When I was a kid, my brother and I subscribed to Zoobooks. I read every word of every issue for the entire year. The animals that impressed me most were those which have “no natural predators.”
I think this is a great way to think about startups. Can you fit into an ecosystem and make it work better, without picking any fights with existing organizations? If so, you may have a winning formula. If not, you may end up like the peer-to-peer lending industry.
As Melody at Transcapitalist has chronicled, the SEC has repeatedly forced these companies to spend millions on “compliance” just to get started. It’s been so bad that a new regulatory body – something that would send shivers down the spine of any just about any lender – was actually welcomed by the P2P players.
Jay and I have been committed to developing a business with no natural predators since before we were Stik.com. We explored many more radical versions of our business, including an online-only mortgage brokerage staffed by a network of graduate students who would provide something closer to ‘customer service’ than ‘sales’, but we ultimately decided against it. Not only are capital requirements prohibitive for first-time entrepreneurs, but I have watched Redfin long enough to imagine what nasty things would have been said about that company.
Instead, we decided to focus on identifying people whose interests are naturally aligned and connecting them in a comfortable medium. We empower both the companies and the consumers we deal with, we threaten nobody, and at least for now there is no Federal Bureau of Introductions.