It’s Never Too Early
The founder and CEO of a very successful, mid-stage fintech recently asked me, “Why should I engage in public affairs now? I don’t need anything, and any attention at this point would distract my team and may even invite increased scrutiny. And, anyway, all I’d be asking regulators is not to change anything.”
It’s a common (and legitimate) concern that has many variants.
"I'm too focused on building product to spend time communicating with policymakers, regulators, and influencers."
"What we're building is so intuitively good, they'll surely understand the benefits."
"I'm too small a fish for them to care about."
The first part of my answer, which I don’t think the CEO liked much, was that it would be too late if he waited until he DID need to ask–even to maintain the status quo. Like any relationship, those with policymakers, influencers, and other relevant third-party stakeholders take time to warm up. And a warm ask–like in sales, fundraising, and partnerships–is almost always more productive than a cold ask.
Think about it this way: the total addressable market of relevant policymakers for any business is certainly not large enough to create a successful funnel through cold calls. You need to engage BEFORE the ask.
The second part of my answer, which was slightly more welcome, is that there WILL come a time when you need to make an ask of policymakers or other outside influencers, and that time is probably closer than you think. Successful startups, almost always by definition, are disruptive. They’re disrupting an industry, incumbent firms, existing customer behavior, or all three. Somebody is going to be ticked off. And chances are that somebody already has a voice in the public square.
In the case of our lukewarm fintech CEO, his company is disrupting the traditional commercial banking industry. According to OpenSecrets, incumbent commercial banks spent nearly $70 million on direct lobbying in 2023 and hired 461 lobbyists. And that is just direct lobbying, which doesn’t include campaign contributions, CSR/ESG initiatives, or any number of broader public affairs efforts. It’s not a stretch to assume that high on those 461 lobbyists’ KPIs is to protect their employers’ businesses by advocating for any possible barriers to potential competitors.
The bottom line: if you don’t tell your story, somebody else will.
The final apprehension of my fintech founder contact was that public affairs is a time-suck. That most certainly does not need to be the case. You don’t need to start with a full-time position or a fully developed function. Take baby steps, dip your toes. Here are a few ideas:
Survey your clients about their own public affairs activities and focus. You’re probably already talking to them about product enhancements anyway. Tagging on a question about what keeps them up at night from an external stakeholder perspective will earn you respect. And you’ll probably learn a lot about what public debates and trends are critical to the future of your own business.
Direct the marketing and comms teams to add a third-party influencer-focused aspect to their next three announcements or campaigns. Maybe it’s a blog post about the societal impact of a new product launch. Or perhaps it’s a secondary placement of an already planned ad in a media focused on public policy or broader societal trends. The intention is to begin conditioning the broader environment with a positive “halo” effect associated with your brand and offerings.
Participate in a regulatory or policy session at an upcoming industry or trade conference your company plans to attend. You’re already there. Extending your presence to the legal, regulatory, or policy track will give you a feel for what’s happening in that space and expand your brand to this important aspect of the industry’s focus.
Join an industry association. Membership is relatively inexpensive, and you can scale your participation up and down as needed. Most associations offer regular policy or political updates to keep you and your leadership team updated on industry developments. Almost all offer curated and low-risk opportunities to engage with relevant policymakers as part of a broader group. Showcasing your membership will also demonstrate your industry leadership.
Spend an hour developing a public affairs strategy at your next leadership team meeting. Keep it simple. I proposed a “six question framework” in an earlier article. You don’t even need to plan on executing the plan. The mere exercise will empower your senior team to understand the relevance of third-party stakeholders in their core responsibilities.
Dedicate thirty minutes at your next board meeting to discuss the potential impact of policy-makers and third-party influencers on your business. You’ll get credit for being forward-thinking, demonstrate your belief in the future impact of your company on the broader industry, and get board members thinking about how they can leverage their network to impact the external environment for the organization’s future success.
So, it’s never too early to start investing in public affairs and take control of your company's narrative within the public debate. Your future self (and your investors, clients, and employees) will thank you.
Epilogue: I guess my answers weren’t totally unwelcome by the fintech founder and CEO. He ended up investing in a more-or-less full-time public affairs position. I didn’t get the gig, but oh well. At least they’ll be telling their story themselves.
