Startups Are Getting Crushed by Politics, Not Product; Here’s the Hire That Can Save You

You’ve probably heard it in every startup pitch deck since the dawn of Lean: “We’re hiring a killer PM to build the roadmap.” Or worse, “Our Head of Product will drive user adoption and retention.” Bless their hearts. That mindset is the startup equivalent of rearranging deck chairs on the Titanic, blind to the reality that your greatest threat isn’t whether passengers like the product. It’s iceberg, right ahead.

In 2025, the most underestimated, under-hired, and yet most desperately needed role in early-stage ventures isn’t your Product Manager. It’s Public Affairs. And if my saying that makes you think, “what??” Bear with me, because I’m not here to make a statement of fact; I want to present to you a theory. We’ve all been doing it wrong.

Startups Aren’t Products, They’re Political Acts

First, a bold truth: Startups are not products. They are economic and cultural disruptions. As I pointed out in “What Startups Can Learn from Utility Regulation”, most of what we idolize as “innovation” today is simply a better way to navigate, or circumvent, existing systems. You’re not building software. You’re renegotiating power. You’re not releasing features. You’re declaring independence.

Be clear in appreciating this, or stop reading now, if you don’t agree with me in that, you’re going to fail.

The Five Prisms, from Northwestern’s work which I explored in that Utility Regulation article — market structure, customer protection, externalities, technology adoption, and scale, aren’t just academic lenses. They’re a checklist of what every early-stage startup is up against. Regulation, reputation, policy, social license, and public opinion, all of it hits early. And the idea that your “Head of Product” will “iterate through it” with a few user stories? Laughable.

As Bill Gurley of Benchmark observes, the average startup underestimates the power of regulatory risk. And overestimates how much the product alone can carry them.

“In my first two decades inside the Silicon Valley bubble we built products people wanted and needed. We competed with other technology companies, and, like Bill Gurley, largely ignored whatever was going on in Washington. We were content Washington didn’t know we existed. Unless you were in life sciences (therapeutics, medical devices, or diagnostics), very little government regulation applied. We ignored Washington and Washington mostly ignored us (defense contractors excepted.)” Steve Blank, “The tech ecosystem got a rude awakening in May 1998 when the U.S. Justice Department and 20 state Attorneys General brought suit again Microsoft for anticompetitive practices designed to maintain its monopoly in PC operating systems and internet browsers.”

Translation: you can’t MVP your way past public scrutiny.

Product-Market Fit Is a Political Process

You think you’re looking for product-market fit. What you’re actually hunting is permission — from regulators, influencers, journalists, customers, and communities.

Product-market fit is political. Just ask Uber, Airbnb, or any fintech that tried to “disrupt” insurance. They didn’t win because of A/B testing. They won because they fought policy battles, built alliances, and changed hearts and minds.

This is where Public Affairs comes in. Not PR. Not (what most of you mistakenly think is) marketing. Not some intern tweeting GIFs from the company handle. Public Affairs means meeting and working with legislators, stakeholder mapping, narrative control, media pressure, coalition building, and policy intelligence.

It means managing the interface between your company and society, not just your codebase and users.

Startups need someone who thinks like an ambassador, not a product owner.

Public Affairs Is Risk Management in an Age of Weaponized Narratives

In today’s climate, where media hits harder than malware and ESG funds are now deciding market viability, your biggest existential threat is not bugs or churn—it’s narrative. Get profiled by a hostile journalist? Lose a state-level contract because you missed a regulatory nuance? Get caught in a political crossfire like TikTok? Game over.

Product Managers are trained to manage scope. Public Affairs professionals are trained to manage risk. And startup risk has gone geopolitical.

As McKinsey frequently steers, Geopolitical risks are no longer episodic; they are now structural… firms must build capabilities to anticipate and influence outcomes.

Read that again: influence outcomes. That’s not a Jira ticket. That’s public affairs working with journalists, competitors, conferences, and the government, to put your innovation in the market.

How State Policy Can Make or Break a Startup

Investors asking about your roadmap aren’t actually asking about your roadmap. That’s one of those questions or expectations that comes up in fact BECAUSE something else is amiss (which is usually why VCs have questions illuminating concern). Most likely, they’re asking about your roadmap because you clearly don’t have a moat. And in a market where AI, Web3, and biotech are clashing with public trust and policy, your moat isn’t your tech. It’s your stakeholder alignment.

This is why Public Affairs professionals are so effective: they understand that scale doesn’t just come from demand. It comes from legitimacy. They align you with state, local, and federal interests. They help you frame your value to industry groups, labor coalitions, civic boards, and the media. They speak system, not just solution.

As political economist Mariana Mazzucato wrote in The Entrepreneurial State, private sector innovation doesn’t happen in a vacuum. It’s embedded in a network of public actors, funding mechanisms, and policy environments.

Stop pretending you’re operating in a free market. You’re not. You’re navigating a permission economy.

The Product Manager Is the COO of a Fictional Future

No disrespect to PMs — I’ve worked with great ones. But in a pre-Series A startup, the role is often miscast. You don’t need someone to spec features when you barely know what market you’re in. You need someone who can get the mayor’s office to return your call, who can speak at a chamber of commerce without sounding like a startup bro, and who knows how to get a piece of state grant legislation written into law.

The Rise of Startup Public Affairs

You need someone who can tell your story in The Atlantic before the opposition does in The Intercept.

Benedict Evans has alluded that most of the time, what looks like technology disruption is actually regulatory arbitrage.

And guess who arbitrages regulation?

Case Study: Why Fintech, ClimateTech, and AI Can’t Rely on Product

Need proof? Let’s talk sectors. In fintech, startups like Plaid and Chime grew not just by building better banking interfaces, but by navigating federal regulation like Dodd-Frank and the CFPB. In ClimateTech, breakthroughs are constrained by permitting, tax incentives, and carbon credits, policy bottlenecks, not product problems. In AI? Let’s just say, if your startup isn’t already lobbying DC, you’re already losing to OpenAI and Palantir.

A Product Manager might figure out how to make the onboarding faster. Public Affairs means figuring out how to get a senator to put your pilot into the next infrastructure bill. Which one has more leverage?

“Systemic change at that scale requires both technological and institutional change. Institutions will be the hard part, not technology.” Lynne Kiesling; Director, Institute for Regulatory Law & Economics, Northwestern University, commenting on electric grid decentralization

The Future of Startup Teams? Or perhaps already, the Startup Team that Wins

Public Affairs first isn’t a pivot, it’s a survival strategy. I’ve beat this drum from SXSW panels to podcasts, since 90% of startups fail, stop focusing on what might make you successful and instead focus on surviving so you remain in the pool that can continue iterating to success. You need someone who knows how to write a coalition letter, build a regulatory sandbox, understand FEC filings, and work with think tanks. You need someone who can get your pitch on a governor’s agenda more than a Y Combinator waitlist.

Stop hiring like you’re building an app. Start hiring like you’re building a movement. You can always find someone to write user stories. It’s a hell of a lot harder to find someone who can inform, educate, and influence.

Thought to take with you:
If your startup vanished tomorrow, would anyone notice, or would it be lost under the ocean having struck an iceberg no one saw coming?

Would anyone care but you and the team members who are hoping it’s successful? Would your community care? Would the industry care? If the answer is no, don’t blame product, don’t blame running out of cash, and don’t blame lack of customers. Blame your failure to appreciate that startups are political acts of influence and change.