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by drewrv 3711 days ago
I'd add 4) Flagrantly violate existing regulation.

Uber/AirBnB just straight up ignored laws regulating their industry. They bet that regulators wouldn't crack down too hard and they were right. But not every industry is regulated like taxis/hotels. Imagine a food startup that violates health and cleanliness regulations, or a finance startup that ignores the SEC.

3 comments

I think the food startup equivalent to Uber would be people preparing meals in private homes/kitchens: There's certainly regulation around commercial kitchens, but it's not obviously bad if a home kitchen is used to prepare a meal: I do that all the time for my friends. But there's a lot of things that can go wrong in a home kitchen too as they don't have a lot of the normal commercial food storage stuff like a blast chiller, so I think that type of startup would definitely invigorate the same kind of regulation fight Uber did.
I was thinking about this recently. A friend of mine started selling cupcakes and made a website to do it. I don't really know what it takes for Little Debbie to get a new product approved but I would assume some regulatory body has to be appeased before they start selling. I can't imagine my friend went through any of that. If anyone knows about the regulations in this area, I'd love to hear. I'll dig around and report back if I find anything of note.
This basically addresses it http://www.moneysideoflife.com/cottage-food-law

Looks like in 2012 Georgia was "pending." I'm in Atlanta, so there were no regulations in place when my friend started.

I feel inspired to use this line of reasoning to discover what to work on next.
Not disagreeing with you, but to expand on your point: the type of regulation that Uber is ignoring is easier to ignore because it doesn't impact the customer. If you ignore the health regulations at your diner, you're sure as shit going to alienate a good portion of your potential customers because in addition to being illegal, an unclean restaurant isn't desirable.

But what Uber did was notice that due to regulation, the taxi drivers were receiving wage X, while there existed a lot of people that would be more than happy to do the same job for less than X. Find some loophole in the legislated price floor that allows you to employ that section of the supply curve and you've got a big profit opportunity. You can't cut corners in an existing, fairly efficient market, and call it the same thing.

A tax prep startup that ignored IRS regulations. :) I'm just thinking of other examples that make me laugh.