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Well written, Dani, thanks.

Big companies are smarter than gov't regulators, they understand their business better, and they have a longer time horizon. So when the government comes around to regulate them, they think "OK, how can we turn this into a huge barrier to entry for new competitors?" They have large lobbyist and strategy budgets. They generally win.

The most misregulated industries in the US are energy, medical, and transportation. So there are lots of glaring inefficiencies, but they are there for a reason. Technologists assume the reason is stupidity and that clever inventions can fix things. Frustration ensues.

For your energy storage system, I suggest you target large energy consumers like manufacturing plants. Big ones have access to spot markets. Give them a system to store energy when it's cheap and deliver it to the machines during the daytime. If you can show <5 year ROI, you'll be able to sell it.




This would be my one (minor) complaint with her essay; I think that there is ample evidence in history, even fairly recent history, to refute the deregulatory undercurrent the essay has.

Regulatory oversight is certainly not perfect, or ideal, or even completely beneficial to anyone involved. Unfortunately, it is a necessary evil in any market with a combination of a large enough cost of entry and a captive market in which the majority of customers can't simply opt-out altogether.

Medical insurance is a topical example that immediately comes to mind. Ten people with some resources can't start an innovative new medical insurance company; the costs are just too great. As a result, existing insurance companies have no incentive to compete in terms of price or services, and because a large enough number of people (and businesses) simply have to have insurance, they don't have to worry about their market shrinking too much.

The flap over gas prices a year ago would be another example, and before that, there was California's energy deregulation that resulted in serious problems just a few years ago.


I may need to make some edits to change the tone. I am not against regulation per se, though I am against particular regulations which have perverse negative unintended consequences, as I describe. There are advantages to being in a regulatory climate, and certainly I prefer a business world ruled by law over anarchy.

I think that medical insurance here in the USA is particularly bad. Nationalization is also bad, but relatively superior, I think, lowering costs for everyone and improving care in the final analysis. Medical care, and insurance in particular, could be orders of magnitude better, but only if customers actually care about medical insurance. It's not exactly a treasured consumer choice. If health insurance and medical care were rolled in together, and marketed as being about healthy lifestyle choice, then you could get people to take notice. Kaiser Permanente accomplishes some of these goals, but is rather monolithic, and doesn't go far enough.

I've thought about trying to fix health insurance too. Another dramatically huge problem with huge barriers to entry. But maybe there could be a Yelp of health insurance that I could get people to care about. It was one of the 'alternative ideas' I had for that particular YC interview. Telling the partners raised the predictable eyebrows!


I also took some issue with the tone of your essay, which I found interesting overall. Though I agree with you (who wouldn't?) that regulations that have perverse unintended consequences need to be fixed, and I guess the question is how to make the framework more nimble and less vulnerable to capture by whoever is benefiting from the existing regulations.


Thanks. I'll think about this.


I'm sure the cost of entry for medical insurance (and pretty much every highly regulated industry) is dominated by costs imposed by regulation.


You've nailed it, Trevor. This is probably our first market -- with a few twists of our own! :-) We have to sell to a customer that can either profit by the savings, or is using batteries now but cursing the technology. Otherwise we will go bankrupt out of frustration as we wait for people to stop sitting on their hands...




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