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posted by CoolHand on Friday April 17 2015, @11:43AM   Printer-friendly
from the bow-to-our-capitalist-overlords dept.

A Venture Capital firm says techies need to get along with government:

From Airbnb to Uber, some of Silicon Valley’s most successful companies have been fighting regulators since their inception. Now, one of the tech industry’s most respected venture capital firms wants to help both sides of the battle make nice with each other.

Andreessen Horowitz announced today that it’s launching a new policy and regulatory affairs unit, and that it has appointed Ted Ullyot, Facebook’s former general counsel, to lead the shop. Ullyot, who worked at both the White House and the Department of Justice before coming to the Valley, will be tasked with helping the firm’s portfolio companies see eye to eye with the government regulators with whom they’re increasingly butting heads.

Well, what do techies say, agree with the VC or string them up by their toes and poke them with sticks? Inquiring minds want to know...

 
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  • (Score: 2) by Phoenix666 on Friday April 17 2015, @02:29PM

    by Phoenix666 (552) on Friday April 17 2015, @02:29PM (#172049) Journal

    The examples of Amazon and eBay are good instances of not playing by the rules. They stepped outside the legal regime that governs their competitors. Brick-and-mortar stores have to pay rent & sales taxes, comply with local regulations when siting their stores, etc, etc. All those things constitute a high barrier to entry for new competitors. Did they technically break the law? No, but neither did the established players when they captured the regulators and set the table to suit themselves.

    Take another good, current example. Tesla is selling its cars direct to consumers, without going through the dealership system as do their competitors. Many states, as chronicled through articles here on SN, have taken to banning Tesla sales because they are disintermediating the dealerships. Now, I love Tesla, and love that they're being disruptive, but they are doing it by "breaking the rules." And because they are sidestepping the government and regulatory infrastructure that has long been bought and co-opted by established players, they are encountering the blowback the VC in TFA was wringing his hands about.

    So I return to my original thesis, that you cannot become the kind of successful company the VC from TFA would love to have invested his money in without incurring blowback from companies/players that have thoroughly gamed the current system.

    Once in a very rare while you'll have an Eastman Kodak whose business model will evaporate overnight, but had there been a single player, a startup, whose digital photography had been responsible and whom they could have sued into oblivion, you can bet they surely would have.

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  • (Score: 2) by Thexalon on Friday April 17 2015, @03:13PM

    by Thexalon (636) on Friday April 17 2015, @03:13PM (#172067)

    Aha, I see: You're talking about doing something different than their competitors. I was thinking you meant "Deliberately trying to avoid government-mandated responsibilities" (there are definitely businesses that do that, e.g. Uber). I take it "breaking the rules" is a catchphrase that means "Don't assume your competitors have figured out the best way of doing something".

    Engaging in regulatory capture to try to prevent an improvement in an industry is a rearguard action that is usually doomed to failure. For example, if somebody in a state that doesn't allow Tesla sales really wants to buy one, they can have somebody they know in another state that does allow Tesla sales to buy one, then drive it to the state they live in (it's legal to own a Tesla, just not buy one direct from Tesla). Or, if there were a critical mass of potential customers in a state which requires a dealership in order to sell a car, they could set up a single dealership which was more like a depot than a retailer, offer home delivery on similar terms to their online sales, and then pay people to drive the cars from the dealership to the customers, which is still much more efficient than having dealers all over the state.

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  • (Score: 2) by frojack on Friday April 17 2015, @08:57PM

    by frojack (1554) on Friday April 17 2015, @08:57PM (#172192) Journal

    Tesla avoids dealerships, but doesn't avoid warranty issues, safety regulations, or other state laws.

    If you live in a dealership required state you can still buy a Tesla. But you have to take delivery outside your state. You can visit a showroom in some other state. (Actually I believe Tesla showrooms are legal anywhere, you just can't place an order there, but they can hand you the paper work, you can mail it in or do it over the internet.)
    Some states go so far as to limit free speech by outlawing discussion of price.

    You can meet the delivery guy 6 inches outside the state border.

    Someday the state will realize the sales tax they forego protecting dealerships isn't worth losing.

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    • (Score: 2) by Grishnakh on Saturday April 18 2015, @02:22PM

      by Grishnakh (2831) on Saturday April 18 2015, @02:22PM (#172412)

      Someday the state will realize the sales tax they forego protecting dealerships isn't worth losing.

      How are they forgoing sales tax? Sales tax is based on your residence, not where you buy something. Try buying a car out-of-state and you'll find this out very quickly.

      If you buy a car out-of-state and don't pay sales tax, you won't be able to register your car in your state of residence. You have to pay the tax at the time of registration.

      • (Score: 3, Insightful) by sjames on Saturday April 18 2015, @09:26PM

        by sjames (2882) on Saturday April 18 2015, @09:26PM (#172588) Journal

        SOME states structure the tax so that it's owed for out of state transactions, others not.