In industries being disrupted by new entrants with distinct business models, incumbents often have an important advantage: entrenched regulatory and legal barriers. These have forced AirBnB, Tesla, and Uber to make costly concessions to their operating practices or to exit certain markets altogether. How can new firms overcome the regulations that protect incumbents? Lobbying for policy reform isn’t much of an answer, because incumbents generally have the benefit of long-term relationships with government agencies built up over many years.
Startups Are Turning Customers into Lobbyists
Three ways Uber and other companies rally you to their cause.
October 24, 2017
Summary.
How can new firms overcome the regulations that protect incumbents? Lobbying for policy reform isn’t much of an answer, because incumbents generally have the benefit of long-term relationships with government agencies built up over many years. Recent research finds that some insurgent firms have prevailed on the regulatory front by using a strategy straight out of the playbook of environmental activists – mobilizing stakeholders to become political advocates. Organized demonstrations of support by stakeholder groups can send a powerful signal to policymakers. Firms mobilize their customers – one important stakeholder group – in three primary ways: online petitions, partnerships with other organizations, and customer associations.
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.