Often, startups and new tech ventures are disrupting an established industry and consider the established competitor from a market and competition perspective, but rarely assess the ability of the competitor to obstruct success through legislative or regulatory changes at either the local, state, or federal level. These political challenges can affect businesses in a way that may never have been considered but could lead to costly crisis management needs or even business closure.
You’re probably all too familiar with the political challenges that have faced Uber, Tesla, Airbnb, and others, despite developing technologies largely loved and welcomed by consumers. Each continues to pose threats to the very existence of established and very well-connected industries. Think about the taxi driver unions for Uber, the entire hotel industry for Airbnb, or auto dealers for Tesla.
Take a deeper look at Tesla v. auto dealers. There’s a national association for auto dealers, state associations, metropolitan associations, and even an association for the executives of the state associations. These aren’t new groups, nor are they novices at political engagement. Consider how many auto dealerships are in one town, even in small town USA. Now think about how many employees the dealership employs; not just sales teams, but service teams, customer care teams, HR, accounting, communications, marketing, the list goes on.
Further, think about the local supplier that provides balloons and signage to the dealership, the local restaurants, gas stations, and stores that have developed around the dealership to serve its employees and customers. Finally, consider that many of the dealership owners, employees, friends, and family are heavily involved in the local community, from baseball team sponsorships to local schools and church involvement. These folks see local, state, and federally-elected lawmakers at church on Sundays and Wednesdays, at baseball on Tuesdays and Thursdays, at the local barbeque fundraiser on Monday, and at the grocery store on Saturdays. They’ve had relationships with lawmakers before they were ever elected, their moms taught the elected in elementary school, and their parents are neighbors. This isn’t just politics for many folks, it’s their livelihood, their neighbor or their dad’s employment, their community that’s on the line if the local dealership closes, and they will engage. Now replicate this across the country. Not to consider the power of these communities is to be blind to the political landscape around your business. It’s important to have a proactive plan to address what is likely to occur once you gain traction in the marketplace.
It is important to be proactive on a narrative or to be prepared to react once a narrative is out that your offering will shutter a community or a company, whether it’s true or not.
Even if it is decided not to act proactively on a political or communications plan, knowing how you will respond or engage should certain scenarios become realities will save your team time and money being able to move on, instead of spending hours and days scrambling and panicking in an effort to understand what is going on around them outside of their control. Further, while engaging in a media campaign against you to paint your technology as unsafe for consumers in order to stall you in the marketplace, a competitor could be using the same arguments with lawmakers, and encouraging them to pass laws to prevent consumers from ‘getting fleeced’ or harmed in an unsafe vehicle ride or travel stay. If you’re only focused on combating the public misinformation, you could very-well miss the political engagement that ultimately shuts you off from the public, i.e. the law being discussed, drafted, and run through the legislature to deem your technology illegal. At that point, it doesn’t matter if consumers want to use your product, they won’t be able to get it. In a less extreme scenario, laws or rules passed by a commission that don’t need legislative approval, could be passed that impose too many regulations on your business that make it impossible or unprofitable to adhere.
Established industries and companies often have decades of developing political relationships and investing in their political strategy. If you’re not considering whether there are political threats or opportunities for your business or technology, you’re ignoring a massive blind spot that could lead you to a crisis and possibly insurmountable investment needs to overcome. You should also be aware of any political opportunities and relationships at your disposal. It is important that a global discovery be performed in order to produce a solid opportunities and threats assessment, political landscape analysis, and strategic plan.
It’s time for tech startups and their investors to be politically proactive and stop being surprised that politics and governments want to meddle in your business.
There’s no such thing as minding your own business anymore, and the sooner that is recognized, all emerging technologies and business will be better off.
And, don’t forget to be advocates for other technologies or startups facing challenges because they go against the established way of doing things; the success of those facing challenges before you will only help you and save you time and money.