The real legal question for your startup

In France, we love to complain how Google, Airbnb or Uber aren’t French companies. Reasons are numerous but I’ll look at this issue from the point of legal regulations. Specifically, how companies can find themselves pioneering a new sector both commercially and legally.

As a startup, especially at a very early stage, you have to take shortcuts. Because time and money aren’t on your side, you might decide to only focus on specific customers and to answer a small part of the problem. That’s a fine way to do things at first.

Advice and feedback are something you get quite a lot. Avoiding legal troubles is a recurring theme that concerns competitors, taxes and — especially here in France — employees. If you’re doing something new you’ll end up hearing things such as: “You don’t have the right insurance for…”, “The licenses you’re using don’t cover this”, “Only those business have the right serve this need”, and so on.

I firmly believe businesses creating value are the ones to succeed. Yet it can happen to be in a grey zone: Where the rules aren’t clearly defined for your business or where you’re going a bit too far. This can actually bring some advantages.

Keep in mind you’re not a normal business. Your goal isn’t to get better, it’s to find something to be good at. In the first stages, you’ll need to save time wherever you can. Getting in the grey zone can help you avoid loosing time being “legally perfect”. If you happen to find the right business model, you’ll be able to fix the issues. In the more likely case you fail, you’ll be glad for all the time saved.

Knowing where the rules and regulations came from also means a lot. We’re all struggling to innovate in some part of our business. Yet regulations are voted years or even decades after the birth of a new sector. If you’re perfectly following them, it seems like a bad news for how a precursor you are.

Of course, you shouldn’t stay in this grey zone forever. A good rule of thumb would be to get out once you’ve found your product / market fit. The biggest and most controversial startups out there obviously try to make regulations fit their new way of thinking. But I’m guessing you’ll need to have great financial support before going down that path.

Originally published at antoine.finkelstein.fr.