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Startups and regulators will never understand each other. That’s OK

5 min read


Credit: Pixabay

I’m not the biggest risk-taker. I started out in newspapers — in 2005, the year print advertising peaked. I was a copy editor, so my job was literally to ensure we were safe with what we published. I moved to digital media in 2009, but for a (relatively) mature property that was founded in the months when Y2K panic was a thing. And we don’t chase scale, unlike more famous, VC-backed media shops.

So, I have sympathy for the fire departments and other authorities who are aghast at the “Uber for gasoline” startups that are triumphantly pouring gas into cars using pickup trucks with varying levels of safety and training precautions. Bloomberg is also sympathetic, judging by the juxtaposition of these two paragraphs:

“We have to look at the safety of everyone,” said Baxter, the San Francisco fire department spokesman. “You could imagine what could happen if a fueling truck went into a parking garage under a commercial or residential building, it would not be a good outcome.”

On a recent Monday morning, about 40 miles south of San Francisco, Aubuchon carefully drove a Ford F-250 pickup truck with 324 gallons of gasoline into a hospital parking garage in Palo Alto, Calif. The truck—also loaded with a gas pump, two fire extinguishers, a bucket of chalk to absorb spills, two orange traffic cones and a receipt printer—nearly grazed the ceiling of the garage as its radio antenna whipped around. Aubuchon was looking for a silver Mini Cooper.

I’m glad he “carefully drove”! (All ended well, by the way)

But I can understand the folks at the startups. They know that nobody likes new ideas, and you needn’t be an entrepreneur to understand the value of “act now and apologize later.” These startups are capitalizing on the success and popularity of on-demand services; they know that pumping gas is a pain (albeit an incredibly First World problem); and they are also getting funding, so, you know, why not give it a go?

Of course, on-demand startups of all stripes are encountering regulators and authorities who by default look to preserve the status quo. Meanwhile, startups only exist to disrupt the status quo (well, unless they just want to be acquired, but let’s put that aside for now). Their goals are rarely short-term, and sometimes the long-term vision is barely visible to the founders, much less the rest of us. Conflict is inherent.

There are a few issues at play with the “Uber for gasoline” startups, as I see it. Briefly:

  • Startups are too often confused with small businesses. Not every startup is trying to be a unicorn, but the mindset is markedly different. Yes, one can be passionate about a pizza shop, but unless you’re looking to aggressively franchise like Papa John’s did, you’re likely not a startup. The public doesn’t understand this, and official data conflates the two.
  • This confusion causes regulatory problems, and that makes communication more difficult. Most small businesses fit neatly into a regulatory framework: You get this license or that permit, you’re overseen and potentially inspected by X agency, you have such-and-such recourse if Y happens, et al. Early-stage startups often look like small businesses in terms of size but don’t fit into existing regulations (and, sometimes, flouting them). One can sympathize with Filld, Purple and the rest — if they wait for every agency in every jurisdiction to act, they could die. Just look at Sona Creamery, a cheesemaker that shut down largely because D.C. had no agricultural agency to verify its operations.
  • “Uber for gasoline” might be a terrible idea, but that’s a separate discussion. Even if all these startups go bankrupt in the next month, the inherent conflict and problems above still apply. In this particular instance, the challenges include legitimate public safety and certification concerns; insurance questions; possible bitter feelings from authorities over battles with other on-demand startups; and whether this idea can scale and be sustainable — and whether success is through a B2B or B2C model.

So, what can entrepreneurs learn from this ongoing saga? Recognize this disconnect and keep it in mind when you deal with regulators and the public.

This is a rare area where I feel comfortable offering advice to entrepreneurs, because I’m basically talking about communication and empathy. Look, you’re doing cool things, and you’re more knowledgeable and passionate about your offering than anyone. That’s great! That’s important! You can’t succeed without that passion and drive. But don’t forget that not only do most other people (including regulators) not care, they are also less informed, potentially fearful and bound by their own obligations, motivations and deliverables. You’re excited and impatient; they are wary and on edge, and they can make life difficult for your business if you spook them.

So, maybe don’t respond to a fire department spokesman’s statement with ““I don’t know that guy.” After all, would you really want a fire department that doesn’t care about people driving potentially hazardous vehicles around, especially into underground parking structures? Sure, maybe you’re 100% right and they are silly. But let that be your little secret when you communicate with them.

After all, if one of your biggest risk factors is “Regulators could make our business unviable,” then you’ve got a powerful motivator to educate and persuade even while you grow your business.

James daSilva manages SmartBlog on Leadership and edits SmartBrief’s daily newsletters on leadership and entrepreneurship. Sign up, and let him know what you think.