If the next 20 years of startup-led tech innovation are going to be about addressing massive problems -- like health, energy, transportation, cities, education, and more -- it will mean more directly confronting (instead of stealthily bypassing) regulatory barriers and incumbent-driven regulatory capture challenges. So how can startups "growth hack" in a highly regulated sector? In this episode of the a16z Podcast -- the second of our podcasts from our most recent on-the-road trip in Washington, D.C. -- Evan Burfield, the co-founder and co-CEO of D.C.-based global incubator 1776, outlines the techniques (really, an art form) of "regulatory hacking". It's not just a way to enter a market, but a way to create a market ... much like Elon Musk did with Tesla: using the very system that drops lemons to make lemonade. The technique begins by understanding informal and formal power; "power mapping" the influencers all across the chessboard (from the top down and bottom up); telling your startup brand/product story in a particular way; and then making your moves. Just as there's a playbook for navigating Silicon Valley, there's one for navigating D.C., argues Burfield; and while many entrepreneurs instinctively just want to get regulations out of the way, sometimes, you just need to know how to play the game.

Every big technological shift (per Carlota Perez) brings with a structural shift too — an “institutional adjustment” in how companies innovated and build new products, according to Steve Blank and Evangelos Simoudis. Large organizations used to (and continue to) set up remote R&D labs in places like Silicon Valley. But now, those companies are also investing more energy and resources in setting up corporate venturing arms and/or “innovation outposts” in such startup ecosystems — especially as they believe that startup-driven innovation is one of the best ways to keep up with and address disruption in their industries. But… it’s not enough to simply establish a presence in these places; how do you also “sense” and respond to the right opportunities? Are they in the right places? Does beginning with corporate venturing really work for such outposts? And finally, how can these orgs avoid just acting out “innovation theater”? Simoudis — who has also written about whether “the elephant can dance again” using the case of IBM and Watson/ AI — offers his views on how big companies can and should use the Valley (and other innovation clusters) in this episode of the a16z Podcast.