Why businesses need to engage in political processes | Jay Bregman | TEDxSalford

Summary

The speaker shares their nervousness about discussing the intersection of politics and technology, challenging the Silicon Valley notion that startups should ignore regulation. Drawing from personal experience founding companies like 'Halo', they argue that engaging with regulators proactively is crucial for startups, especially in regulated industries. They highlight the importance of understanding the impact of new technologies on society and the role of politics in shaping future regulations, advocating for a proactive approach to create competitive advantages.

Takeaways

• 🤔 **Longest Applause:** The speaker starts by acknowledging their nervousness due to receiving the longest applause in the history of a four-year event and addressing the challenging topic of politics and technology.
• 📚 **Secret to Success:** The speaker discusses a concept from Peter Thiel's book, 'Zero to One', which suggests that successful businesses are built on secrets—something you believe is true that others think is false.
• 🔍 **Politics and Technology:** Contrary to popular belief in Silicon Valley, the speaker argues that politics and regulation are crucial for startups and businesses to consider, as they impact society and need to be engaged with proactively.
• ⏳ **Different Time Horizons:** Entrepreneurs and politicians operate on different timeframes; while startups often focus on short-term gains, politicians think in terms of years or decades, which influences how they regulate technology.
• 🚀 **Entrepreneurial Experience:** The speaker shares their entrepreneurial journey, starting from registering the domain classof2001.com to creating e-courier, emphasizing the importance of aligning with regulations to succeed.
• 🚖 **HALA's Success:** HALA, a service focused on connecting drivers and consumers efficiently, succeeded by addressing regulatory concerns from the start, engaging with regulators in cities like London and New York.
• 🏙️ **Different Regulatory Environments:** The speaker contrasts regulatory approaches in London and New York, noting that London's lenient stance contrasts with New York's cautious, lawsuit-prone environment, likened to Gotham City.
• 💼 **Regulatory Asymmetry Opportunity:** Regulatory differences can create business opportunities, as understanding and engaging with regulations can offer a competitive advantage in a rapidly evolving technological landscape.
• 🌐 **Impact of Emerging Technologies:** The speaker emphasizes that modern startups have a significant impact on daily lives and need to anticipate regulatory involvement to prevent challenges and gain market advantage.
• 🔮 **Future Business Opportunities:** The speaker suggests future businesses might capitalize on predicting regulatory changes, using this knowledge to create vast business opportunities by understanding how technology will be regulated.

Q & A

What is the speaker's secret about politics and technology?

The speaker's secret is that politics and regulation are inevitable in the tech industry, and startups should engage with regulators proactively rather than ignoring them.

Why does the speaker believe startups should engage with regulators?

The speaker believes that regulators will regulate whether startups are involved in the conversation or not, and being proactive can help shape regulations that are beneficial for both parties.

What is the difference in time horizon between entrepreneurs and politicians according to the speaker?

Entrepreneurs often think about the short term, like the next year, while politicians commonly think about the next 10 years, which is the typical time frame for things to get done in politics.

What was the speaker's first entrepreneurial venture?

The speaker's first venture was registering the domain name 'classof2001.com' in 1997 with the idea of creating a social network for college students.

What is 'e-Courier' and how does it relate to the speaker's entrepreneurial journey?

'e-Courier' is a service that uses technology to improve the efficiency of courier companies, allowing customers to track their deliveries. It was a stepping stone for the speaker to later create 'Hala'.

What was the core idea behind 'Hala'?

The core idea behind 'Hala' was to connect people with service providers efficiently through just a couple of taps, starting with taxi services and expanding to other types of transportation and services.

Why did the speaker and their partners decide to engage with regulators before launching in London?

They engaged with regulators to understand their concerns, such as safety and the impact on the ecosystem, and to proactively address these issues before they became problems.

What was the outcome of engaging with regulators in London for 'Hala'?

Engaging with regulators in London led to the creation of services for the disabled and ensured that only licensed drivers were on the platform, which eventually became part of the official regulations.

What was the difference in regulatory approach between London and New York as described by the speaker?

In London, the regulatory approach was more about clarifying existing legislation, while in New York, it resulted in a multi-million-dollar lawsuit and a more detailed set of regulations due to a more cautious and stringent regulatory environment.

Why does the speaker think there is an opportunity to create businesses based on regulatory asymmetry?

The speaker believes that regulatory asymmetry is not going away and that understanding and navigating these differences can provide a competitive advantage and a business opportunity.

What advice does the speaker give for future businesses in terms of politics and regulation?

The speaker advises future businesses to consider the societal impact of their services, engage with relevant politicians and regulators proactively, and potentially use knowledge of future regulations as a business advantage.

Outlines

00:00

😨 Embracing the Intersection of Politics and Technology

The speaker begins by expressing their nervousness due to the high expectations set by the audience's applause and the sensitive topic of politics and technology. They challenge the Silicon Valley notion that politics and regulation are antithetical to startups, sharing a secret from Peter Thiel's book 'Zero to One' about the importance of secrets in business foundations. The speaker believes that engaging with regulators proactively is crucial for businesses, especially those with societal impact, as ignoring them can lead to unforeseen consequences. Drawing from personal experience, they highlight the different time horizons of entrepreneurs and politicians and the importance of being part of regulatory conversations.

05:01

🚔 Navigating Regulation in the Transportation Industry

The speaker recounts their entrepreneurial journey, starting with a college social network idea and moving to e-courier, which led to the creation of 'Halo', a service designed to connect people with providers of goods or services. They emphasize the importance of engaging with regulators early on, using their experience with taxi drivers in London as an example. They discuss the concerns of regulators regarding safety, licensing, and ecosystem impact, and how addressing these concerns proactively led to the inclusion of services for the disabled in their product. The contrast between the regulatory experiences in London and New York is highlighted, with New York's more adversarial and detailed approach leading to a lawsuit. The speaker concludes by emphasizing the importance of understanding and engaging with regulation as a competitive advantage and the potential for businesses to be created around regulatory asymmetry.

Keywords

💡Politics and Technology

The intersection of politics and technology is a central theme of the video. The speaker emphasizes the importance of engaging with regulators and understanding the political landscape to successfully integrate new technologies into society. This concept is illustrated by the speaker's experience with Hailo and how they proactively approached regulators in London and New York.

💡Regulation

Regulation refers to the rules and laws that govern how businesses operate, especially in industries that impact public safety and welfare. The speaker argues that startups should not ignore regulation, as it will affect their operations regardless. Engaging with regulators early can help shape favorable outcomes and avoid conflicts, as seen in the Hailo case.

💡Peter Thiel

Peter Thiel is an entrepreneur and venture capitalist, co-founder of PayPal, and early investor in Facebook. His book 'Zero to One' is mentioned by the speaker, particularly Thiel's idea that successful businesses are built on secrets that outsiders initially believe to be false. This notion inspires the speaker to reveal their 'secret' about the necessity of engaging with politics in technology.

💡Secrets

In the context of Thiel's book 'Zero to One,' secrets are foundational truths or insights that others overlook or dismiss. The speaker believes their 'secret'—that political engagement is crucial for technological success—can help create or expand significant businesses. This idea challenges the conventional wisdom in Silicon Valley that startups should avoid regulatory issues.

💡Silicon Valley

Silicon Valley represents the hub of technological innovation and startup culture. The speaker critiques the prevailing attitude in Silicon Valley that politics and regulation are obstacles to be ignored. By contrast, the speaker advocates for proactive engagement with regulators as a strategy for sustainable growth and success.

💡Hailo

Hailo is a transportation network company co-founded by the speaker, aimed at connecting taxi drivers with passengers via a mobile app. The speaker discusses Hailo's approach to working with regulators in London and New York, highlighting the importance of compliance with safety and licensing standards, and how this proactive stance benefited their business.

💡E-Courier

E-Courier is another business venture by the speaker, which utilizes technology to enhance the efficiency of courier services. The speaker mentions E-Courier to illustrate their entrepreneurial background and the importance of using technology to solve logistical problems. This business also underscores the theme of integrating technology with traditional services.

💡Disabled Access

Ensuring disabled access refers to making services accessible to people with disabilities. The speaker shares how Hailo incorporated features to serve disabled customers, which not only fulfilled regulatory requirements but also expanded their market and improved public perception. This example highlights the positive outcomes of considering diverse user needs in business planning.

💡New York vs. London

The speaker contrasts their regulatory experiences in New York and London to illustrate different approaches to regulation. London's regulators were more cooperative and focused on safety and licensing, while New York's environment was more litigious and challenging. This comparison underscores the need for startups to adapt to varying regulatory landscapes.

💡Regulatory Asymmetry

Regulatory asymmetry refers to the differences in regulatory environments across regions or industries. The speaker suggests that understanding these asymmetries can create business opportunities, as companies can leverage their knowledge of regulations to gain a competitive advantage. This concept emphasizes the strategic importance of regulatory awareness.

Highlights

The speaker is phenomenally nervous due to the longest applause in the event's history and discussing politics and technology.

The speaker read Peter Thiel's book, 'Zero to One,' and emphasizes the importance of secrets in founding big businesses.

The speaker believes the secret is that politics and regulation should not be ignored by startups.

Regulators will regulate regardless of startup involvement; it's crucial to engage with them early.

There is a vast difference in time horizons between entrepreneurs and politicians.

The speaker has a background in entrepreneurship, starting with registering the domain classof2001.com in 1997.

The speaker's venture, e-courier, improved courier efficiency using technology and laid the groundwork for Hala.

Hala focused on providing efficient transportation services through technology, emphasizing driver needs.

Engaging with regulators early helped shape Hala's business model and address concerns such as safety and licensing.

Regulators in London were concerned about safety, licensing, and the impact on the ecosystem, leading to product adaptations.

Hala also focused on services for disabled individuals, integrating their needs into the product.

Hala's engagement with regulators ensured that licensed drivers were the only ones on the system, aligning with safety concerns.

In New York, regulatory challenges were more intense, involving multi-million dollar lawsuits.

The speaker highlights differences in regulatory attitudes between London and New York, reflecting views on human nature.

The speaker believes future businesses can capitalize on regulatory asymmetry, using knowledge about potential regulations as a competitive advantage.

Transcripts

so the truth is following that i'm

phenomenally nervous um

for two reasons one because uh it was

said to be the longest applause ever in

the history of this four-year event

and the second because i'm going to talk

to you about politics and technology i'm

actually going to take one of your

favorite words technology and i'm going

to mix it with a word that you might not

find quite as appealing

and i'm going to tell you why

so i was on the train up here and i was

reading peter thiel's book peter thiel

being an ex-operator at paypal

one of the first investors in facebook

and he wrote a book called zero to one

and in that book he actually has a very

interesting part where he talks about

secrets he says every big business that

existed is founded on a secret something

that you know to be true that the

outside world thinks is false

so i believe i've got a secret and i

wanted to share it to you because i

believe that maybe you can use it to

found an extremely big business and i

believe a lot of businesses can use it

to become even bigger than they are

so the secret is about politics the

traditional vogue thinking in silicon

valley is that politics and regulation

and startups simply don't mix and they

shouldn't mix that startup should ignore

regulation i don't believe that that is

true

my experience is that regulators are

going to regulate whether you're in the

conversation or not whether you're in an

industry that is currently regulated or

will be regulated if you have an impact

on society politics will be there and if

you are not engaged in those

conversations there will go on without

you and ultimately although it may take

days years

for those for those blowbacks to be

certain they will come and that's

another thing about why i think politics

and regulation or politics and

technology haven't mixed well

is there is a vast difference in time

horizon when you're an entrepreneur

thinking about next year unless it's you

know a minute to midnight

is a lot

when you're a politician thinking about

next year or next quarter about next 10

years is commonplace because that's the

amount of time that it takes for things

to get done

so let me tell you about a little bit

from my own experience uh building a

couple of different companies so by way

of background i've been an entrepreneur

for as long as i can remember i actually

registered the domain name

classof2001.com when in 1997 when i was

about to enter college

therefore with the idea that you could

have a social network that kind of

connects people in college if you catch

my drift um from from one place to

another

starting universities and eventually

taking over the world but i missed that

boat then i started something called uh

e-courier and e-courier is still around

um in london although it has different

owners e-courier is a service that is

not regulated that uses couriers to

basically uh or uses technology to

improve the efficiency of courier

companies and allows you to actually see

where your courier is

and really out of that grew the idea for

what would become hala

which was really all about two taps to

taxi or two taps to transportation and

pretty soon two taps to anything the

idea was long before people would view

this as commonplace that basically

out in the world there were many many

people that wanted to provide you things

that basically were very very

inefficient that had lots and lots of

free time and there were many many

people that wanted things that basically

you could connect them to

so me and my partners found three taxi

drivers which we went out and uh terry

russ and gary who were basically trying

to do a very similar thing

um and basically they came up with this

idea that you should basically focus

squarely on the needs of the driver on

the needs of the supplier of the

provider of whatever good or service it

was and that by doing that and by

creating a happy pool of people who were

ready to provide services that was the

best way to make

people happy as consumers but we

recognize that this was a regulated

industry that we were going to basically

run into and we're going to have to

engage with regulators so we didn't wait

what we did was we went and talked to

them even before they called upon us and

i think that this is a really important

thing to do

first of all it teaches you what's on

their mind and i'm going to tell this

story through the lens of new york and

london since london is where the

business grew up and new york is where i

live right now

so we went and talked to regulators and

they were concerned in london where we

started about a couple of things they

were concerned about safety they were

concerned about making sure that only

licensed drivers were on the system they

were concerned about how this would

affect the ecosystem and so basically we

went to them we talked to them and out

of that came actually a couple of

interesting things

one is

the ability to provide services for the

disabled so basically we had always had

this in our agenda and had been a

personal passion of mine to make sure

that things like halo could be used to

basically allow people who were of

disabilities who couldn't walk to be

able to provide

match them with service providers who

could as there are only some taxis in

any city that can provide service to

disabled people

and so we went out and found you know

tons of people who were disabled we

talked to them we found out what their

needs were and we built a product around

that and sure enough that would become

part of the eventual regulations that

regulators would have for this product

or service

so the second thing was allowing

licensed drivers now this is something

that basically we would have done anyway

and we already did so basically it's an

exemplar of a lot of the rules and

regulations you will run into are things

that you would have already have done it

wasn't to our advantage to basically

allow unlicensed drivers onto the system

and the reason was is basically that

would make if anybody had an accident or

had an insurance claim that would

basically cause a lot of bad things to

happen

like i said i'm incredibly nervous

following that act

uh

so so anyway we went to new york and we

tried we launched in london was very

very successful there were lots of

people who were using it and we had data

and so we went to new york and what was

interestingly these very same principles

and the very same conversation that

occurred at some windowless offices in

transport for london in london became

actually you know a major multi-million

dollar lawsuit in new york

and

of course it's new york style

and why is that well the reason is that

i think when i think about regulations

and the difference between new york and

london i think that really it's

reflective of what people's view is of

human nature

so if you look at silicon valley you

know i think their view of human nature

is one of idyllic you know it's kind of

reflected by the campuses that they have

right people are good we hire good

people everybody is smart everybody's

well off everybody's well educated

and therefore why would people ever do

bad things

if you look at some place like london

the generally their attitude is look as

long as it's not hurting anybody it's

probably okay

at least that's what we we found in our

microcosm of the world or so we like to

think about

in new york it seems like it's batman's

gotham to anybody or any regulator there

it's i'm gonna think about the world

from the perspective of the most you

know harmful possibly demonic person and

then think about how that might be done

and ask you how your product or service

addresses that um and so what was a

couple of pages of existing

clarification of existing legislation in

london became tens of pages and

literally a lawsuit by the other by the

the um

by the private hire association against

the regulator to basically get to a

conclusion that said exactly what london

had already said before uh you know

absent all that that that but i guess

that's a conversation that you still

have to have in my view and i certainly

don't regret anything about you know us

going through and having those

conversations

in fact i think that basically

there will be the opportunity in the

future for people to create businesses

all about this regulatory asymmetry

because it's not going away

the reason why i'm having this

discussion about politics and technology

is because people are creating services

now that have an impact on people's

lives that is perennial greater than

they ever would you know one-year-old

two-year-old companies are starting to

impact the way that you actually go

about your daily habits

versus something that is say just a kind

of substitute for television or anything

else not to name you know any names

so and i think mobile technology is

definitely bucking that trend so when we

think about what things are going to be

like in the future and you think about

what businesses you're going to create i

think you have to think about what

impact on society is it going to have

and therefore which politicians and

which regulators are going to basically

deal with this

and then try and get to them before they

get to you

or before your competition does because

i think ultimately that's what's going

to create a competitive advantage in the

future

i also believe that it is possible that

basically someone could create a

business based on this lack of knowledge

about regulation and basically knowing

more about how a technology was going to

be regulated in the future than it

actually was

so what do i mean by that well if you

take another area of technology that you

think is going to be regulated in the

future and you really think about it and

you think about well look this is going

to be regulated how are the regulations

going to fall what kind of help do the

regulators need in order to do this

then potentially that in and of itself

is the opportunity to create a vast vast

business

and so anyway

i'm really nervous but that's my secret

and that's what i wanted you to know so

thank you guys very much