Disruptive Business Models/Challenger Businesses
We understand that new business models – particularly those that involve doing things differently – may fall foul of regulations that were intended for another age, or for another purpose entirely. We want to ensure that our regulatory system is fit for purpose, and is not holding back disruptive or challenging new companies.
So, we’re using this Red Tape Challenge theme to source experiences from you – the entrepreneurs, investors, and businesses – who have run into problems setting up an innovative enterprise that does not replicate other established business models, or ways of working.
Share your experiences below, we’re particularly interested to hear…
- What was your experience of setting up a new business model?
- What specific problems did you run into?
- What were the rules and regulations that got in your way?
- What part of the system held you back?
If you want to share your experience privately, then you can comment through our private inbox here.
I have been in the property marketing Industry since 1986. 15+ years ago agents worked together and would offer sellers and landlords greater exposure by networking a clients property to other local agents. This use to work pre pc’s via a paper list. We saw an increase in sales and lets and clients were happier as although the fee was a little higher t multi list ofetn they would have more buyers or tenants combined to choose from.
In estate agency for 15 years property data has been able to be shared amongst corporate estate agencies who created the rightmove standard UK feed. Independent agents today use typically 1 of 50 odd softwares that are not interoperable. As such agents have been restricted in offering only sole agency, and as portal prices get more expensive many agents are struggling to give full portal coverage.
Although private sales models could appear beneficial, most main portals refuse private seller listings.
To overcome the above my company [Edited Text] has replicated through technology and additions to the UK property feed structure to allow data to pass from one agent to others who may use other software solutions.
I now have working case studies where [Edited Text] technology is linking more agents to gain sellers and landlords greater reach via more agents to more buyers and tenants.
Our system is similar yet a different data structure to the US and Canadian MLS (multilist models) which 1.2m realtor real estate agents use.
Even private sales sites us the now dated rightmove schema which makes any FSBO site dated before it starts. I am more than happy to demonstrate what we have.
Due to our model being disruptive we have faced backers being warned not to back us, plus as a small fish we dont have the funds that large portals etc have.
Our model achieves: the ability for an agent to offer buyers more local properties from other local agents, The ability for agents to do more to help sellers and landlords, the ability to throw data about as not seen outside our case study agents which current portal models or private sales models are unable to do.
The model we have could power a full UK agents property network and allow all agent softwares to finally become interoperable. So far we have invested around £400,000 in R&DComment Tags: A better model using multisource data feeds for selling and letting property through estate agents
HMRC does not seem to know how to deal with a Company Limited by Guarantee on its online reporting system. I am the chair of the North deal Community Company ltd. We are a charitable organisation and the site does not let us report successfully either as a charity or as a business.Comment Tags: company limited by guarantee
As a consultancy, we advise on ways to harness natural processes and human activities to manage our coastline, estuarine and marine environment and, furthermore, how to harness their economic potential to regenerate coastal communities and the environment on which their economy and many of their employment opportunities depend.
Before we can suggest any more innovative and widely beneficial solutions , let alone instigate a pilot trial, we have to persuade,not only the local planning authorities, but the Environment Agency, Natural England, the Marine Management organisation and often other government bodies that we have ticked off a long list of often irrelevant factors, as well as convincing them and their advisers and the many consultancies they need to employ that the risk to the environment is insignificant beyond doubt. Rarely do they feel confident that they have the expertise or local knowledge to make decisions themselves and by employing external consultants they can absolve their organisation of any liability should their decision be proved wrong.
Whereas the benefits of such more innovative and holistic approaches, which are widely used in the rest of the world, to local and national governments could be substantial, none of the above has any incentive to say “yes” on their own account. As several of the Senior Staff in the Environment Agency and Natural England have observed to me, if they were to do so and the project was to go wrong, their career would be at risk, as would the reputation of their consultant advisers, whereas, if they say “no” they can often be praised for preventing an imaginary disaster or for saving the Taxpayer money.
History has led to our coastline being one of the most over-regulated sectors and a multitude of different agencies have grown up over time with different priorities, all of which tend to be listed in subsequent legislation as mandatory consultees. Each has a very narrow sphere of responsibility and terms of reference, which preclude them from taking a more holistic and sensible overview. All are bound by EU Directives to apply the “Precautionary Principle” if there is a trace of doubt or to demand very costly Impact Assessments which rarely contribute to a reduction in risk.
Neither the Agencies, nor their advisers seem able to work together to take a more balanced and objective overview and the cost to the government ( or sometimes the applicant) and coastal economies of having so many people involved is disproportionate to the generally very small risk.
The solution to this has been evident for decades. As has been common place in the commercial world, for example for quality and environmental assurance -allow all those qualified and certified to do so (e.g to ISO 14001) to self-certify compliance with environmental regulation and make their directors criminally liable for any infringement, just as they are for many other regulations. They would have to get themselves approved and be audited regularly as to their procedures to ensure compliance and and audited regularly by experts as to the record and evidence of doing so
They would have every incentive to find the best advice to ensure they did not infringe the regulation but would have the freedom to find the most cost-effective and widely beneficial solution. They would be far more knowledgeable about the real risks most likely to occur and able direct their time and resources to managing them, rather than having to satisfy a succession of “top-down” regulators, none of whom has sufficient local knowledge to make any sensible judgement or can spare the time to be present during the critical risk phases of the project, as they are implemented.
Not only would the saving to the Government and licensees be immense, but the contractor’s risk management plans and resources could be focused on the real risks rather than having to employ a consultant to assert – often with no supporting evidence – that a whole load of “tick box” areas need not be of concern, when in truth they are often just irrelevant and fail to include the most important.
It is not surprising that coastal engineering technologies appear to have advanced so slowly. It has become alarmingly over engineered and carbon intensive and, as a result costs have risen 6-700% in real terms over the last two decades.
Rather than rationalise the regulations, the key is to rationalise the regulators and devolve the decision-making to the local authority expert , switching the role of central government agencies from regulator, essentially a negative function, to researching more innovative technologies, spreading best practice a providing advice as and when asked..
In other word just implementing the avowed Coalition policies of localism, merging/disbanding the Quangos and cutting red tape.
As a Turnaround Manager it is blindingly simple and if you want make savings and real impact in a short time there is a very simple guide to apply:-
– Challenge every government employee to prove they are making something positive happen and, if not demand that they switch their priorities to do so, transferring the responsibility for ensuring regulatory compliance to those responsible for the actions under regulation.
The result would be almost immediate and enormously powerful across the whole UK economy but as many leading academics have recognised it needs such a change of mindset to reap the benefits to our economy and government expenditure that are so urgently needed.
from believing the that our marine environment is best “coated in aspic” to recognising that its so called “ecosystem services” have much to offer our economy and that can fund the sympathetic management and good husbandry , not only to make it more productive but to foster biodiversity too.
Farmers have long recognised the importance of preserving some hedgerows, whilst they do their best to feed the world by managing the rest sustainably. The same principle applies not only to the marine and coastal environment but to the many new areas coming under regulation. The knee-jerk reaction is to employ more civil servants to check up on people, whereas the more sensible way forward is to devise ways to introduce certification to international standards for those undertaking the activity and to ensure that their self-regulation is overseen and audited by expert commercial specialists.
As it happens, the same principle can be applied to care homes, the NHS, schools or social workers, to health and safety, and many other sectors. It might sound to the general public to be a higher risk strategy but the truth is quite the reverse and it would make radical difference to the performance of every UK institutionComment Tags: Localism, Rationalising Environmental Regulators
I wish to set up a business breaking desktop PCs for reclamation. A business model that is beneficial to the environment and reduces waste. The exact opposite of a ‘polluter’
I have been told by the Environment Agency that permits required will cost £2000 or more. A prohibitive up front cost to doing business.
This is charged under what is known as ‘the polluter pays principle’
“In environmental law, the polluter pays principle is enacted to make the party responsible for producing pollution responsible for paying for the damage done to the natural environment” http://en.wikipedia.org
Yet this is applied to non-polluting industries – even those who seek to reduce pollution locally and replace harmful practices worldwide.
A FOI request revealed the the EA charge £50 per hour to administer a government sanctioned bureaucracy.
My personal experience of the EA stems from their scandalous handling of an incinerator run by [text deleted] burning tyres and solvents. They were caught repeatedly cutting corners and falsifying emissions data at the pilot stage. Despite this and strong objections from the local citizens, they were granted a full and extended license to continue burning. Andrew Murrison MP knows the details of these incidents.
The EA reps during public consultation sounded like PR reps for [text deleted]. Stating…
The often reported and photographed plooms of black smoke were ‘a trick of the light’
Kilograms of mercury and other heavy metals would not bioaccumulate in the local area.
A study into frequency of asthma attacks at a local (downwind) primary school was dismissed as ‘anecdotal evidence’
It seems that once the EA tax is being paid, they will turn a blind eye to pollution, fraud and when the public object, science itself. And if fees are not paid they will unleash their solicitors and secret policemen to crush hard working citizens.
When this sort of thing happens outside of the public sector, it is called a protection racket.
I have no objection to the polluter pays principle and place more value in the ecosystem than my own personal wealth. My problem is with the way environmental protection has been used as an excuse to levy up-front tax upon start-ups whether they pollute or not. This is in turn discredits the aim of environmental protection in the eyes of the population.Comment Tags: environment agency, polluter pays priciple, protection, racket, recycling, weee
My company is small company developing new medicinal products and is finding it very difficult to navigate the so-called “Valley of Death”, the time between developing a medicinal product and having a license to market the product. New medicines absolutely must be safe, effective and made to the correct quality but the cost to overcome the regulatory hurdles and the 10 or so years required is now such that it has created an enormous barrier to development. Public money is spent on funding Universities to develop new science, public money is spent on creating the regulatory tests that need to be met and public money is spent on eventually paying for the therapies. In between private investment is expected to take the risks to develop the ideas and satisfy the regulators and then to gain their profit from the NHS or other providers, assuming eventual licensing and reimbursement of the technology. This system just isnt working in this economic climate and in a world where investors have other places to put their money with more short term return. It is good that the Govt is taking steps to address thisissue, but those steps need to be bold and quickly implemented in order to create a whole new disruptive business model for the medical products industry.
Many Internet businesses, like my own, fall foul of the the Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011. We’re supposed to get consent before setting cookies. How exactly are we supposed to do that? Do you want a situation where every website you go to has a ‘cookie consent’ page, where you don’t get to see any content until you’ve clicked a link to say you agree to cookies being set? Or would you rather this type of business simply wasn’t run from the UK?
What is really frustrating is that the ICO site has a bar at the top of the screen where you can opt in to cookies, and the suggestion is that this approach could be used on other sites. Unfortunately as a public sector organisation, the ICO isn’t subject to the same constraints as for-profit companies. For-profit companies have to know where all their visitors come from and what they do, or they can’t know whether their advertising is effective. Remember, our competitors outside the UK absolutely will have this information.
It looks as though many businesses will end up ignoring these stupid regulations, but that’s just not good enough. Businesspeople deserve to be able to operate within a sensible legal framework.
My issues relates to why Car Insurance companies can’t be flexible to allow a notation on someone’s insurance policy to allow them to carry/move/deliver something for profit. ie: A type of part time delivery driver.Comment Tags: courier, insurance
This might not be disruptive as possibly some of the examples you give…
But.
I was a self employed manufacturer of electronics. The disruptive part is the need to comply with, in particular, the WEEE and RoHS directives.
WEEE – This is calculated on how much you sell in a year, to an accuracy of 2 tonnes. I worked out I have sold, in 20 years, about 900kg of electronics. Common sense would suggest that I am exempt, nope! The weight requirement would lead you to expect anyone producing less than 4 tonnes would be exempt, being that this is the error of +/- 2 tonnes, nope!
RoHS – The banning of lead in solder used for HAND soldering was stupid. I know how to solder, I have soldered possibly millions of joints, but I can’t solder with lead free solder. The real significance of this statement is that modern electronic components have vanishingly small lead size and spacings. I can just about do 1.27mm spacing with lead solder, most new microcontrollers go down to much less than 1mm spacing. I can’t see it, let alone solder it. I am happy to compromise with what I can cope with. I would also be more than happy to pay £100 kg fo rthis lead solder. Why? Well, I use 0.4mm diameter and a reel contains a lot, certainly enough to last me a couple of years at my peak output. The obvious comment is that there is really, really, not much lead in my products!
What is needed is for the various agencies policing this to be shaken up, if not closed down, and some realism introduced. Now, using lead solder is an offence, and the little grey men will prosecute, they don’t care, their income and pensions are assured, mine aren’t.
I sound bitter, what a surprise, I am in the middle of a two year run in with the planning department who also don’t seem to understand anything but execising their power.Comment Tags: WEEE RoHS
(deleted text)
I would like to bring to your (deleted text) attention a potentially grave waste of public funds, and
would ask you please to try to understand the precise meaning before dismissing it ‘out of hand’
as something already (very much) ‘in hand’. Have I your attention and focus?
The problem is how business support is being delivered (and charged for) to UK SMEs.
The problem is not the ‘what’ but the ‘who’.
OK
Having a reputable and creditable firm of accountants administer the scheme is fine (as long as
they charge low fees).
NOT OK
Having ‘in house’ (so called) advisers (or whatever their title) to meet with a prospective
candidate for Govt. funded support.
Problem – the money is being wasted, time of prospective client is being wasted, and the link
between disgniosis and solution/intervention being weakened.
The visits should be made by registered independent professional business consultants. This model
worked well in Yorkshire, under the Manufacturing advisory service scheme. It can work for
business support all industry sectors. The formula is simple:
The independent professional consultant (already in the field doing this kind of work – no
training or change in fundamental working practices required) makes the initial contact with the
prospective client. If the client is interested in developing his business (i.e. in growing his
business) then the consultant will carry out a half-day diagnostic (paid for by the Govt –
suggested rate £350) in which areas of improvement are identified, and a cost benefit analysis
carried out (similar to the Yorkshire MAS scheme).
This cuts out one level of beauracracy, creates cost savings, and improves profitability of the
scheme and, most importantly of all, significantly improves the productivity and profitbaility of
the client – ‘the end game’.
Results show that making good use of private sector and market forces by distributing SME support
via the network of independent business support professionals achieve a much higher success rate
and productivity.
Finally the greatest reason to consider the proposal is that the greastest number of business will
be helped.
Under current proposals SMEs are likely to react extremely cautiously, in challenging marekt
conditions. What if it all goes wrong, what if the desiored results do not materialise. If the
take up is sufficiently low, as I predict, then the accountants managing the process are likely to
get the lion’s share percentage of monies allocated.
If you act now, before March, and cut out the ‘in house’ advisory level of beaucracy, and
outsource it to the provate sector and use market forces to deliver value for money, instead of
historically low take up, poor performance and low volume of success outcomes, you will see an
impressive set of results right up to election time in 2014/15.
The time to act is now.
If you would like to discuss the proposal, the empical data, the testimonies of many indepdendent
business support professionals, please get in touch as soon as is convenient.
(deleted text), Your coutnry needs you, to stand up, take nlotice, take responsibility, and take
action that will make a difference to much of the grass roots of the UK economy.
(deleted text)Comment Tags: business support: govt. support for start ups and SMEs