What’s the quickest way to startup success?
One is to think of a great innovation. Another
is to copy someone else’s great innovation.
That's a lot easier than coming up with your
own. And it’s often a shorter, surer path to
your first million - or billion.
Just ask the Samwer brothers, Oliver, 39, Marc,
41 and Alexander, 37. The founders of Berlin-
based imitator incubator Rocket Internet,
they’ve cloned dozens of successful internet
companies, from eBay to Facebook. And all
three of them are billionaires.
Until recently, the Samwers kept a low profile.
The press usually referred to them as secretive.
But lately they’ve been getting more attention.
After all, it’s hard not to draw attention when
you’re raking in billions by copying almost
every successful Internet company that comes
along.
But could the growing acceptance of the
Samwer brothers also be due to the fact that
people in the tech industry are finally
admitting in public that imitation is good
business?
We decided to find out. We couldn’t get the
Samwers on the phone, so we called up Oded
Shenkar, the man who wrote the book on the
business of clones: Copycats: How Smart
Companies Use Imitation to Gain a Strategic
Edge.
“In the tech startup world, people tend to
equate entrepreneurial activity with innovation,
and that’s the wrong assumption,” said
Shenkar, a professor of management and
human resources at Ohio State University.
“There’s a long history of successful startups
that are built on imitation, not innovation.”
Facebook is one. Apple is another. We should
recognize Mark Zuckerberg and Steve Jobs as
great imitators, Shenkar said. Zuckerberg
didn't invent social networking. Friendster
launched in 2002, MySpace and LinkedIn in
2003. Facebook didn't come along until 2004.
Similarly, Jobs cobbled together the Macintosh
user interface circa 1984 out of ideas and
technology he first encountered at Xerox PARC
in 1979. Shankar doesn't count these imitations
against the two men. Rather, he celebrates
their seminal work in duplication.
“We have this reverence for innovation, but
imitation is often the key to success," Shenkar
explained. "Imitation was critical to human
evolution, and today imitation is more critical
than ever - because it’s much cheaper and
more feasible than previously. Business is the
only discipline that’s 50 years behind, in that it
looks at imitation as a dumb thing that’s done
by people who can’t innovate. In all other
academic fields there is a belief that imitation
is an intelligent capability. But in business
we’re still stuck on this religion of innovation.”
Partly that’s because innovation is hard, and
the business world exalts high achievers. But
imitation isn’t easy, Shenkar said. You have to
know how to do it, which is why some
imitators fail and others, like the Samwers,
succeed so well. Their hit rate is around 50
percent. Their neatest trick: copying successful
companies, then selling the knockoffs to the
originals. They sold their Groupon clone to
Groupon. Recently they sold their version of
Care.com to Care.com.
And imitation does not work only in the
internet world, Shenkar pointed out. It’s easier
there, yes, but copycatting has long been
common in all sorts of industries. RC
introduced the original diet cola, Diet Rite, in
1958, but it was flattened by imitations from
Coke and Pepsi. European discount airline
Ryanair was in a downward spiral until
management flew off to Texas to learn from
Southwest how to properly run a cut-rate
carrier. Now Ryanair is profitable. Hertz and
Enterprise are currently in the process of
ripping off Zipcar.
When imitators execute well, they usually
succeed better than the first movers, because
they study the errors of the innovators and
learn from them, as Facebook learned from the
mistakes of MySpace.
“Every study that has looked at this issue has
found support for the imitators,” Shenkar said.
“And even those that found a modest advantage
for the pioneers invariably found that the
effect is getting smaller over time. So even if
there is an advantage for innovators, it’s
getting smaller not larger, despite our worship
of innovators. On balance, the research
supports the imitators and we’re moving more
and more into an imitator age.”
also read:
There’s No Such Thing As An
Original Business Idea
