67. Launching a Startup in a Regulated Industry

Corey Martin, a customer solutions architect at Heroku, is joined in conversation with Bryan Woods, the CTO of a platform called Rhino. Rhino is a simple CRUD app with an enormous responsibility. Typically, individuals need to pay thousands of dollars upfront when renting an apartment, to cover any damages and liabilities. Instead, Rhino charges renters--98% of whom are responsible and get their deposits back--a small monthly fee, and sends those payments directly to property holders. Landlords are protected and renters save money.

Although the idea is easy to understand, the effort to launch the product required working with established regulations. One of the co-founders also had to license themselves as an agent who can sell insurance, just to be able to operate within city and state laws. Yet unlike many other startups, Bryan sees regulation as something to embrace, not skirt. By working with regulators, Rhino has been able to establish the rules for how they operate, as well as nearly guarantee a competitive advantage by being the only company operating in the insurance space in this way.

As with many other startups, relying on established frameworks like Rails and stable platforms like Heroku have enabled Bryan and his team to focus on building a great product, not worry about implementation or uptime. Bryan also encourages other entrepreneurs working in heavily regulated spaces to trust in themselves and continue pushing through existing red tape. Rather than building something cheap and fast, truly revolutionary ideas will take time to convince others--particularly if legal requirements are already in place--but once you prove the idea you can become a leader in the field.

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• Rhino replaces up-front security deposits with a small monthly payment

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