Is the Market Regulated

Regulated Markets (1)

It’s an interesting fact that many of the largest markets in the world are largely unregulated. Other, much smaller, niche industries are often the subject of intense scrutiny. Its important to understand on which side of the spectrum your venture lies. As an example, I’ve been involved in the start-up of social media software and website platforms that were the subject of zero degree of oversight and regulation. On the other hand, I’ve started-up an airline that operated in an industry with the highest degree of oversight possible. Managing those two businesses require two completely different strategies.

You may be surprised to find out that its much easier to launch a hedge fund than an airline. Starting a hedge fund is pretty easy. You need to incorporate, you need to find some money, and you’ll need a trading platform. That’s pretty much all there is to it. An airline, on the other hand is subject to regulations from day one and the government, in some way, shape or form, has an interest in every business decision you make (on a daily basis). While regulations can be a barrier to entry, benefitting those already in the market, by nature they are there to create headaches. If you are going to operate in a highly regulated environment, its likely that most of your vendors and partners in your network do not know the full of extent of the regulations and requirements applicable to your specific niche.

Thumbs UpTry this: Make sure all partners know that you’re subject to certain constraints. They need to understand that your performance may be limited due to certain structural elements in place.

 

 

Thumbs DownAvoid this: Don’t assume that the regulations in your business are nobody’s business but your own.

 

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