4 Ways Government Can Actually Help Your Tech Business

Published in Inc.

The debate over the appropriate level of government regulation and interference with new platforms and technology will rage for years to come.

My experience is primarily shaped by helping Uber fight the taxi industry and deal with local regulators over the past five years. Regulators, who are put in place to supervise a particular industry or business activity, were resistant to the kind of change Uber brought.

Unfortunately for them, customers wanted the right to use Uber and let their local elected officials know. And thus, Uber prevailed.

But the clash between regulators and new technology companies has been happening long enough that there are probably now some clear tenets to live by:

1. Public safety

When public safety is involved, it is legitimate for regulators to look at new technologies and platforms and propose changes.

Take the P2P homemade food space (disclosure: MyTable is a Tusk Ventures portfolio company). People cooking food for sale in their home kitchens poses a legitimate health risk.

While just saying "no" is unacceptable (that's just laziness), it makes sense for government to work with the startups doing this to develop a regulatory approach that both protects consumers and supports entrepreneurs.

2. Monopolies

When regulations and proposals are stemming from complaints by entrenched interests who don't like losing their monopolies (think casinos, taxi medallion owners, unions), that's not a legitimate reason to interfere.

So, for example, when New York City Mayor Bill de Blasio tried to shut down Uber because he was taking campaign donations from the taxi industry, that was not appropriate (nor was it necessarily even legal; disclosure, Uber is a Tusk Ventures portfolio company).

3. Bureaucrats

When regulators act like petty bureaucrats who don't like change, and refuse to consider and process licenses and permits because the new model differs from the way they're used to is not a legitimate reason to interfere.

One of our portfolio companies (I won't name names since the problem was resolved) was seeking a license from a state agency. Their entire business couldn't launch until this license was granted, so there was a lot at stake.

Their model was innovative, unique, and therefore different. Even though their business was financially sound and their approach would result in clearly better outcomes for consumers, it took going over the heads of the agency bureaucrats and threatening public action to get the license considered and processed.

It shouldn't have to come to that.

4. Mistreating customers

When technology companies are mistreating consumers, that's a good time for regulators to get involved.

For example, take companies who refuse to process unsubscribes. The unsubscribe button exists for a reason. It means you don't want to keep receiving emails from them.

And yet we all have experiences where we unsubscribe to something and the emails just keep coming and coming.  That's a productive issue for regulators to focus on.

Or, if you can sign up for something online, you should be able to also cancel it online.  Why can I order HBO from my Time Warner Cable account but I have to call them to cancel it?

We know why (they know I'm not going to bother wasting an hour to save $13), but it's unfair and unreasonable. Taking this on would be a productive use of a state attorney general's time (far more productive than taking campaign donations from local casinos and then going after fantasy sports at their behest; disclosure: FanDuel is a Tusk Ventures portfolio company). 

In fairness to regulators at all levels of government, these are all new issues.  Most of the laws on the books never contemplated the types of ideas and technologies being developed today.  So trying to figure out how to reconcile old laws and new ideas often isn't easy and not everyone is going to get it right. 

But having a governing philosophy for when to regulate and when not to is a good idea, and when politicians come asking tech entrepreneurs for their money, they should come prepared to explain how they draw the line - and we should hold them to it. 

Bradley Tusk