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There are lots and lots of startups that succeeded. They prove that the idea behind them was good just as much as the implementation and marketing and all that stuff were good.

Then sometimes a 'new' startup appears that just copies one of those ideas, puts it in a new market and is just as successful as the former.

For example in Poland we have an internet auctions site that is way more popular here than e-bay, but certainly is based on it. They just were on this market first, so they got the biggest piece of the pie.

Now the question - what's the value of such things? They are very little innovate, on the other hand - coding takes time. The time that's wasted on rediscovering things that others did before, on fixing long-time known bugs.

Seems like a big waste-of-time when I look at it this way.

(I'm not talking about bussiness 'value' of such project, as launching a site on new market is usually a good bussiness).

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4 Answers

up vote 5 down vote accepted

Well, think about it from the other side of the table: If you start with a truly innovative idea, you also need to code the underlying software. You also need to fix bugs, and you also need to discover solutions to problems you encounter. It's basically a waste of time, too!

Besides, most web businesses operate on a common set of functionality: Some "static" pages (such as 'About' or Terms of Service'), authentication, newsletters, etc. This is often already available, either as an in-house solution or as a public framework.

On the other hand, there is a very valuable advantage in copying someone else's idea: The business model is known to work.

This is usually the hardest problem for any start-up: Is there sufficient demand for the idea? Will people pay for it? If not, is there any other source of income? Being a copycat is less risky, in general.

The only real risk is the competition with the company whose idea you copied. However, this is not such a big deal if you operate in a different country. The differences in language, culture, and law are natural barriers to entry.

This also creates the opportunity for a nice exit strategy -- being bought by the company you copied. You already solved the hard problems for it: Dealing with the local laws and culture and also the acquisition of human resources.

And on a side note: Not everything that looks like a copycat is one: The social business network Xing, for example, started at about the same time as LinkedIn. They probably didn't know about each other. You can't call that a copycat.

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Xing and LinkedIn are both in Silicon Valley, so most likely they either knew of each other, but they took different approaches, so though they compete, which approach will work better? – James Black Oct 26 '09 at 13:58
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James, Xing started as OpenBC (Business Club) in Hamburg, Germany. The headquarter is still there. – Claus Schwarm Oct 27 '09 at 7:43
up vote 4 down vote

Usually the value is to be had in providing small differences that significantly improve the end product. Often these changes are not economically feasible for a larger player to implement, so a smaller player is able to step in and gain market share.

In your example of an ebay competitor, I imagine the small differences are things such as:

  • Interface designed from the ground up in the native language rather than a translation
  • Focus on local results, rather than trying to sell you items in Australia that will take two weeks to ship and cost 10x the item's worth in shipping
  • Local marketing done by people who know the culture, rather than a faceless corporate branding machine

In the end, you have to ask whether the cost in time, labor, and money is worth the improvement. For a large improvement, the answer might be easy. For a smaller one, it may be hard.

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up vote 1 down vote

Duplicating ideas can be useful as a way to start an application, but at some point you need to decide how to brand yourself, so you are seen as your own business.

For example, E-Bay was very successful, so you copy their ideas for auctioning.

Now you look at where they are weak. That would be that so many items you buy on it are counterfeit.

So, you make a change to ensure that everything is legit, which means you sell less, but, it may be more successful, as the counterfeit items may destroy e-bay.

If you just duplicate an idea then you are accepting the idea, warts and all, even if the business model is fundamentally flawed.

Copy, to keep a similar user experience, but fix the flaws, as you are in a different situation than e-bay was. They started during the tech bubble when there was lots of money for tech startups. That is not the same now, and investors will want to see some difference, to see that you won't be facing the same lawsuits e-bay is losing.

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up vote 0 down vote

That's right.

E-bay doesn't sell licenses for its auctioning software. Its a proprietary system meant to maximize wealth of the Ebay's share holders. They are not aiming to maximize overall gains of the world society. The people who copied them had the same goal - maximize personal benefits.

Better scenario: If eBay was not a proprietary system, atleast 1 yr of development time and costs would have been saved, and eBay could have earned some more money from Poland.

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This is an off-topic political rant that doesn't answer the question. – Paul McMillan Oct 26 '09 at 10:34
Alright pal, made changes to the answer. I hope it makes more sense now. – Arpit Tambi Oct 26 '09 at 11:56
You should remove the politics out of the answer, it does nothing to help answer, and actually detracts from it. There are other sites where you could have these arguments. – James Black Oct 26 '09 at 13:59

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