Regulators Belong On Your Startup Dream Team
When developing products or planning on industry disruption, startups frequently think about winning prestigious tech competitions, building the most cost-efficient product, or bringing an idea to market that will revolutionize the way consumers engage in a given industry. However, in-house counsel at startup companies can help executive focus on an often-neglected topic from the very beginning: building a relationship with regulators.
Uber, Tesla and Lyft are just some of the companies illustrating how thoughtful navigation of this key area is necessary for a successful market disruption plan, as these companies would not have achieved their respective levels of success without thoughtfully and systematically engaging with regulators.
“Many startups don’t think about laws, regulators, and elected officials constructively,” says Kent Leacock. Leacock is a government relations professional at startup Proterra Inc., the leading U.S. manufacturer of zero-emission commercial transit vehicles, where he is responsible for developing, and implementing the company’s state and regional government and regulatory affairs, as well as its public policy strategy.
As part of his job at Proterra Inc. and as a senior government relations professional with Seismic Systems, Inc., Acorn Energy, Inc., AT&T, and Comcast, Leacock has extensive experience with the relationship between regulators and innovators. According to Leacock, in-house counsel must help every startup master the following skills to effectively engage regulators.
Get to know your elected officials
Startups often don’t know who their elected officials are, and Leacock says, “That is a big mistake.” In addition to this being an important engagement starting point, “You need to meet with officials to demonstrate you are creating jobs and adding to the tax base.” Leacock explains. This this process doesn’t have to start at the very top. “You can do it in their field office and meet with the district director. Then go to Sacramento or DC and do the same. The district director will help schedule a meeting for you,” Leacock emphasizes.
Leacock also recommends talking to regulators and officials even when they may conflict with your personal views. “You just never know who will be helpful!” He explains, “I talk to everyone. Republicans, Democrats, Northern California, Southern California. On some level, everyone matters. They all have a vote on your issue. You need to attempt to talk to and build relationships with everyone. Just be persistent, accurate and polite.”
Engage in regular communication to build long-term relationships
Once you’ve helped your company establish a relationship, it grows only from regular communication with the right people and continued follow through. “Once startups know who their representatives are, they rarely check in with them more than once or twice a year,” says Leacock. This can negatively affect startups. “That is just not enough to build relationships and explain what your business does and why it is important for the local and national economy,” Leacock explains. Leacock also points out that many startups or their customers may need regulatory approval to proceed with producing or using their products or services.
This is another area where relationships with regulators can make or break a company. “It is challenging to get regulatory approval when a startup has made no effort to build knowledge and awareness of their business among the regulators,” Leacock points out. “Many people have an outdated view of government relationships. It is not about buying dinner and smoking cigars in some dark rooms,” Leacock explains. “You need strategic alliances with legislators and relevant agencies to make sure they understand what your startup is doing and what positive effects your technology has both now and in the future.” In short, as Leacock says, “It is not enough to visit Sacramento or D.C. once. You need to meet and check in with staffers regularly and consistently share information.”
Educate government representatives and regulators about your business
As part of the relationship-building process, startups need to educate regulators to help them understand the value of whatever product or initiative the company is trying to bring to market. “Startups need to explain and ‘sell’ their business to people who make decisions affecting their products. They need to tell decision-makers why their business matters, how it contributes to the economy, and how it affects lives. That is ultimately what every regulator and approver cares about.”
Leacock recommends that startups educate their government representatives and regulators by demonstrating the real-world result your technology or product will achieve, and sharing data from third parties so that regulators are informed and influenced by independent opinions. Leacock also recommends inviting government officials and regulators to your startup’s location. “Get them to your location and let them experience what it is like to run your business, meet who works for you, and see what impact you have on the community. Just get them to your facility to show them it is real,” he explains.
Take advantage of industry organizations and associations, especially if your government relations budget is small
Leacock also encourages startups to take advantage of various associations in their industries, even those that are only adjacently related to their businesses. “Associations and organizations allow you to leverage your message,” Leacock says. He explains many have a few annual legislative days when they visit the capitol to meet and greet relevant elected officials and regulator, and startups should always try to participate. In fact, Leacock links these memberships to much of his success in advocating for a startup on a tight budget.
An overlooked additional benefit is that a close relationship with regulators is also essential to appeal to investors. “A close, positive relationship with regulators is certainly an intangible that not many startups have. Having this will allow you to stand out when you interact with your investors,” Leacock explains. Leacock has even used government relations progress and interactions metrics to show the value of the company and how much progress it had made compared to its competitors. “Building this kind of credibility is very powerful and convincing, especially in an overly-regulated environment,” Leacock ads. For the reasons mentioned above, not only is establishing and maintaining a relationship with regulators is key for startups to achieve product success, it can also have a positive impact on investors – something any startup will be excited about.
This article was originally published by Above the Law.