How Tech Startup Füder Disrupted an Entire Industry by Disobeying the Law

An edited transcript of a talk delivered at TED 2015.

Think of a business - any business. What would you say is its number one expense? Raw materials? Nope. Labour? Sorry, wrong again. Rent and utilities? Nuh uh. The number one expense for every business in this country is the law.

You heard me right, the law.

[audience chuckles uneasily]

Over five years my team studied more than two thousand successful startups, figuring out what made them tick. Why did some succeed, and others fail? If we could crack that code, we could copy the winning strategies to launch our own startup. And that’s what we did.

Say hello to Füder.

[audience applauds, delighted by the smugness]

Füder is a social, mobile, peer-to-peer solution for real-time meal-sharing. One person cooks, another eats. If you like, you can think of us as Uber for restaurants, because that’s the idea we copied. We also copied their name.

[audience chuckles again]

Our research of successful startups uncovered the counterintuitive recipe for success that will allow Füder to disrupt the food industry. In a world of complexity, our approach is simple: breaking the law. Let me give you the highlights:

  1. Tax. This one's obvious, but it's worth mentioning anyway. Did you know that a large chunk of money made by most businesses disappears into thin air as tax? What do these businesses get in return? Nothing. At Füder, we keep our margins healthy by refusing to pay tax, and we reinvest a portion of these savings into accountants (to defend our no-tax position) and lawyers (to find new laws for us to disobey). The rest goes straight to our shareholders, although it would certainly be reasonable of you to think that we’d pass on the savings to our customers.

  2. Minimum wage. Maximum waste, more like it! When people speak of “labour costs”, what they’re really talking about is paying their employees a wage that allows them to stay alive. That's the old way of thinking.

    At Füder, we use a proprietary pricing algorithm to pay our cooks anywhere from a few cents to a few dollars per meal, with no transparency or consistency whatsoever. Our expectation is that being a Füder cook will be unviable as a long-term proposition, but that a steady stream of hopefuls will continue to flow in due to our excellent marketing campaigns and society’s infatuation with cooking shows. In addition, a handful of popular Füder cooks will earn a lot of money, keeping the dream alive for everyone.

    Consumers won’t care about any of this because they’ll be getting cheap food.

  3. Food safety regulations. Do you know how much time is wasted complying with these archaic, bureaucratic procedures? Most commercial restaurants clean their kitchens every day. How often do you clean your kitchen? Be honest now. [audience laughs] I thought so. At Füder, we have no food safety regulations, so our cooks can spend more time doing what they love: cooking great meals.

  4. Copyright. Companies like YouTube, Google, Amazon and Spotify have made billions by disrespecting - or completely disregarding - the law in relation to copyright. We haven’t figured out a way to do that yet, but rest assured, we’re working on it.

The law was originally intended to serve society. But when the law gets in the way of corporate profits, how can we justify compliance? I want you to think about that.

Thank you.

Photo credit: "Chris Anderson 2007" by Pierre Omidyar - Flickr. Licensed under CC BY 2.0.