In the entrepreneurial space, a favourite buzz word is “hustle.” Now I’ve talked about hustle before, and to be honest, I think it is fantastic. It gets things happening. You avoid procrastination and overplanning. Hustle is the enzyme catalyst for action in a business, it takes that initial idea, like the reagents in a reaction, and makes things happen. Fast. Put together your customer and a prototype (reagents), add a bit of hustle (the enzyme catalyst) and you get instantaneous feedback on your idea (reaction product).
Taking action quickly is vital when you want to get a proof of concept, make pivots based on the market response or have the first mover advantage. But you lose the beauty of the moment if these things happen slowly. Rather than iterative product development, slow action means you have to make assumptions about the wants and needs of the customers. And in entrepreneurship, making assumptions is a dangerous game to play.
But having spent a large part of this year working on The Cricket Effect, I am starting to see that hustling isn’t always that easy. In fact, progress can be ridiculously slow as you work through the bureaucracy and red tape, making every little step a mountain to overcome.
With the current government focused on innovation and an ideas boom, there seems to be a bit of a disconnect between the intention of the current policies, and the reality of the situation. There are so many fees and legal requirements, that getting anywhere is tricky. As a food business, we face importation restrictions, food business registration, company registration, kitchen licensing, mobile food vendor fees, and the list goes on. The hustle to get out our MVP and test the market has been all but completely halted by the over-regulation.
Just like hustle makes thing happen, like an enzyme catalyst, over-regulation works as an inhibitor, in particular, an allosteric inhibitor. In an enzyme catalyst, the reaction happens at the active site, where the two reagents meet, but a second molecule, known as an allosteric inhibitor can come over and bind to the enzyme. When this allosteric inhibitor binds, it changes the shape of the active site, so the two reagents can no longer fit together and react. This slows the reaction right down, and in some cases can even completely stop it.
Over regulation when working in the start-up and innovation space does the same thing. It comes in, sucking out time, money and every ounce of enthusiasm. Those quick ideas have to be moulded to fit with the masses of rules. Suddenly those instant iterations are not so instant anymore, and the investment in every trial becomes significant. For us, we cannot pop down to a market, sell our product, and get feedback. Instead, we have to spend upwards of $1,000 to get the necessary licenses and permits.
One of the special features about allosteric inhibitors is that they can be specific to certain enzymes, with only some enzymes and some reactions being affected, while the remainder are left untouched. So when over-regulation works as an inhibitor, it affects low budget start ups much more than established multi-national corporations. Bootstrapping is an entrepreneurial gem, allowing resourceful action on a minimal budget. It makes new start-ups dynamic and innovative. However, with so much regulation, true bootstrapping is made nigh on impossible with all the fees required. For corporate giants, a few thousand dollars here or there is a drop in the ocean, meaning they are unaffected by these requirements. This means the ‘reaction’ of these huge companies and their products with customers outcompetes the ‘reaction’ of startups with customers, as start-ups are affected so much more. For new companies, this makes it difficult to compete.
Often the best and most disruptive ideas come from outside of the box thinking with a limited budget. But the huge amounts of regulation and fees required in order to comply with legalities means for many new startups, it may not be worth the effort to even try. Although rules and regulations have their place, and exist for a reason, startups are a catalyst for change and rely on hustle. Over-regulation is inhibiting this hustle and may put a stop to an explosion of new ideas.