The next wave of the digital economy is upon us and will inevitably take entrepreneurs to harder and harder industries, where enormous financial returns are theirs for the taking. The way growth hacking was the mantra for yesterday’s entrepreneurs, regulatory hacking will be the new tool of the trade for the digital era.

1. Regulatory Hacking

2. Growing Your Startup

4. • Growth hacking is a marketing technique using data, automation and viral
mechanics to grow products / users / revenue.
• Growth hackers focus on low-cost and innovative alternatives to traditional
marketing to acquire new users, retain existing users, increase revenue per
user, improve customer happiness and make their products sticker with their
users.
• The goal of every growth hack is to build a self-perpetuating marketing
machine that reaches as many customers as possible.
• Growth hacks can be product-driven or creative channel hacks.
What is Growth Hacking?

5. • Traditional marketing focuses on choosing target markets, setting pricing,
selecting distribution channels for reaching customers and implementing
promotional strategies. In an industrial society, traditional marketing worked
extremely well.
• But the Internet has given the world a new kind of product, which enables a
new kind of thinking.
• For the first time, because of the Internet, a product can play a role in its own
adoption. Product features can now be directly responsible for growth.
• Some of the most widely known success stories of growth hacking are
technology-driven hacks.
Hack: The Product

6. The same Internet that redefined the role of product in driving growth has also
provided an online infrastructure and created massive opportunities to hack
distribution and uncover untapped acquisition channels.
Hack: The Channels

7. Dropbox spent little on marketing, yet built a
$4B company using product-driven hacks
through:
• A signup-driven homepage;
• creative referral strategies (one Dropbox
user refers another, and both get 500MB
increases);
• and incentives for users to drive social
traction (with each follow on Twitter,
connect on Facebook or Twitter, Dropbox
gives users a 125MB increase).
Hack: The Product

8. Airbnb offered users who listed
properties on Airbnb the opportunity
to post them to Craigslist as well,
(despite the fact that there was no
sanctioned way from Craigslist to
do so) leveraging bots and reverse
engineering to reach Craigslist’s
massive user base.
Hack: The Product

9. Groupon integrated a 24-hour
ticking clock into its product and
the 500-person tipping point
helped to spark the viral feeding
frenzy for its deals.
Hack: The Product

10. Hacking: Engineering Meets Marketing
Engineering Marketing
Growth Hacking

11. A google search of “growth hacking” nets 25,500,000 results.
Link after link gives examples and ideas for hacks:
• The 6 Best Growth Hacks to Get Customers
• 21 Actionable Growth Hacking Techniques
• 13 Hacking Techniques You Can Apply
• 43 Ways to Drive Traffic to Your Website
The curious entrepreneur can find hundreds of examples of product- and
channel-driven hacks with a few keyboard clicks.
Examples Abound

13. Where’s the Hack for This?

14. In many countries, government touches nearly every aspect of our daily lives:
the groceries we buy, the restaurants we eat at, the roads we drive on, the
houses we live in and even the showers and toilets we use. If you feel like
government is increasing, you’re not imagining it.
In the United States:
• From 1789 to 1997, the federal government added about 4,000 new
regulations each year, but after 2007, the number skyrocketed to nearly
13,000 new regulations per year.
• The Code of Federal Regulations now includes over 1 million instances
of “may not,” “must,” “prohibited,” “required” and “shall.”
It’s All Regulated

15. Trajectory of the Digital Economy: The
Further We Go, The Harder The
Problems Get

16. • Technology is transforming every part of the economy. Beyond social
media and e-commerce, advancing are coming to the next wave of
industries like education, energy, health and urban infrastructure.
• The lion’s share of large-scale opportunities for entrepreneurs and
investors lies in industries where government inevitably plays some
role — especially as you consider how government sets the rules for
just about every aspect of our global economy.
• The next wave of the digital economy is massively larger but far more
complicated because government is already involved.
• Is there a way to growth hack in markets like health, education, cyber,
energy, finance, transportation and cities, food and agriculture?
Can You Hack a Regulated Market?

17. Regulatory Hacking
Engineering Marketing
Regulatory
Hacking
Public Affairs
($3.2B)

18. Carbon Monoxide Alarms
How do you create demand and convert
interest to sales when customers don’t
know they need your product?
Regulatory hacking:
• Geopolitical analysis / selection of
highly favorable cities;
• regulation change (with tie-in to
patent protection);
• media campaign;
• and Home Depot partnership.

19. Supplemental Education Services
How do you pursue a new market
created by new government funding?
How do you drive sales when individual
families don’t know your free service
exists?
Regulatory hacking:
• Low-cost, local grassroots networks
typically mobilized in election
campaigns to go door-to-door,
explaining the SES program and
signing customers up on the spot.
The government made new money
available to private sector education
providers through a tutor program
free for families in under-performing
districts. Through government
mandate, a new market opportunity
was created and vendors went after
it.

20. Ride Hailing Service
How do you scale in a government-regulated
monopoly market that is desperate for
innovation (when you know “asking for
permission” would kill your company)?
Regulatory hacking:
• Do an end-run around existing industry
regulations;
• build extraordinarily loyal customers
willing to serve as advocates;
• and eventually force regulatory change
to become the norm.

21. List, Find and Rent Lodging
How do you respond when governments
impose regulation that impedes your ability
to deliver your service?
Regulatory hacking:
• Airbnb spent over $8 million battling
Proposition F in San Francisco. Beyond
paid lobbying and other tactics;
• 138,000 members of the Airbnb
community knocked on 285,000 doors
and had conversations with over
105,000 voters to defeat Prop F.

22. Virtual Reality
How do you proactively educate
lawmakers so they don’t craft legislation
that impedes your ability to scale?
Regulatory hacking: A virtual reality
company called Magic Leap — which
hasn't even started selling its product yet
— has hired a group of lobbyists in
Washington, D.C., aiming to educate
and sooth regulators who may find its
futuristic technology unnerving.

23. Energy Efficiency Software
How do you get utilities to embrace
energy-efficient technology when
consumers aren’t yet demanding it?
Regulatory hacking: OPower took a
thoughtful approach, systematically
working with city-level utility agencies
and Texas’ state legislature. The newly
passed legislation created utility demand
and uniquely positioned OPower to sell.
Rather than use an end-around strategy,
they worked within the system to drive
change and energy efficiency.

24. Government as the Customer
How do you rapidly scale state-and
local-government sales without having to
build a massive sales team?
Regulatory hacking: Because of
government’s cuatious and slow-moving
nature, a grasstops approach is often
the fastest strategy. Leveraging
influential partners, investors and
customers to make introductions to
governors, mayors and agency heads to
then drive sales using a top-down
strategy.

25. • Power Mapping
• Grasstops Activation
• Influencer Activation
• Advisory Network
• Grassroots Activation
• Coalition Building
• Public Relations
• Lobbying
Regulatory Hacking Toolkit

26. The regulatory hacking strategy for
every company will be different. The
key is finding the levers that will
accelerate growth.
In some cases, the best strategy for
scaling is directly engaging with the
government and influencers and
leveraging them to drive growth.
In other cases, going around
government, breaking rules and
forcing change from the outside is
the only way to drive scale.
Offense versus Defense
(or…permission versus forgiveness)

27. Hacking Regulated Markets to
Drive Scale
Airbnb’s Regulatory Hacking
Moment
Welcome to the World of
Regulatory Hackers
More Information

28. Yesterday we needed growth hacking.
Today we need regulatory hacking.