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This is probably why VC's have historically shied away from heavily regulated industries. It's just too easy for " insanely ambitious" founders to run afoul of

This is probably why VC's have historically shied away from heavily regulated industries. It's just too easy for " insanely ambitious" founders to run afoul of the rules and laws. Fortunately for AirBnB, these rules and laws weren't enforced all that often.

dimitrios1 6y ago
This is inaccurate. Some of the most successful startups in recent memory made their bankroll by skirting regulations. It eventually catches up to them, but by then they've made a decent sized war chest to comply and plow forward. Eventually the startup just becomes the next established player. Rinse and repeat.
- jnmandal 6y ago
  Yeah I mean, there is practically a cookie cutter framework for building successful startups based on industries with regulations that are protective or restrictive (depending on you look at it) enough to skew markets.
- jgalt212 6y ago
  Please cite some examples from "heavily regulated industries".
  - whimsicalism 6y ago
    Uber is the canonical one.
  - dimitrios1 6y ago
    The one you are literally commenting about. Uber. Medical Software / Device startups. Energy startups. The list is too long. A basic search will yield you bountiful results.
travisoneill1 6y ago
In AirBnB's case were there actually any preexisting rules? It would seem strange to have rules in place governing short term rentals before there was really even a market for that.
- jgalt212 6y ago
  surely, you jest? A simple google search of AirBnB and illegal will more than satisfy your curiosity. And yes, a good portion of the laws broken are directly broken by the lessors, but many are also broken by AirBnB itself.
  - travisoneill1 6y ago
    I mean laws that existed at the time AirBnB was started, which you seem to imply in your comment. I still think it's strange that the government can tell you how long of a duration you have to rent your property for, but it definitely is the law now.
    - ceejayoz 6y ago
      Laws on short-term rentals, hotel zoning, etc. were all in existence long before AirBnB. Many AirBnB listings were violating laws from the very start. The platform didn't invent a new type of violation, it just made them a lot more common.
    - parthdesai 6y ago
      Yeah because taxes surely didn't exist before AirBnb started. https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/ https://www.wired.com/story/inside-airbnbs-guerrilla-war-aga...
    - NovemberWhiskey 6y ago
      New York's Multiple Dwelling Law is probably a canonical example.
- jnmandal 6y ago
  In resort/vaction areas, there were (and still are) cartel like systems in place. There are also restrictions on true "BnB" or "Inns" in that they were regulated like hotels are. You are definitely on to something in that the concept of a "short term rental" market has been sort of born out of AirBnB's existence but that segment is just a cross section of a larger market that has always existed, its just mostly been serviced by larger real estate developers, boutique hoteliers, hospitality management professionals, etc.
salawat 6y ago
There's not that much that keeps you as a startup from thriving in a regulation heavy environment. In fact, most regulators aren't there to kill you. They just want to know you have a plan that builds towards compliance over time. There is admittedly a difference in the stakes and severity of enforcement in different verticals; but it's more than possible to comply. In fact, zealous compliance can actually get regulations rewritten and unmask systemic fraud/non-compliance in established actors if you do it right. Everyone should be meeting the same goals, but if you have one company struggling to honestly do so, it's a sign to look into tge mechanisms other actors have in place and whether they actually do what is on the tin. EPA learned that indirectly the hard way with Dieselgate.

dimitrios1 6y ago

This is inaccurate. Some of the most successful startups in recent memory made their bankroll by skirting regulations. It eventually catches up to them, but by then they've made a decent sized war chest to comply and plow forward. Eventually the startup just becomes the next established player. Rinse and repeat.

jnmandal 6y ago
Yeah I mean, there is practically a cookie cutter framework for building successful startups based on industries with regulations that are protective or restrictive (depending on you look at it) enough to skew markets.
jgalt212 6y ago
Please cite some examples from "heavily regulated industries".
- whimsicalism 6y ago
  Uber is the canonical one.
- dimitrios1 6y ago
  The one you are literally commenting about. Uber. Medical Software / Device startups. Energy startups. The list is too long. A basic search will yield you bountiful results.

travisoneill1 6y ago

In AirBnB's case were there actually any preexisting rules? It would seem strange to have rules in place governing short term rentals before there was really even a market for that.

jgalt212 6y ago
surely, you jest? A simple google search of AirBnB and illegal will more than satisfy your curiosity. And yes, a good portion of the laws broken are directly broken by the lessors, but many are also broken by AirBnB itself.
- travisoneill1 6y ago
  I mean laws that existed at the time AirBnB was started, which you seem to imply in your comment. I still think it's strange that the government can tell you how long of a duration you have to rent your property for, but it definitely is the law now.
  - ceejayoz 6y ago
    Laws on short-term rentals, hotel zoning, etc. were all in existence long before AirBnB. Many AirBnB listings were violating laws from the very start. The platform didn't invent a new type of violation, it just made them a lot more common.
  - parthdesai 6y ago
    Yeah because taxes surely didn't exist before AirBnb started. https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/ https://www.wired.com/story/inside-airbnbs-guerrilla-war-aga...
  - NovemberWhiskey 6y ago
    New York's Multiple Dwelling Law is probably a canonical example.
jnmandal 6y ago
In resort/vaction areas, there were (and still are) cartel like systems in place. There are also restrictions on true "BnB" or "Inns" in that they were regulated like hotels are. You are definitely on to something in that the concept of a "short term rental" market has been sort of born out of AirBnB's existence but that segment is just a cross section of a larger market that has always existed, its just mostly been serviced by larger real estate developers, boutique hoteliers, hospitality management professionals, etc.

salawat 6y ago

There's not that much that keeps you as a startup from thriving in a regulation heavy environment. In fact, most regulators aren't there to kill you. They just want to know you have a plan that builds towards compliance over time. There is admittedly a difference in the stakes and severity of enforcement in different verticals; but it's more than possible to comply. In fact, zealous compliance can actually get regulations rewritten and unmask systemic fraud/non-compliance in established actors if you do it right. Everyone should be meeting the same goals, but if you have one company struggling to honestly do so, it's a sign to look into tge mechanisms other actors have in place and whether they actually do what is on the tin. EPA learned that indirectly the hard way with Dieselgate.