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Open Doors?

Entrepreneurs have pushed for deregulation as a way to get a foot in the door of old, entrenched industries. But is cutting through the red tape the solution you've been waiting for?

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This story appears in the September 2003 issue of Entrepreneur. Subscribe »

LaLa Wang has fought the law. So far, the law has won. A HarvardBusiness School graduate, Wang, 40, thought she had a potentialbreakthrough idea when, in the mid-1990s, she founded Mlx.com, a Web sitededicated to connecting landlords, property owners, real estatebrokers and apartment hunters in New York City. With Mlx.com, Wangwanted to streamline the real estate market, making it easier forapartment hunters to view many different places, by putting photosonline and allowing brokers, owners and landlords to better tailorofferings to potential clients. "I thought we had the model:an open system that would bring everyone together," Wangsays.

Mlx.com has proved popular with consumers, but Wang's lifehas only gotten harder. According to Wang, larger, established realestate brokerages in New York City have pushed state regulators touse a 1975 licensing law against her company. The law says allcompanies that provide real estate listings must first obtain awelter of paperwork about each property--hard copies of contracts,escrow agreements and other papers that would be impossible for ane-commerce firm to obtain about the hundreds or thousands of onlinelistings. (Older listings sources, such as The Village Voice, donot have to obtain this paperwork before posting real estate ads.)State regulators chose to enforce the 1975 law, and when Wang triedto continue operating, the state suspended her real estate license.Fighting to keep her business and overturn the 1975 law, Wang says,"has already cost over $300,000 in legal bills and an enormousamount of stress."

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