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This depends on the market structure. If your competitive advantage is product/market fit, it matters how you run the startup. If you are selling a commodity at

This depends on the market structure. If your competitive advantage is product/market fit, it matters how you run the startup. If you are selling a commodity at a loss in order to acquire a market share, all that matters is the depth of your pockets. And, well, if your competitive advantage is access to legislators to carve out special legal exemptions for yourself [0], good luck competing with that, mom-and-pop startup. [0] https://ballotpedia.org/California_Proposition_22,_App-Based_Drivers_as_Contractors_and_Labor_Policies_Initiative_(2020) https://ballotpedia.org/California_Proposition_22,_App-Based...

edouard-harris 6y ago
This is true, except that the "selling commodity at a loss" and "legal exemptions" examples both presuppose that you already have product-market fit for the commodity you're selling or the thing you're getting an exemption for. If people fundamentally don't want what you're selling, aggressive pricing and legal lobbying will only lead to you killing yourself that much faster. This is something we tend to take for granted with already-successful companies, but there was a time when everyone — even Uber and DoorDash — were struggling in obscurity to build something people would use.
- jjeaff 6y ago
  Maybe? Car services and taxi services kind of already validated product market fit long before Uber, lyft, etc. While yes, they have some benefits that people like, but it's not clear that those services would have been able to compete against existing services without heavily subsidizing to undercut existing market players.
mkolodny 6y ago
By "legislators" do you mean members of government? You linked to a California proposition, which any citizen can create: "In a special election held on October 10, 1911, California became the 10th state to adopt the initiative process. That year, Governor Hiram Johnson began his term by promising to give citizens a tool they could use to adopt laws and constitutional amendments without the support of the Governor or the Legislature. The new Legislature put a package of constitutional amendments on the ballot that placed more control of California politics directly into the hands of the people. This package included the ability to recall elected officials, the right to repeal laws by referendum, and the ability to enact state laws by initiative."[0] [0] https://www.sos.ca.gov/elections/ballot-measures/how-qualify-initiative https://www.sos.ca.gov/elections/ballot-measures/how-qualify...
cactus2093 6y ago
You're free to dislike prop 22, but what you're describing is really nothing like what actually happened. The special carve-out in this scenario was AB5, which was specifically designed to target Uber & Lyft (effectively every other industry you can imagine was made exempt from it). And the "access to legislators" was non-existent, that is literally the point of ballot propositions. Apparently these companies tried to work with legislatures first but they were unwilling to compromise. But anyone with a few signatures can put up a ballot prop in California without any special connections, and that's what they did. It was then approved by a majority of voters, it's hard to frame that as some kind of shady backroom deal. Lastly, it's pretty hard to imagine a mom-and-pop startup this might hurt. It hurts the legacy taxi industry but that is the very type of intrenched interest with their own special rules and special access to legislators that we're better off without. Any new rideshare or delivery app competitors get all the benefits of prop 22 that incumbents do.
- jjeaff 6y ago
  Sure, a few signatures to get it on the ballot, then just a few hundred million to get voters to vote for it.
  - daniel-cussen 6y ago
    Not to mention, they're supposed to be competitors, but they're cooperating so sweetly.

edouard-harris 6y ago

This is true, except that the "selling commodity at a loss" and "legal exemptions" examples both presuppose that you already have product-market fit for the commodity you're selling or the thing you're getting an exemption for. If people fundamentally don't want what you're selling, aggressive pricing and legal lobbying will only lead to you killing yourself that much faster. This is something we tend to take for granted with already-successful companies, but there was a time when everyone — even Uber and DoorDash — were struggling in obscurity to build something people would use.

jjeaff 6y ago
Maybe? Car services and taxi services kind of already validated product market fit long before Uber, lyft, etc. While yes, they have some benefits that people like, but it's not clear that those services would have been able to compete against existing services without heavily subsidizing to undercut existing market players.

mkolodny 6y ago

By "legislators" do you mean members of government? You linked to a California proposition, which any citizen can create: "In a special election held on October 10, 1911, California became the 10th state to adopt the initiative process. That year, Governor Hiram Johnson began his term by promising to give citizens a tool they could use to adopt laws and constitutional amendments without the support of the Governor or the Legislature. The new Legislature put a package of constitutional amendments on the ballot that placed more control of California politics directly into the hands of the people. This package included the ability to recall elected officials, the right to repeal laws by referendum, and the ability to enact state laws by initiative."[0] [0] https://www.sos.ca.gov/elections/ballot-measures/how-qualify-initiative https://www.sos.ca.gov/elections/ballot-measures/how-qualify...

cactus2093 6y ago

You're free to dislike prop 22, but what you're describing is really nothing like what actually happened. The special carve-out in this scenario was AB5, which was specifically designed to target Uber & Lyft (effectively every other industry you can imagine was made exempt from it). And the "access to legislators" was non-existent, that is literally the point of ballot propositions. Apparently these companies tried to work with legislatures first but they were unwilling to compromise. But anyone with a few signatures can put up a ballot prop in California without any special connections, and that's what they did. It was then approved by a majority of voters, it's hard to frame that as some kind of shady backroom deal. Lastly, it's pretty hard to imagine a mom-and-pop startup this might hurt. It hurts the legacy taxi industry but that is the very type of intrenched interest with their own special rules and special access to legislators that we're better off without. Any new rideshare or delivery app competitors get all the benefits of prop 22 that incumbents do.

jjeaff 6y ago
Sure, a few signatures to get it on the ballot, then just a few hundred million to get voters to vote for it.
- daniel-cussen 6y ago
  Not to mention, they're supposed to be competitors, but they're cooperating so sweetly.