On the important issue of copycat companies

Looking through my twitter stream, I came across this from Bryce:

It’s not just him.  It’s reality.

And as the founder of one of the world’s most successful knockoff companies, I really can’t think of anything wrong with it.

In fact, there are a lot of things RIGHT with knockoffs on the startup scene:

1. Ideas aren’t worth much on their own.  In fact, I’ll prove it to you right now.  I have an idea!  It’s amazing.  Instead of shipping goods or people across the country in airplanes, my idea is a product that would get them there in 3-4 seconds using advanced optic teleportation technology.  3-4 seconds to be ANYWHERE!   Now….how much will you pay me for this IDEA?




2. Weed out the weak hands in both entrepreneurship and startup-investing. You have a unique idea.  You determine the timing of taking it to market.  You determine the marketing, PR and other promotional aspects of the business.  You get a head start on everyone that could ever copy you.  Now….with all of those “original idea” advantages, if I can get my version 1 out before you react to customers and get your version 2 out……if I can move quickly enough to get YOUR idea executed and in the hands of more people swiftly…..why the hell shouldn’t I win?   VC’s and angels investing in “feature ideas” instead of “business teams” will also get what they deserve.   EVERYTHING counts.  Just because you’re first to market with an idea doesn’t mean you don’t have to distribute, brand, support etc!




3. Revenues matter. The things that make “features” so tempting to build are the exact same things that make them so easy to copy.  Cheap to build, fast to market, all that low-barrier stuff.  But revenues…that really changes the game.  Revenues are a mirror of end-user value.  To build a product or service that people or companies are willing to pay for is not easy.  It’s even less easy to copy, because those initial customers are much less likely to switch to a copycat.  Think of it this way:  Are you more likely to try another free photo-sharing site, or try another brokerage?




4. It’s the way it is, damn it! Trying to fight copycats is ignorant.  What….was Google the first search engine, or did they COPYCAT Altavista…or AOL….or Yahoo?   Did Henry Ford owe it to Ferdinand Verbiest not to produce the Model T in massive quantities?  Of course not.  Competition (the absence of a monopoly on the execution of an IDEA) is what makes the world a better place, and yet it does not exist for the most savvy of entrepreneurs.  Put that in your pipe and smoke it, chief.

In summary:  Yes, there will be more and more fast knockoffs as more and more “originators” are simply features with low barriers to entry.  Originators still have a major advantage and are still a great investment if there is a business and team that EXECUTES behind the idea.  If not, then the copycat that has those parts deserves to win.

So don’t worry about copycats.  ASSUME they are already there on day one.  Beat them before they can even get started.  Build your own barriers and keep innovating, keep growing the gap between yourself and the parrots.

Oh, and if you see someone with a great idea that you can “knock off” and beat…..DO IT.  This is business, not show-and-tell.

Win.