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Why Entrepreneurs Need To Keep Up With Changing Regulations


by Kelvin Simmons, a partner at Nexus Group

The modern tech leader will encounter his or her share of proverbial hoops and barriers.

Whether it’s the development process, staffing, or another variable, your can’t-miss startup solution will probably face an obstacle or two on its way to viability. Regulation is one issue that looms exceptionally large for tech entrepreneurs.

The importance of law to an entrepreneur can’t be overstated. Tech regulation is fluid and shouldn’t be disregarded by companies of any size, especially tech startups that will need to navigate fluctuating oversight issues and potential lobbying.

A number of moving parts align with regulation — particularly tech regulation. Remain cognizant of it, and you’ll be able to position your product to scale and handle the rigors it will inevitably face.

How Government Regulations Influence Your Business.

Laws and government regulations affect almost all business activities. When it comes to the regulation of tech companies, the foundation of that oversight doesn’t differ much from that of non-tech companies.

Entrepreneurs whose products will come under government regulations must first make them official with the necessary branch of government. The business itself will need to register with a city, county, state, or federal government entity for tax purposes.

Once registered with the correct governmental body, you’ll likely have to go to the specific agency that will oversee how your business conducts itself. This office works to ensure your solution operates in the best interest of the public’s health, safety, and welfare. For example, a new ride-sharing company would need approval from local regulated industries or a state revenue office before it could commence operations.

After pinpointing what offices you’ll answer to, the regulation of tech companies comes down to determining which rules exist and which ones apply to your business. An agency usually documents these ordinances, but the legislation will often be riddled with legalese. In those situations, it can be helpful to consult a legal professional to clarify whether that’s how your tech company should be regulated.

These pillars exist to promote transparency and accountability at a governmental and an entrepreneurial level. Learning the ins and outs of regulation, specifically tech regulation, offers numerous long-term benefits. The impact of government regulations on small businesses is vast, which means tech startups must ensure they’re equipped to endure.

Managing the Impact of Government Regulations on Your Product.

The importance of law to an entrepreneur isn’t just limited to how you can operate in your industry. Regulation plays an important role in a product’s potential to withstand and effect change.

For example, let’s say you’ve built an office solutions suite that is better than Microsoft Office that you want to sell to a government entity. Even if your product is genuinely superior, higher-ups might want to exercise caution and first see how the solution handles a public company’s workflow. If a public company experiences any mishaps, not only will that government office remain cautious, but it might also introduce a tech regulation that protects the public interest and hinders your potential growth.

A legal understanding of regulation is essential, but it’s even more vital to know what other options exist to help you minimize (or maximize) the impact of government regulations on your small business. Explore these options to further your cause:

1. Find officials with common interests.

If a regulation matters to you or your company, it probably also resonates with a high-ranking government official on some level. Research and find an official or ally who’s passionate about that particular tech issue or regulation. This person can be invaluable in helping your initiative gain traction — he or she can serve as a sounding board, mentor, and champion for your tech regulation undertakings.

For example, when ReShonda Young joined her family’s Iowa-based delivery company, Alpha Express Inc., her first step was to join the local chamber of commerce. The move allowed Young to sit in on those meetings and conversations to figure out who shared her professional interests.

2. Seek out influential committees.

Once you’ve built a personal connection with an official, become a valuable resource or member of a relevant committee. If the official is in the process of drafting a regulation that will directly affect your business, for instance, try to share a transparent list of the pros and cons of the law.

The Texas branch of the National Federation of Independent Businesses, for example, regularly holds an event after the conclusion of the state legislature that connects lawmakers with business owners. Entrepreneurs can meet with officials or their associates, communicate their causes, and put faces to regulations.

Affiliation or contact with a committee might seem like a small step, but tech leaders who exercise it can open particularly helpful doors.

3. Start a social campaign.

The regulation of tech companies shouldn’t just happen behind the scenes. Take to specific platforms — namely social media — to see what’s current and what’s building momentum.

Connect with lawmakers and their staff members via email or social media to make your voice heard on any tech regulations that could negatively or positively impact your product. Find hashtags and search lawmakers’ mentions and social engagement to see where an issue stands and how you can add to the conversation.

Always approach tech regulation advocacy from an entrepreneurial standpoint. Start with compliance before educating yourself and then focusing on sharing how tech regulations might affect your company’s bottom line. Remember that the regulation of tech companies and startups is an ongoing process that changes regularly — these steps will make sure your product can move along with those shifting regulations.


Kelvin Simmons is a partner at Nexus Group, a full-service firm dedicated to government relations, lobbying, and consulting. Simmons is a former principal at Dentons and served as the chief of administration to former Missouri Governor Jay Nixon.


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