Regulation as a business model

One of the most potent business models, you can have, is if the use of your product or service is directly mandated by law. Or, in the absence of the complete model, heavily subsidized by law.

When something becomes a law, it automatically drives decisions; people and organizations are required to do x, y and purchase z – your product – to stay within the law or at least get subsidized by the government (which has roughly the same effect on helping grow your revenues).

What could be better?

Let’s say you’re in HealthTech. You may not necessarily be required by law, but indirectly the laws governing subsidies for specific treatments can materialize into official recommendation for treatments that specifically includes your product or service.

You become a de facto public standard.

If you can make it to this point, you have really got it made.

Getting there, though, is super, super hard. Because if there are things, you don’t control and should have no ambition to even try to control let alone influence heavily, it’s lawmaking and the creation of rules and regulations.

Ok, you could have the ambition to influence it. But the obvious risk is that by choosing that as a focus, you end up spending your time and effort in the wrong way.

Because no matter your best efforts, you have absolutely no guarantee that you will end up being successful in your endeavors. Quite on the contrary; the overwhelming risk is that you will come up short. And then you will have nothing to show for it.

The best thing you can do is therefore to figure out where you can join to apply gentle pressure – trade organizations of any sort, special interest groups – and then show up, when there is an opportunity to do so, speak your case. And then let them do the heavy lifting for you.

That will effectively allow you to have a leg in both camps: On the one hand you’re trying to influence a development that furthers your ambition in the long run, while you’re busy executing on your business plan on the short term.

(Photo: Pixabay.com)

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