Evan Burfield - Regulatory Hacking: A Playbook for Startups

Alexa, please play Five Little Monkeys by the Kiboomers, Endeavour, my two-year-old daughter, asks from the backseat. Nothing happens, so she asks again more urgently, before I explain to her that Alexa isnt in our car.

Yet, I think to myself.

Netscape went public the year I graduated from high school, twenty-three years ago. I still remember the anticipation and frustration of watching web pages render line by line through my AOL dial-up connection. Forget about asking an AI voice-enabled assistant to play me musicif I wanted a song I had to dig through my stack of CDs. I met my wife standing in line for a bagel, long before you could swipe right for love.

Today, I have limitless information and entertainment available in my pocket, constant connection to my social and professional networks, and Im never more than a tap on my iPhone away from dinner, diapers, or a driver arriving at my door. Wherever I am traveling away from home, I sing Endeavour her good-night songs through FaceTime. In the two decades since the digital revolution burst forth promising to change everything, our lives have in fact changed in unbelievable ways.

Except where they havent.

When I voted in my last election, I stood in line to fill in circles with a pen on a ballot. If I walk into an emergency room tomorrow, Ill fill out paper forms. When I next go to the DMV, Ill need a stack of papers to confirm my identity. When Endeavour starts school in a few years, teachers will present material to her in much the same way that they did to me when I was her age. In some of the most important parts of our lives, little has changed.

Every day, in our cities and neighborhoods, we step into not-so-hidden time machines. Theyre our city halls, our hospitals, our schools. Like a bureaucratic dystopia, theyve been lost to time, seemingly untouched by the digital revolution. And whats even scarier is how essential these tech vacuums are to life, liberty, and the pursuit of happiness.

Our lives as consumers have gone digital. Our lives as citizens remain stubbornly analog.

This is a book about improving our lives as citizensin America, and around the worldby building and growing startups in complex, regulated markets that are intertwined with government. Why is this book needed now?

Were witnessing the collision of five trends that will cause the next twenty years of the digital revolution to look very different than the last twenty yearsin good and important ways.

First, tech startups are diversifying beyond Silicon Valley, both in terms of geography and strengths.

Startup founders tend to solve the problems they know and understand.

For a twenty-five-year-old programmer in Silicon Valley, think about how much life has improved. Goods and services, from toothbrushes to massages, flow to him almost automatically. News and information are at his fingertips. A car is always waiting just around the corner. A hot date could be just a swipe or two away.

Now, think about a lower-middle-class single mom working multiple jobs to make ends meet. Her daily struggles include how to affordably get across town from one worksite to the other, how to pick up her children from school on time, how to put healthy but affordable food on the table, and how to obtain new skills that will help her find a better-paying job. Those twenty-five-year-old programmers in Silicon Valley havent done nearly as much to help her tackle her problems.

The Valley has been the place to build digital startups for most of the past twenty-three years, soaking up more than 25 percent of global venture capital in 2016. Given its dominance, the Valley has driven many of the assumptions about who should build startups, how they should build them, and what they should focus on. The Valley can be a magical place, but its also far removed from the lives of the other 99.9 percent of the people in the world.

But the world of digital startups is rapidly diversifying. Silicon Valley isnt on the declinefar from itbut the rest of the world is catching up quickly, having systematically studied the Valley model and slowly learned to apply it to their own contexts. This is true across America, and around the world.

Investment Growth by Country, 2010-2016

Tomasz Tunguz, a Silicon Valley venture capitalist with Redpoint, produced the chart above, showing the growth rate of venture investment in the ten fastest-growing venture markets, plus the United States, from 2010 to 2016. Venture capital in America is growing at 12 percent per year, but that growth is dwarfed by economies such as India, Ireland, and Korea.

And venture capital is a trailing indicator of the growth of startup ecosystems. Communities are receiving increasingly sophisticated support from initiatives such as the Rise of the Rest and the Global Entrepreneurship Network, and the results are starting to show.

Over the past several years, Ive worked with startups on the ground in more than fifty cities, across America and spanning six continents, every one of which now has a vibrant startup ecosystem.

Each of these ecosystems has its own culture, economic assets, and talent. Boise and Lincoln arent going to produce the next Facebook, but their communities understand the gritty details of agricultural production a lot better than the Valley does. Houston and Baltimore might not create the next Netflix, but they have world-class talent in healthcare. This holds true for cities all around the world, most of which have historical strengths in industries that matter more to our lives as citizens than our lives as consumers.