Creativity vs Copying

I did my last MBA semester in ESADE business school in Barcelona as an exchange student. There I met an interesting entrepreneur that was invited to our class to give a talk about his experience as an entrepreneur. Someone asked him how did he came up with his business idea ? And his answer was shocking. He said:

“My whole family were entrepreneurs, and I know I want to be an entrepreneur. So what I did is go to TechCrunch (the blog I previously ranked No.1), see what successful startups are doing in the US , check if I like the idea, then check if we have it here in Spain. If not, then I’ll do it. This is how I started my company that now generates EU20M every year!!!”

He was also part of one of the most successful incubators in Spain called Seed Rocket. So I talked to him about our Startup and then I asked him if our Startup will be a good fit to the incubator, he immediately asked:
Him: Is there other startups doing something similar?
Me: Somehow yes, a couple but we are different.
Him: Good because if you are the only one doing this then we will not invest in you!!!
While I don’t agree with his strategy, this is a fact. Many first class VCs around the world are now following this strategy especially when investing overseas. They focus their investments in companies that are a copy of a US startup. Some take it to the extremes like Swamer brothers that only invest in companies that clone successful US Startups. Others do it to make less riskier bets such as Sequoia Capital investments in Brazil.
I know that many countries are now adapting the “copy the US” strategy to create a successful local startups. But, these types of companies will not be global brands with a multi-billion dollar business, which means we need to avoid copying in the long-term. However, does it make sense to copy in the short-term???
If you look to history you’ll find that Japan used to copy from British cars in the 50’s and 60’s and now they produce the best cars in the world. Taiwan also used to copy everything, now they produce one of the most sophisticated high-tech smart phones (HTC). China is one giant copy machine, but soon will be a technology hub.
This is the cycle of creativity, starts with learning from others experiences and then starting to build on it. I like this video that illustrate the point I’m trying to make here (at least watch the first 5 min)
The combination of the fact that global investors prefer to invest overseas in US clone startups and the fact that creative nations start with copying not innovating, made me think that copying might be a good solution to get things starting over here . I used to hate copycats so much and I still sometimes do, but I started to realize that it might be a natural step into the right direction, the direction of a creative nation.
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3 Comments

  1. Mohammad MJ

     /  July 28, 2012

    Good stuff as always bro :). Alex Cruz (CEO of Vueling airlines; he was originally from Clickair before they merged with Vueling) came by and gave a lecture when our Strategy 1 professor invited him. It was during the week we did a bunch of airline cases, and he basically said they copied the Southwest Airlines model and implemented it in Europe. So this may work for larger corporations too sometimes, not just start-ups.

    But it does indeed make sense for start ups as well. If you copy from a successful business abroad and you do it well then there’s a good chance it succeeds.

    Reply
    • Thanks for the input Mohammad. Yes, it does. Especially if there is a geographical limitation for the innovator to enter these markets. In Southwest case europe is considered beyond its reach, which gave room for a european player to take advantage.
      For startups they know that US companies will eventually dominate and grow internationally, so they copy fast hoping that one day the US company will decide to enter their market and acquire them. That actually happened to former MBA students in HKUST that created a company called uBuyiBuy that was acquired by Groupon for probably US10M in less than 2 years from its creation.

      Reply
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