So, you think you are disruptive?!

When Airbnb and Uber were founded back in 2008 and 2009 respectively, I would bet the founders were telling everyone around them, including themselves, that they were going to change the world. Back in those heady days, the visions were as far-reaching as letting anyone host or drive anyone else anywhere anytime. Those kind of lofty ambitions, I would argue, are still the right ones. We have way too many idle homes and under-utilized cars. Why not optimize their value by sharing them? With these goals in mind, the co-founders were also taking on powerful incumbents in the taxi and hotel industries.

(That's me taking a ride in a UberBlack back in 2014 when the service was first launched in Singapore. It was a Porsche Panamera no less. I have just finished giving a talk at an intellectual property law conference and my UberBlack came before the valets can retrieve the private cars of all my fellow speakers. Take that!)

Fast forward to 2017, both companies and a lot of their rivals around the world have been hit by a slew of regulations that are slowing the rates of growth and innovations. But more critically, the regulations are also making these hitherto disruptive innovations look and feel very much like the incumbents that were supposedly going to be disrupted. And the incumbents have also since regrouped and caught up, well most of them anyway.

Suddenly, the Ubers of the world are looking very much like taxis. The cars are now clearly marked out with decals. The drivers have to take classes and pass tests in order to drive. And almost all the drivers are full-time professional drivers on the road 20 hours a day, 7 days a week. Same goes for the homes that are being listed on Airbnb and the other home-sharing platforms. Most of the listings are owned and managed by professional property managers. Looking at the incumbents, taxi operators are launching their own ride-hailing apps with in-app payments. And hotels are moving aggressively into offering residential-like space to guests.

Is this convergence necessarily a bad thing? Not really. Consumers are now better served. When in the past, we will have to stand by the roadside to hail a taxi, we can now do so in the comfort of our homes, offices or restaurants with a few taps on our smartphones. When in the past, we are at the mercy of cookie-cutter chain hotels, we now have the option of more localisation and personalisation in our travel accommodation. Yes, it is not the utopia that Uber and Airbnb have promised us when they first burst into the scene. But, it is a huge leap forward.

For Uber, Airbnb and their various local rivals, getting to this stage has not been without controversies. As I am writing this post, there are plenty of news reports about how Uber is being investigated in various countries, banned in London and hit with law suits accusing them on all sorts of illegal activities. Airbnb, although not as badly hit with bad press and regulatory enforcements, is also facing their own share of challenges to their business model.

(This was the first time we stayed in an Airbnb property. It was in Taichung City in Taiwan. Lovely farm-stay run by a really sweet family that also cooked us breakfast, had coffee with us and told us stories about all the interesting places around the farm. Now, you can't get that from a hotel.)

And that brings me to a question which is bothering me a lot these few days, "Where do we draw the line?" When someone comes up with a way to totally disrupt an industry which has been operating the same way for decades or even centuries, the new way will more likely than not run foul of some laws, regulations or government policies. Take any sector other than transportation and short-term accommodation, whether it is in finance, medicine, legal profession or even simple things like pet-sitting or home-dining. There are always some national laws, municipal regulations or just downright parochial council rules in place setting out what can be done, how to do it, who can do it and sometimes even how much you can charge for it.

In my previous life as a lawyer and public policy wonk, it was easy enough to advise my clients what can and cannot be done. Sometimes, with an especially enterprising client, it will even extend to rolling out a lobbying campaign to change the troublesome laws. Now, as a budding angel investor, the thought-process becomes more difficult as my money is at stake. I used to joke that, "If you are not borderline illegal, you are probably not disruptive." I still hold the same view and use it as a test when someone pitches me their so-called "disruptive innovation". But, there is now the additional consideration of how much of the venture capital invested will be eaten up with fighting the regulatory challenges standing in front of the startup? What are the likelihood of success in pushing back these regulatory challenges? And more crucially, what would success looks like? If the endgame is something like what Uber and Airbnb are looking at right now, is it worth expending the time, efforts and capital to try to challenge the status quo?

One of the most interesting sector we are looking at right now is what you can do with cryptocurrency and blockchain technology. We believe these new technologies will bring into existence new ways of payments and settlements. There are many detractors to the world of cryptocurrencies and blockchain technology. And this new industry is definitely upsetting the status quo so dearly protected by the incumbent banks and financial institutions. But most critically, this new industry is also challenging the powers of central bankers and financial regulators around the world in controlling the pool and flow of money in their countries. It is still unclear how much leeway central bankers are going to give to the different cryptocurrency and blockchain startups to develop. But I am betting that at some point, the endgame will be closer to what we have seen Uber and Airbnb being pushed into rather than a brave new world where money can flow easily from one person to another and from one country to another.

It's just how the world operates. Push-pull, yin-yang. Somehow, a new equilibrium will be reached but don't expect it to be so revolutionary that we are giving them multi-billion dollars valuations.