“Dude, your idea has already been thought of. Not only that, it has been acted upon and is up and running! Not to disappoint you, but they even had funding by [insert prominent Silicon Valley Venture Capitalist]!”. This must be one of the most deflating comments a starry-eyed young entrepreneur embarking on his my-oh-so-amazing idea can hear.
Imitation, or the mere adaptation of an existing model, has been frequently frowned upon. In today’s modern society where innovation is celebrated and trumpeted, startups which try to replicate business models (whether by chance or by intention) receive little support and encouragement. The over-zealous goals of emerging entrepreneurs and investors to create a world-changing, revolutionary product begs the question whether startups that focus on existing ideas can still make their mark.
One area that imitating startups can look forward to is the localization of an existing business model. Most of the novel business ideas originates from the United States. However, it has been proven that adapting an existing model to a big localised market can reap great rewards. China and Europe are some of the largest markets outside of the US. In China, we have RenRen(Facebook), Weibo(Twitter), Diandian(Tumblr), Zhihu(Quora) etc. In Europe, we have Alando(eBay), CityDeal(Groupon) etc. These ventures have grown to be wildly successful, many of them achieving public offerings and massive buyouts.
The reason for their success is pretty clear. Whilst skeptics may point to the authoritarian Chinese government’s heavy handed exclusion of foreign firms, localization brings local expertise and on-the-ground knowledge into the business. For example, Baidu may be a blatant copy of Google in its early stages, but its heavy focus on media content (whether the industry folks like it or not) contributed heavily to its eventual success. Baidu understands that the Chinese market craves digital content such as music and videos, and will utilize a search platform which make their task at hand easier. CityDeal, acquired by Groupon eventually for a “3 digit million sum”, was able to build up its merchant networks very quickly due to their networks on the ground.
A Market that is Big Enough
Groupon went public in 2011 amidst much fanfare (and plenty of controversies). Groupon essentially pioneered the group-buying discount concept, amassing a huge amount of users in a pretty short span of time. However, LivingSocial proved that if the market is big enough, another clone can succeed and share some of the spoils. LivingSocial started off very similar to Groupon, differing slightly in the execution. LivingSocial is rumored to be considering going IPO this year. Similarly, Sugarsync proved that despite Dropbox dominant position in the consumer cloud storage industry, it is still able to operate well and stand on its own. In fact, as of date of writing, there are currently 12 Pinterest clones, with some of them actually being backed by VC money.
Adapting and Improving an existing idea
Adapting and improving upon an existing idea has been popular for sometime now. Facebook arguably takes its inspiration from Friendster, improving on its execution. In fact, Facebook can be regarded as a master in “stealing” ideas and improving them. Facebook Deals(Groupon), Places(Foursquare), subscribe(Twitter) etc shows much of the features borrowed from others. Apple’s iPod, widely regarded as one of the most iconic personal consumer product of the last decade, was an idea blatantly copied from previous MP3 makers such as Philips and others. What Apple has done was to take the original idea, which was good, and innovate by slapping a compelling design on it. Another example that we can see is Ryanair, and to be fair, almost all the low-cost airlines in the world. Low cost flights were the brainchild of Southwest Airlines, a US-based airline. Ryanair and all the others learnt greatly for it, copying its business model, tweaked it slightly and blossomed to overtake the original in the realm of budget airlines.
Lets face it, we would love to develop products that will change the world. But that is difficult, not to mention, sometimes unwelcomed. Innovation is not merely creating new products, but rather developing products that create value for the markets around us. The world needs diversity, even if it revolves around the same idea. If imitation and adaptation is unethical, we will have only one airline, one fast food chain, one search engine, one operating system (well, almost) etc. Perhaps its time we remove this negative connotation to imitators, for the No.2s had proven that they can still be wildly successful and may even overtake the pioneer. Its not the idea folks, its ultimately the execution.
What do you guys think? Will imitating and adapting successful US models work in Asia? Or Singapore for that matter. The success of Beeconomic proved that there exists lucrative exits for those who can localize a foreign business concept. Will a Rocket Internet clone (intentional!) in Asia be successful?