout already. Find an incumbent who has the legal structures in place, and is willing to innovate with you. Include your offering alongside theirs, whitelabel your product and repeat with other incumbents. You can let them take on some of the legal risk, while you focus on the product innovation.

Entering industries that are highly regulated is a challenge. Hopefully some of these tips help you with your MVP. Reach out for some further guidance.

Original article posted at https://mvpengineer.com/mvps-for-highly-regulated-industries