The idea of regulatory hacking — “combining public policy and alternatives to traditional marketing for startups to successfully scale in the next wave of the digital economy” — is important for new companies interested in changing energy, healthcare and especially government itself to understand.
Sonal Chokshi has a terrific a16z podcast interview with Evan Burfield, co-founder and co-CEO of D.C.-based global incubator 1776, that discusses the concept and strategy behind its effective execution.
“Think right now,” says Burfield. “Who’s is the most iconic entrepreneur in Silicon Valley, the one all the kids these days are aspiring to? It’s Elon Musk. Every one of his businesses is based on a regulatory hack.”
The idea, first socialized by Burfield in 2014, is that, in order to be successful, startups must create strategies, either integrative or combative, to deal with regulatory and policy issues. Key examples are Airbnb and Uber.
“At 1776, we believe that regulatory hacking is the best way to disrupt entrenched industries,” and writes co-founder and co-CEO Donna Harris. “Regulatory hacking means using the system to your advantage to drive scale, exerting outside influence on the system by engaging the public, or doing a complete end-around the system to force change from the outside. Fascinatingly, it’s a strategy big companies and trade groups have mastered and expertly used to their advantage for decades.”
Listen to “The Art of the Regulatory Hack“: