How to make money cloning business internationally

R ocket Internet is one of the most hated yet successful tech companies in the world. Part startup factory, part venture capital firm, the business strategy is to fund clones of Silicon Valley startups then grow them at lightning speed in Interationally, South American, and Asian markets. Once Rocket Internet dominates a market, they sell the startup to the company they cloned it. Founded by in by three German brothers — Marc, Oliver and Kake Samwer — their portfolio companies employ more than 30, people. Lead by Oliver the middle brotherRocket Internet is famous for its aggressive growth tactics, taking businesses from idea to billions of dollars in revenue in under three years. This is due, in part, to their cutthroat hiring practices, a team of ex-bankers, and massive amounts of funding they pour into each venture. Because the Samwer brothers rarely give interviews, Rocket Internet has, for the most part, remained a mysterious figure in the business world. All names have been changed. He only cared about execution. Alando, the eBay clone, even used the same logo as eBay… in German. This was the second time the brothers used this tactic.

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On the 15th of January the domain name Groupon. A year later, the biggest rivals of each would launch in the form of Living Social and Kickstarter. At the start of Uber — previously known as Ubercab — started to expand internationally. Before we continue, I want to peak the interest of In , Singaporean Karl Chong was visiting New York and noticed the rising popularity of group buying websites across the U. He saw such potential to bring this concept to his home country that he quit his investment banking job in America and convinced his brother Chris to join him in moving back to Singapore to start a new online venture. The site was then rebranded to Groupon Singapore which Karl and Chris still work on today. Other entrepreneurs from around the world thought they could apply the same concept to their own countries as well. Looking to show impressive growth before their IPO, Groupon picked up a number of other country-specific rivals such as:. The acquisition was not primarily based on their user base or revenue, but focused on sourcing more good employees to add to the strong Australia team they already had. Send me the link. It covered the story of Rocket Internet , a brand now worth billions of dollars majorly thanks to their shameless cloning of popular U. S startups and bringing them to other countries around the world. Although I only read the story yesterday — it was released less than 48 hours ago — the name of the company sounded awfully familiar. They had taken the Zappos concept to Germany, the UK and Poland while building a brand that is now worth more than a billion dollars on its own. Credit: TheHustle. It turns out that everything I cover in this post — the concept of pivoting off successful startup ideas — is exactly what Rocket Internet do. They take popular US-based startup ideas, build clones of them for other countries and throw money at them until they succeed. Eventually we realized the best companies to clone were e-commerce businesses. Ollie would even hire a guy with a PhD to study the sites we were cloning. HomeAway — which was acquired by leading travel-planning company Expedia for almost four billion dollars just a few months ago — grew rapidly because it acquired much smaller, similar operations around the world. Take a look at this buying spree…. They snapped up some of the biggest brands in Australia, the UK, Canada and Brazil who were all essentially offering the same thing. There are four key reasons why this acquisition strategy works so well for them:. They have established partners. Customer acquisition can be expensive. If you already have some users and an established brand in your local country that saves a lot of time.

They found an excuse to interview the Valley’s elite: a senior thesis.

Remember Me. In the startup space, the controversial venture builder Rocket Internet is an incredibly effective company and is on a mission to create the largest Internet platform outside the United States and China. It employs 25, people and operates in over countries with a laser-focus on three areas: eCommerce, marketplaces and financial technologies. Even though Rocket Internet is excluding the competitive American and Chinese markets, it still reaches 4. The company looks at successful American Internet companies in the aforementioned focus-areas and copies them outside the United States. Rocket is often criticized as an uninspired copycat , but critics continuously overlook the substantial innovation in its business and operating model. Rocket Internet creates value by repetition. In the United States, entrepreneurs and academics alike spend time and money to develop and establish new business models that capture value. Entrepreneurs employ methods like design thinking to increase their chances, but most often still fail along the way. However, unlike a chemical compound, business models cannot be patented. Once a successful business model is developed, it depends on execution if the original business model inventor can extract value quickly or somebody else will capture value in the long run. Centralization: Rocket Internet gets significant economies of scale by centralizing certain tasks for all of its startups in its headquarters in Berlin. This means that product development, user experience design, marketing campaigns and legal work are conducted by seasoned developers, designers and lawyers. For instance, Rocket Internet employs over IT specialists in Berlin, alone, that develop the underlying platforms for its three major focus areas. When a new venture is started, those developers customize the prebuilt platform and thereby mitigate considerable technical risk especially in the areas of stability, security, scalability and speed. Once developed, all code, contracts and other intellectual property can be reused for future startups. On the other hand, operations, sales and customer care are local and built by the startup employees that are on-site. Rocket Internet is great at localizing its products, because it leaves out these core functions from its centralization. With years of experience, it found a successful formula on the management side by hiring away managers from a handful of prestige firms such as McKinsey, BCG and Goldman Sachs. Rocket can attract them by offering a comparable salary, yet only a low, single digit in equity. Thus, corporate types can feel like entrepreneurs, without the massive downside. Furthermore, hiring people from only a handful of firms makes founders interchangeable and mitigates the personnel risk of Rocket Internet. Founders, who are usually preoccupied with raising round after round of financing in the beginning, can focus on growing the company and leaving the fundraising to the expert, Oliver Samwer. Rocket is diversified across markets and business models and quick to eliminate underperforming startups.

Indiegogo and Kickstarter

Corporate boards and business schools may focus on innovation. But when starting a company, it can be the case that tweaking an existing idea is both easier and more profitable than creating something from scratch. Indeed, in today’s world copycat companies are a reality of doing business. It’s increasingly the case in the crowded field of technology, where different companies’ smart watches, smartphones and tablets have come to closely resemble their rivals’ products. But it’s also the case in other industries, where copycat businesses — when done lawfully — can work and be hugely profitable. After all, it wasn’t Starbucks, for instance, that invented the coffee shop. But where was the first place you ever ordered a «grande» coffee? Four years later it released its own version of Stories — the very same feature that rival Snapchat had introduced, wherein photos and videos shared with friends are deleted after 24 hours. But what we know now is that Instagram Stories has added million users in the year since it launched, while the now-public Snapchat has seen its stock price erode since it first began trading on the NYSE last March. People would perhaps be forgiven for thinking Kickstarter is the grandfather of online crowdfunding sites. But rival Indiegogo actually opened up shop in , a year before Kickstarter was even launched. The mechanics of a crowdfunding campaign on Indiegogo are slightly different — in addition to «fixed funding» campaigns, which both crowdfunding sites host, Indiegogo also supports » flexible funding » campaigns, where people keep their money if they don’t meet their overall funding goal. But both sites , since their foundings, have hosted more than , crowdfunding campaigns, and with a 5 percent fee charged by each to successfully funded campaigns, both sites have made millions. Harris peels back the curtain to give readers a glimpse at Sega’s efforts in the s to dethrone Nintendo, which in the United States was the undisputed king of the video game. Taking a page from Nintendo’s book and the success of the game Super Mario , Sega created Sonic the Hedgehog and began making waves. At one point, as Harris explains in his book, Sega amassed a 55 percent share of the U. The Samwer brothers are well known to folks who analyze copycats in the tech industry. Their prowess at mimicking innovation goes back to , when the three brothers developed Alando, a German copycat to American online auction site eBay. Within four months eBay purchased Alando. It was in when Jony Ive, chief design officer of global technology titan Apple, used the word «theft» to describe what Xiaomi was good at. China’s Xiaomi is commonly the target of folks who believe it’s good at copying rival Apple when it comes to Mi smartphones. It’s a question that’s been posed directly to Xiaomi co-founder and president, Bin Lin. Lin and others in the company insist there are differences, despite a user interface that is remarkably similar to Apple’s. In , Amazon released the Echo, a personal home assistant that has countless people asking Alexa whether it’s raining outside. One year later Google released its Home device — a personal home assistant that has countless people asking Google whether it’s raining outside.

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Lately, much ado has been made about one of the perils of the startup business — clones. These lookalikes spy a popular Web platform, analyze it, find another market ripe for such a service, and launch a copycat company. They are known for how quickly they can build their clones and how well they execute. Their goal: to ramp up and then sell the company for a profit. Nobody likes a copycat, for obvious reasons. But is this actually a big problem, and are those behind clones really bad people? All three hold graduate or business school diplomas and impressive scholarly backgrounds. They are basically known as the house flippers of the Internet. Russian-based Fast Lane Ventures has also indulged. These non-existing markets come with their benefits. And recruiting stateside developers is always an option, seeing as the conversion rates tip generously in our favor and you can make more and live for how to make money cloning business internationally. This bullish attitude can partially be attributed to the ecosystem. He characterizes the French startup climate as small but growing. In France, it is impossible to get a Twitter-like company because we are lacking early-stage investments and perspectives of exits for B to C startups. All these startups are moving to the US, and that is what we [Pictarine] are doing right. I asked Martin what he would do if Pictarine were somehow spun off into a copycat version. That is something that cannot be stolen easily. Adler explains that while a handful of things you could sue these clones for do exist, including trademark or copyright infringement, or illegal use of some sort of process a site or application has patented, meeting these conditions can be incredibly difficult.