a16z Podcast: The Art of the Regulatory Hack

If the next 20 years of startup-led tech innovation are going to be about addressing massive problems — like health, energy, transportation, cities, education, and more — it will mean more directly confronting (instead of stealthily bypassing) regulatory barriers and incumbent-driven regulatory capture challenges.

So how can startups “growth hack” in a highly regulated sector? In this episode of the a16z Podcast — the second of our podcasts from our most recent on-the-road trip in Washington, D.C. — Evan Burfield, the co-founder and co-CEO of D.C.-based global incubator 1776, outlines the techniques (really, an art form) of “regulatory hacking“. It’s not just a way to enter a market, but a way to create a market … much like Elon Musk did with Tesla: using the very system that drops lemons to make lemonade.

The technique begins by understanding informal and formal power; “power mapping” the influencers all across the chessboard (from the top down and bottom up); telling your startup brand/product story in a particular way; and then making your moves. Just as there’s a playbook for navigating Silicon Valley, there’s one for navigating D.C., argues Burfield; and while many entrepreneurs instinctively just want to get regulations out of the way, sometimes, you just need to know how to play the game.