The two class panels on the role of federal and local government highlighted the importance of taking regulation into account in all stages of a startup endeavor. Patrick McKenna shared a helpful framework to think about how to engage law makers throughout the process. During the early entrepreneurial stages, he suggested thinking broadly about the relevant regulation in place at the local, state, and federal level and adjusting one’s business model appropriately. After moving into the growth stage, the focus shifts from adapting to influencing the existing regulation in favor of one’s business. Finally, once a start-up becomes a mature company, it can then seek to use regulation to protect its market by creating barriers to entry.
Regardless of where one’s company falls within the startup-growth-mature framework model, it is important to build network relationships. In the initial stages, interactions may be more limited to participation in start-up roundtables, expos, and other events where government officials are present. However, as a startup grows, so to can a founder’s government relationship. With more industry experience, for example, a founder can become a subject matter expert in their particular realm and provide relevant information to local leaders. At that point, with a more established business and relationship, a founder can formally schedule a meeting to “pitch” his or her startup to a government representative with a clear “ask.” Even prior to the actual ask, entrepreneurs can still gain valuable information from their interactions with different municipalities. Their conversations will likely provide insight into potential near-term regulation to address local challenges and opportunities.
A common theme throughout the course discussions is that working with government requires a great deal of patience. It is necessary to think critically about the relevant regulation in place and how that may impact one’s startup model, because influencing government is a long, slow process. Early on, it is best to be aligned with government, although there may be some exceptions (Uber) to that rule. Once a startup enters the growth or even mature phases, it then has the luxury of thinking more long-term and engaging government to establish mutually beneficial regulation. We see this approach to be effective even when government is not just a partner but also a customer. Blake Hall, for example, introduced ID.me to federal government as an established startup once he no longer relied on immediate signups as he had a steady income from his commercial customers. Therefore, he could afford to be patient in getting government to adapt his product. Similarly, entrepreneurs that are seeking government to change regulation, must also be in a growth or mature business stage to be able to wait comfortably.
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