Jeff  Carter

Most of the start ups that I know have a Democratic bent to them. The founders are pretty liberal. Start ups are like that. They are live and let live people. Leave me alone, let me do my thing and I really don’t care about what you do.

That’s actually not Democratic anymore-it’s Libertarian. If they bothered to do their homework, they’d see Democrats are for huge government and run by unions. Unions aren’t friendly to innovative start ups.

However, there are a lot of governmental developments that are affecting the start up world. One was the whole SOPA debate. The web should be a free and clear place for creativity. Me too companies should be free to compete with innovators, and may the best executor win. 1995 Yahoo ($YHOO) chat rooms became My Space which became Facebook($FB). You get the drift. I may have left off a couple. But the key thing is creative destruction paved the way-not government subsidies or direction. The market won.

Today, the start up world is starting to be threatened. First, by the new patent law. To me it looks like aggressive companies will use patents to claim everything, fight start ups by tying them up in court, and stave off competitive innovation. Most Democrats, including the President, and some Republicans endorsed this new law.

Dodd-Frank can affect start ups. If somehow, someone in the government bureaucracy deems a start up as a risk to the financial system, they can shut it down or at least investigate it heavily. What stops a great start up? Paperwork. The government is excellent at that.

Obamacare will affect start ups. Many start ups are happy. They think they are off loading health care expenses. Wait until they see the employment restrictions, extra taxes and the amount their employees will have to pay for health care. It will make the old system look like a flower garden. And the old system wasn’t a flower garden.

I have recently gotten some email from a start up talking about Obamacare. It was clear they were trying to toe a fine line, but I think on an issue that’s this loaded they should have kept quiet. The perception I received was that they supported Obama, and Obamacare. Support of Obamacare alienates 60% of their possible customer base assuming polling is correct. Depending on which poll you look at on the President, it’s 50-50. Why pick a fight with potential customers?

Much wiser to say nothing. Oprah stepped in it when she endorsed Obama. She lost 50% of her ratings. On cable today, she cannot get an audience. She has become passe. People don’t listen to her and they tune her out.

Start ups should concentrate on building great companies. Let the politics go to bloggers, the media and the lips of currently free Americans.


Jeff Carter

Jeffrey Carter is an independent speculator. He has been trading since 1988. His blog site, Points and Figures was named by Minyanville as one of The 20 Most Influential Blogs in Financial Media.
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