Startups Are Turning Customers into Lobbyists

How can new firms overcome the regulations that protect incumbents? Lobbying for policy reform isn’t much of an answer, because incumbents generally have the benefit of long-term relationships with government agencies built up over many years. Recent research finds that some insurgent firms have prevailed on the regulatory front by using a strategy straight out of the playbook of environmental activists – mobilizing stakeholders to become political advocates. Organized demonstrations of support by stakeholder groups can send a powerful signal to policymakers. Firms mobilize their customers – one important stakeholder group – in three primary ways: online petitions, partnerships with other organizations, and customer associations.