How entrepreneurs can navigate an increasingly regulated world
As we’ve experienced in recent decades, through periods of uncertainty, the public calls on lawmakers to enact regulation designed to protect consumers and guide industries towards the “right” business practices. More often than not, lobbyists fight back, some laws are passed, some aren’t, and so we continue on. But as enter the “third wave” of the internet, where digital technology will be ubiquitous to solving our more complex challenges — water supply, energy grid, infrastructure, education — entrepreneurs will need a new approach. They will need to develop a new strategy for navigating these marketplaces instead of relying on what has been done in the past.
In 2008, I worked for the US Senate Majority Leader and had a front row seat to the ensuing financial crisis. That crisis was largely caused by the deregulation of the financial industry and lack of ample oversight by regulators. Greed was allowed to be nurtured with a vengeance, and, left unchecked, leveled our financial institutions and global markets. The public mobilized through movements such as the “Tea Party” and “Occupy Wall Street” demanding action. In the end, government bailouts, legislation, and new regulatory bodies were created to shore up the economy and begin to correct the system.
Today, with increasing news about the digital economy and displacement of workers, election meddling, proliferation of “fake” news, and the manipulation of one’s personal data, the public is again seeking a new compact between regulation and industry — this time, the tech industry. Consumers are calling for their elected officials do more to rein in our major tech firms and ensure they are not given unfair advantages because existing regulations are inadequate towards disruptive technologies.
According to a Axios-SurveyMonkey poll conducted in February 2018, 55% of Americans are concerned that the government won’t do enough to regulate technology companies. This is a 15% increase in concern over previous three months.
Speaking after his congressional testimony on CNN, Mark Zuckerberg acknowledged this new reality saying, “I actually am not sure we shouldn’t be regulated.”
Lawmakers have responded and begun to hold an increasing number of hearings, along with introducing new rules and regulations regarding a wide range of issues including privacy, immigration, net neutrality, and data security, just to name a few. With the scrutiny, it should come as no surprise that the major tech companies spend a record amount on lobbying. In 2017, Google, Amazon, Facebook, and Apple spent more than $50 million to influence lawmakers in Washington, DC. One has to wonder if there might have been a better approach than throwing money at the problem in a reactive way.
The tech industry is more than just the big tech firms. At 1776, we work every day with entrepreneurs using technology to find a solution for challenges in our transportation, health care, energy, education, and financial sectors. Often, they don’t have the resources to hire lobbyists to fix their problems. How they navigate the regulated marketplace and work with regulators will often determine their success or failure.
This is why I am excited about a new book coming from 1776’s co-founder, Evan Burfield, Regulatory Hacking: a playbook for startups. As recently proven, navigating the public sector and complex industries requires a different set of tools, techniques, and strategies. Evan is able to share his knowledge, from having helped thousands of companies in this space, in order to put the entrepreneur on a greater path to success.
As entrepreneurs use technology to shape into every aspect of our lives — how we work, play, learn, and live — this playbook will become essential reading.