Beyond consumers, the government is the other entity that can determine the survival of a startup. A variety of government actions in addition to laws and regulations powerfully affect companies’ economic value and the strategy a company employs to manage relationships with local authorities can determine how successful it is going to be.
But managing government relationships is a very tricky and complex affair and it is capital intensive too. Startups in Lagos State, Nigeria, received a jolt of this reality with the government’s ban on commercial motorcycles in January 2020.
Although the action of the government puts a question mark on its readiness to attract and protect foreign investments, it only revealed the debilitating effect its policies could have on a business and why maintaining a good relationship should be a priority for all startups.
We asked Jessica Hope, founder and CEO of Wimbart, a London based public relations firm that handles the PR needs of many tech startups in Africa what actions a startup should take when engaging the government. The following are the five dos and don’ts she shared.
Government is your partner
This might be difficult to accept when government officials are breathing down your neck or making unreasonable demands. Hope says it is in the best interest of a startup to see the government as a partner instead of a stumbling block.
“The main selling point for startups is that they provide solutions to existing systems, but theoretically, policymakers are also trying to do the same,” she said. “While startups are associated with the language of disruption and governments with that of regulation, the two bodies need to find a way to speak the same language and communicate across a number of channels. The government holds a lot of power and has the ability to make or break startups. In the case of the recent Okada ban – it is literal.”
Gokada reportedly sacked about 70 percent of its workers following the ban.
Get a spokesperson
Investing in public relations may be expensive for a startup still struggling with raising capital or in the middle of an expansion, but it is a necessity that could save every business millions in litigations.
However, for startups unable to pay the high fees of a good PR, “Identify a spokesperson within your company who can act as a government liaison,” Hope says. “Addressing regulation is unavoidable and should be considered just as important as marketing or operations, so employing the most knowledgeable people to lead, advocate and communicate in this area is a must.”
Don’t leave it too late
After identifying the company’s spokesperson and PR strategy, don’t wait too long to start engaging the government. Building a healthy relationship needs to be part of the early stages of planning, says Hope.
“This will prevent interrupting operations at key stages of business growth – as we have seen with the Okada ban, failing to adequately invest in government relations at the right time can derail operations altogether,” she said.
Don’t engage on your own
Until the Okada ban, bike-hailing companies in Lagos have sought to change the government’s negative position on commercial motorcycles individually. When they did come together it was to react to threats to their business, for instance, signing of an MoU with the NURTW which led to paying N500 per bike on a daily basis. More collaboration between the players could have led to more positive outcomes.
“Startups have to band together to shape regulation that is favourable to their entire industry, and then allow their product which meets regulations to compete. One cannot dominate an industry if one is not allowed to exist. They also need to speak with one, coherent, unified voice – and this should be organised before problems arise,” Hope said.
Work with the media strategically
Every startup needs a coherent, linear communications campaign, that does not antagonise the government. Hope says this goes beyond mere news articles in the media, to thought leadership pieces and every available media channels to not only position themselves as industry leaders but also government allies.
“Viewing Government and policymakers as an important stakeholder in their business operations (as well as potential customers) is where startups should begin from day one,” Hope said.
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