When they have to change the rules
Many tech companies are trying to “disrupt” existing industries, but few actually do. There is, however, one unmistakable sign of real disruption: when the incumbents try to change the rules.
Uber, the outstanding on-demand car service, has ascended to this rare status. The taxicab industry/mafia has long felt threatened by Uber (even forcing them to drop their original name of UberCab). Earlier today the local government in Washington DC voted on legislation specifically designed to thwart Uber's new product, UberX – a hybrid fleet that offers lower prices than Uber's standard black cars. The cab lobby attempted to push through a “minimum fare” that was blatantly designed to protect them from competition with UberX, and would without question hurt consumers.
Airbnb is waging a similar battle with the hotel industry. The Hyatts and Hiltons of the world have good reason to feel threatened, too: Airbnb has more than 100,000 active listings, which is more rooms than most global hotel chains.
It reminds me of the legacy of basketball great Wilt Chamberlain, whose unprecedented dominance as one of the league's first athletic “big men” (he was 7'1") directly resulted in numerous rule changes to try to blunt his advantage. He still managed to score 100 points in a game (still a record) and win 2 championships.
While these legal battles may be expensive and frustrating for the startups that face them, ultimately they are an overwhelmingly positive sign: that you're so damn good, the existing players can't compete without changing the rules. Like Wilt, Uber and Airbnb will win, because their products are just so much better than the competition. Pesky rules changes can't stand in their way.
Congrats to Uber on prevailing today – fortunately the anti-Uber amendment was removed. And to all the other nascent startups out there: may you be so successful that your incumbents try to change the rules for you too.