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- Are your startup's limits real or self-imposed?
Are your startup's limits real or self-imposed?
Alexander Shartsis
April 18, 2024
Rules constrain. But you can choose not to be constrained, and if done well that can be the difference between building the next Uber or YouTube, and wasting a decade of your life.
Travis Kalanick, CEO of Uber, announced that if Lyft was going to do illegal ride-sharing with personal vehicles, Uber would not “miss out on this innovation”. Seeing Lyft meet with no enforcement–but capture share with a much lower price point, Uber quickly followed. Travis realized the rules are fungible, and the constraints–in this case, of laws–could be ignored, as Lyft had proven.
In the mid 2000’s, there were over 50 online video competitors. Google even built its own, Google Video. Why did YouTube win? Because they had copyrighted content. Chad Hurley and Steve Chen realized that what people wanted was copyrighted, and it was impossible to get the actual rights to it. But users would upload it constantly–and YouTube could allow that, legally, provided they followed the Digital Millennium Copyright Act (DMCA) and take things down when requested. So they did. And another user would put it right back up again. Google wasn’t willing to be as aggressive–nor was anyone else.
That wasn’t the only rule YouTube broke. YouTube’s other winning strategies broke rules. YouTube made it easy to embed videos anywhere. This was viewed as “stupid” by competitors, thinking they lost the traffic (at the time there were no pre- or post-roll ads–it was all display ads around the video). They also started the stream immediately even that required very low resolution. Many felt that pixelated content was a bad user experience–another rule broken.
How can you overcome the constraints rules create?
Certain tactics can help:
Ask questions. Just because something hasn’t been done, or isn’t typically done, or is unlikely to work, does not mean it cannot be done or will not work. Sometimes, this comes at real cost (lawyers, for example) but if it is important, it is usually worth it.
Examine risks. Really examine them. While I don’t advocate breaking laws just for the sake of it, many successful startups would not have succeeded without breaking laws or violating regulations (YouTube, Google, Uber, Lyft, LegalZoom, Airbnb are just a few examples).
Be intentional and principled. Bending rules or being “Disruptive” for its own sake is usually counterproductive.
Focus on what’s right for your customers and your company, not what everyone else is doing. The only path to your success is your own path.
Wait to bring lawyers on staff. Having a lawyer on your team will dramatically increase risk aversion.
What rules are you choosing to be constrained by?
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