Class 5

What role do governments and policies play in impacting startups? Are there ideal regulatory frameworks and networks relationships to nurture entrepreneurial activity?


Eve Lieberman, Laurent Crenshaw, and Patrick McKenna were in agreement that life cycle phase of a start up directly impacts how the start up interacts with government. In an early stage the entrepreneur is likely to be focused on gaining traction and devote no time to government relations. As a company grows in scale and manpower a dedicated government relations function is common. At this stage the entrepreneur is telling government that consumers are delighted and jobs are being created. In the final stage an entrenched company will use influence to perpetuate a competitive advantage. This life cycle view is consistent with accepted business model frameworks such as the product revenue over time graph shown below (from http://bdmclient.co.uk/sustaining-profitable-growth.php) or the Bass diffusion model.

These frameworks are product specific but a firm is equivalent to the sum of its products meaning that a start up as a whole follows a similar path.

What can government do to facilitate entrepreneurial activity? Is maximizing entrepreneurial activity an appropriate goal for government? The DeBlasio Uber story is instructive here. In a functioning democracy government is responsive to citizens. In a successful start up a company is responsive to client desire. As long as the client base is sufficiently large the goals of government and a startups are perfectly aligned.

What guarantees equality, justice, and protection of fundamental freedoms? In the US the Constitution addressed fundamental freedoms and transparency/a free press are tools that are capable of supporting justice. There are myriad forms of government in the global laboratory and the US may not have an optimal formula <http://www.theatlantic.com/business/archive/2012/10/think-were-the-most-entrepreneurial-country-in-the-world-not-so-fast/263102/>. I doubt that that on optimal form of government exist. I am glad there is a dynamic interplay between entrepreneurs and state.