Rules of Life #4 :
Willingness to Break the Law is both a Tactical and a Strategic
Advantage
Anyone who has courted investors, whether raising capital to
start a new venture or soliciting investment in an ongoing enterprise knows
that one of the most fundamental considerations as to the value of a business
is whether there are "Barriers to Entry" which will effectively
prevent or at least limit competition.
The shibboleth of the law is such a barrier. For example, no business could be easier than
selling illegal drugs. Buyers will seek
out the seller, pay any price, and return again and again no matter what the quality of
the product. No advertising, no
promotional effort, and no quality control are necessary. The only thing that allows the seller to
command high mark-ups, often in excess of 100% to 150%, the only thing limiting
competition, that is, is the law. Most
people are too afraid of the consequences of getting caught to follow such a
career. Those too timid to break the law
can only sit on the sidelines and watch with envy as the courageous rake in
fortunes without any serious effort or skill.
Similarly, anyone with a two-bit piece of software developed
for a smart phone can take on an entire existing industry which is itself bound
by laws and regulatory bodies, capture their business, ruin them, and condemn
their workforce to unemployment: governments,
whether municipal, state, or federal, refuse to enforce the law against new
companies that use mobile phones connected to the internet to effect
transactions formerly effected in person, by correspondence, or by
telephone. Shortly after I began my
career as a stockbroker in Manhattan, businesses began using a new technology, "fax
machines" to send documents over telephone lines, rather than sending them
physically through the mail. For a while
we were forbidden to accept a fax in lieu of a signed document; then we could
accept a fax and act on it as long as we
were assured that an original was to follow by mail immediately. Finally laws were amended to allow us to
accept a faxed document as if it were an original.
Such coy legalities are ancient history now. New companies blithely violate all manner of
laws and are allowed to proceed by acquiescence on the part of government. Today I heard on the BBC an interview with a
man who has started a business transferring funds among countries all over the
world, completely circumventing existing financial institutions by charging
money against one mobile phone and crediting it to another. If you thought the "mortgage
meltdown" of 2008 brought the international banking system close to
catastrophic failure, wait until money moves freely around the world without
paying any fees.
No business or industry is immune to this threat of outlaw
internet raiders. It began, so far as I
know, a couple of decades ago when Napster destroyed the recording
industry. How quaint that its founder
had to face trial and eventually punishment for violating copyright and other
rights belonging to an artist. Nowadays
piracy, theft, corruption, and all manner of lawlessness are de rigueur for any young entrepreneur.
Don't be a sap: if
you want to succeed, turn to crime. After all, why be a man when you can be a
success?*
After all, with enough money, you can easily get away with
murder -- just ask O.J.
* I have seen this
rhetorical question attributed to Bertold Brecht, but cannot cite a specific
source. Note that the word for man in
German is "mensch" and that it denotes not just a gender but a noble
sense of righteousness and honor as well.
That sense, though largely lost from the English word, survives in such
phrases as "be a man about it" or more currently, "Man up!"
