Government vs Innovation: Breaking Tech Barriers
Government regulations present many frustrations for innovation in business. When a business is entirely new, those frustrations are compounded. Startups have neither the advisement nor the funding to foster important relationships with government officials, and they often end up in the startup graveyard as a result.
Arika Pierce, Principal at Gide, advises tech startups on building successful relationships with government. Pierce works with three different types of companies in navigating regulation: the highly regulated, those who want to partner with government and those who what to contract for government. All three find government incredibly challenging to deal with. At Gide, Pierce helps these companies break through regulation barriers and road blocks.
A pointed example of what many believe is an example of government disrupting innovation is Uber. Uber chose to take an “act first and ask for forgiveness later” approach, and Pierce says that was a mistake.
I encourage businesses not to take this ‘act first ask later’ approach. I emphasize that everyone is not Uber. Uber is the exception, not the rule.
A risky approach to working with government will not work for most startups for several reasions. First, it undermines trust.
“If you are a highly regulated company eventually the government will catch up with you,” Pierce said.
There is also a risk that the “act first, ask later” approach will not get you to the desired end result. Uber’s actions have come at a cost. The company has had to hire over 250 lobbyists at the state level to advocate for their business goals.
Did it get them their end result? “Yes,” Pierce said. “But at what opportunity cost? Not every company can afford to hire this army to help them reach their goals.”
In Austin, Uber is in battle with the city council. While Uber is able to put pressure on politicians via vehement support from their customers, most startups can not generate this kind of activist loyalty.
“I’m not recommending that you go and ask government permission to innovate,” Pierce said. “Know what barriers there are in government and how you can work through them. Government doesn’t always understand the emerging technologies and they make assumptions that are very different than how the innovators define the work that they’re doing.”
There’s still hope for the future of the relationship between government and innovative business. Some government entities are trying to break down the barriers and invite new technologies into their offices.
To continue on the path of progress and collaboration, Pierce recommends four things:
- Think about how government is going to impact and intersect the work that you’re doing. Are they going to be a regulator? A partner? A consumer of your service?
- Create a government-relations plan that intersects with your business plan and your growth plan.
- Know who your supporters are, and who is not going to be as supportive. There could be opportunities for government to be your champion.
- Know when to get help. Especially for startups that will be highly regulated, it’s important to know when to bring in that outside expertise.
Pierce envisions many collaborative, successful government relationships if startups can learn to think strategically and proactively.
“A lot of people forget that politicians love to brag about what’s happening in their jurisdiction,” Pierce said. “If you don’t participate in the process, you won’t have a voice.”