in Big Ideas

You are supposed to break the rules

Great entrepreneurs truly do not care about the rules.

If you haven’t noticed, there are a lot of rules.

Some come and go with the times, others never seem to go away:

  • You are supposed to dress a certain way
  • Finance your company this way
  • You pitch deck should look like THIS
  • You, in your industry, with your product, it’s not the way it’s done

And there are the big rules, the regulations:

Great companies are built by breaking rules. We call them ‘norms’ but they are rigid and they feel real until someone destroys our idea about ‘how it’s done’.

  • Marc Benioff decided to sell software as a service when everyone believed they had to install software on premise
  • Steve Jobs built expensive but beautiful machines when every other hardware company believed they had to be cheap.

and so many more.

And it’s happening, there are more great stories of breaking the rules and the amazing companies that result:

  • Figure1 is breaking the rules in Healthcare
  • Wattpad has done away with not only publishers, but with most of the old creative process

Who else comes to mind?

Sometimes a pure rethinking of technology can completely rewrite the rulebook. Bitcoin is readily looked at as an alternative to fiat currency, something that was unthinkable before a purely electronic currency was conceived.

Breaking the rules goes by many different names like ‘disruption’ and ‘innovation’ but they all start with someone rethinking an old way of doing business. When we look back on what they’ve accomplished we often like to call these rule breakers ‘clever’, ‘brilliant’ or ‘strategic’. The truth is that they didn’t get ahead by adding complexity, or navigating what existed. Most of the time they were able to get ahead by pushing aside the rules and focusing on the opportunity.

The rules almost always come to mind later.

As the world becomes more and more ‘wired’ I believe that startups will run in to regulatory hurdles more and more often. Like uber, AirBnB, Lyft and others, the rules sometimes represent a massive opportunity to create efficiencies in a place everyone else thought was off limits.

There are little rules, and there a big rules. No matter which stage a company is at, it’s the rule breakers who get noticed, they are the ones who crack a market open and feed off the the plump center.

  • http://www.pckip.com Bob Stratton

    I agree with much of the discussion above, but remember that there is selection bias going on. Each of the examples given is a success, but there are many, many startups not mentioned who failed BECAUSE they broke one or more “rules” that they shouldn’t have. The real trick is knowing what rules can be broken and when and by whom.

  • http://www.canuckseo.com/ Jim Rudnick

    So…I’m a believer in the #disruptTech movement…but care to comment Jevon on something like the #jerkTech reaction to the SF reservationhop.com startup? Me? Love it, but not so much for others it appears…

  • François Villeneuve

    Rules exist for reasons. Before breaking the rules, investigate why they exist, and who they favour. But don’t just say “oh these guys have a monopoly because of these rules”. Often, monopolies are given to mitigate anti-social market effects, like AirBnb making 2BR-3BR apartments scarcer and more expensive for low-income families to rent, in cities where it has a large presence. I love AirBnb, but it’s a business that already has perverse effects by breaking the rules.

  • http://startupnorth.ca Jevon

    It’s a balance. I think the social contract is what is interesting, and usually obvious. Uber for example, does not elicit divided opinion. Reservationhop however splits the consumer in to winners and losers.. and I think that is the first sign that the rule of law isn’t important, but the net value to society…

  • http://startupnorth.ca Jevon

    yeah, I agree: Don’t break the rules AND lose… then you are just a plain old rule breaker… :)

  • http://architectthiscity.com Brandon G. Donnelly

    Out of your list of big rules, only the MLS does not have a formidable disruptor…

  • dwanguard

    Dear Mr. MacDonalds I could not agree more with you.

    Innovator are very well aware of that, one they don’t are not innovators.

    For innovator it is natural to look for solution others would not, in order to improve.

    All the rules you mentioned are not introduced by entrepreneurs. So who is filtering out the innovation?

  • http://startupnorth.ca Jevon

    I love Viewpoint and hope it can find a way to expand across Canada at some point. Zillow has disrupted in the US to some degree, but they have stayed within the rules for the most part.

  • http://www.procurify.com/ Procurify

    Cheers to the rule breakers; the ones who are brave enough to try something different!

  • John Rugamas

    Yes, as the old saying goes, ” You have to know the rules, before you can break the rules.”

  • Gil Katz

    Not all rules are the same. There are good rules (pro-human) and bad rules (emm). Some innovations actually breaks the good rules, but others break the bad ones. It’s just very subtle.

  • jdbegin

    Thanks for pointing Viewpoint: interesting! Looks like they are playing the rules though, similar to Suitey in NYC: Licensed Realtor 2.0. Hope indeed that they expand across Canada

  • http://forewardsapp.com/blog Jason Dea

    While personally pretty agnostic with rules. I understand why they must exist, and I’d rephrase the hypothesis a bit.

    Don’t go breaking the rules for the sake of breaking rules. That’s what teenagers do. As much as I’d love to have my teenage hairline back, never in a million years would I want to be one again.

    Follow your passion, but don’t let the rules get in the way. I think that’s a better way to phrase it, and the examples you cite can all fall into that scenario. Are you passionate about changing a small part of the world with your startup idea but traditional funding vehicles won’t support you… don’t let that rule stand in the way, find another route. Passionate about eliminating xyz ubiquitous terrible technology or process, don’t let the existing rules stand in your way.

    Passion is the foundation of all great disruption, whether societal, political or technological…