When you can’t innovate, copy- Harvard Business Review (May 24, 2012)
The world is full of people who aspire to make it big and will pull out all stops to get there. When a new idea is successfully executed, it is only natural for copycats and clones to appear. From Flipkart to Snapdeal, from Microsoft’s Internet Explorer copying from Netscape Navigator, it’s been done before, and it will certainly be done again.
The secret to a copycat start-up is not in the copying itself, but how effectively the copying is done. For the copycat to be at par or rise above the original idea there needs to be certain key features that the original idea does not provide. For instance, let us look at Microsoft’s Internet Explorer. When Microsoft decided to bundle the Internet Explorer with the Windows Operating System, they effectively put Netscape Navigator out of business and monopolized the browser market for themselves. The key trick for a copycat start-up to work is to understand the psychology of the consumers of the product. When the WHAT of a problem has been solved, the cloners need to focus only on the HOW. The better they can improve their relations with the user, the more chances they have of succeeding.
The statement “Innovate or Perish” has always been at the very core of the business market, and it applies to both start-ups and established corporate companies. But, when one can’t innovate, do they not deserve a chance at fame and prosperity? Are we really so arrogant on our high pedestals of innovation and creativity that we can’t understand that the drive behind copycats is the same drive behind original ideas? One man sells brilliant tea, his competitor sells tea of slightly lesser quality but has better biscuits: does the fact that his tea is of an inferior quality not entitle him to success? The general consensus is that: while the originality of the idea does matter, what matters most is how the idea is executed.
Let us take a look at reality: who really are we to judge copycats? Copycats are entrepreneurs as well, save for the fact that instead of having original ideas, they improve on the original ideas, or on the business model, or they improve the consumer experience, etc. While businessmen have been traditionally encouraged to come up with original ideas, the copycat model has worked successfully throughout the ages. In the start-up culture, copying happens on a regular basis, and while copying is generally frowned upon, copying with a touch of innovation and suave works wonder for the business. The fashion website, YepMe, is not the first fashion website, but it is one of the few in India which offers quality clothing at affordable prices, which has made it a successful start-up, even if it is not a 100% original idea.
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Coming to India, we see how the start-up culture has leaned towards copying successful business ideas of the West. From Ola Cabs, to Flipkart and even OYO Rooms, the copycat culture has always existed in India’s start-up market. But, they key difference between regular copycats and Indian copycats are that the Indian business models are tailored for the Indian market, which is a very price sensitive one. So, low prices, high discount rates and high value for money are some features that Indian start-ups shall have to provide to make it big in the Indian start-up scene.
As per The Economic Times, it has been observed that investors prefer if start-ups have some successful comparable. Completely original ideas have a greater chance of getting tabled soon, whereas having certain successful role models to look up to definitely improves a start-up’s chances of receiving funding and success. This can be seen in famous taxi and cab services such as Meeru Cabs, Ola Cabs and TaxiForSure.
Another important aspect of a successful copycat start-up is addressing local needs. This can be seen in advertising service provider AdPushup, and the same is done even by the technology conglomerate Google. Even companies like Vodafone offer specific packages which are suited for the Indian market, and the same packages cannot be availed outside India. Tata Docomo and Idea took up the business model of Vodafone and took it a step further by introducing better prices, better schemes and innovative advertising which appealed to the Indian consumer. The dynamics of the Indian market must be kept into consideration when launching a copycat start-up in India, where people will spend lavishly in KFC and Shopper’s Stop but will skirt away from spending equally in local markets.
Alexander, Marc, and Oliver Samwer are the three gentlemen behind the infamous Rocket Internet. They initially encountered success by investing in start-ups like StudiVZ and Lokalisten which is also known as the German Facebook. They are also the brains behind the German auction site Alando which was sold to eBay in 1999 for $54 million, and mobile content platform ‘Jamba!’ which was sold to Verisign for $273 million. They are, without a doubt, intelligent, smart, business minded and tech savvy, but several around the globe consider them to be nothing more than lazy copycats that duplicate credible Internet startups and earn in millions or billions. They are sort-of known as the in-house copycats of the Internet. Internet heavyweights such as Pinterest, Amazon, Groupon and Fab have fallen prey to the Samwer brothers.
Imitating others may not be the best path to becoming an industry leader. The risks of copying should never be underestimated. Pioneers almost always command strong market loyalty that will be difficult for copycats to take over. Still, start-ups need to understand that even big corporate companies copy on a regular basis. Would Steve Jobs have created the iPhone if there was no BlackBerry in the first place? Entrepreneurs need to think carefully about whether they need to innovate when there are business models that can be duplicated lawfully, and they also need to weigh the risk v/s benefit analysis of their original business model vis-a-vis pre-existing successful business models.
