Article updated: [9/10/2014]
Walk into any entrepreneur conference or brain storming session and you will hear ideas being shared all over. Try and talk to an entrepreneur about their secret idea they have been working on and they just might ask you to sign a Non-disclosure agreement (NDA). You might look at them and think, “why would I want to steal your idea when there are literally thousands being shared all over in this room but also on the internet?”
It takes an average person to put in the hard work to find the next best thing but it takes a certain genius to work smart to find the simplicity of doing business. A smart man might work day and night on his project in his basement trying to figure out all the problems and get it to work right but it takes a genius to pull together talent to do all the work for him. He might create a forum online asking people how they might solve a simple problem. He might write down everyone’s answers and then go back in to the same forum, while creating another forum elsewhere, and ask the question, “what would be the first step to building that thing,” and while people are responding to that question in the other forum he made, he could pose the question, “say someone needs help with <the very problem he posed in the first forum> and this thing that does this and that, what would be the tools he needs to build it?” This man simply took the work of other people and put it together in a way that worked without so much as typing on his keyboard.
That man working in his basement is the image we all have come to know as the American genius who worked out of his garage or basement and created the next great American company. He is remembered for his hard work and dedication but also for his genius of creating something no one else could think of. The second man is today’s business man who is looking to establish himself, not as a hard worker of business or even a genius of business, but as someone who knows how to clone and replicate on any scale. This man views business school as the connecting factor to people of importance but also as a way to focus their view on what everyone else is doing.
If you were to ever meet someone who steals other people’s ideas for a living you might call them a thief but it’s not considered stealing if where you come from it doesn’t exist. All over the world there are people who look into what other countries are doing and then take that company’s idea and create it where they live. In their point of view, no sense in racking your brain over creating the next original business idea, when you can take what already works and build it for your country. You don’t need to know a lot about business to work as an entrepreneur in this fashion just need to know a lot about different companies and how they operate in order to clone and replicate.
Meet Marc, Oliver, and Alexander Samwer who are all about to become billionaires off the very idea of taking American and Chinese companies and cloning them all over the world. If the idea is successful in America then why can’t it be successful in Germany or Indonesia, after they have made a few tweaks to them? As it turns out it can be a very successful operation for these brothers and that is exactly what they learned in business school. During their time in America studying in San Francisco they ventured out and explored what American companies were doing and studied them. They learned everything about what they were doing, and even wrote a book about it, so that they could then take that and build it back home or anywhere that needed it.
Theses area few of the companies they have cloned and made millions off of and soon to be billions off of.
American Company Cloned Version
Many of the cloned companies have since been absorbed into their American originator after finding out how successful they were in other countries. This helped the American company to expand their operations and then study the clone’s operations of how they matched cultural and consumer interests, which is not an easy thing to accomplish.
If you look at their company’s main website, Rocket Internet, you can see how they show all the companies they have cloned all over the world from companies inside China and the U.S. Their whole business model of entrepreneurship is not to create the next original thing but to take what already works, improve it to the customers you are working with, and sell to them. It’s very difficult to come up with an original idea and almost not worth the effort anymore when you can simply take what someone else has already done and make it your own and then build it.
After their company goes IPO each brother will probably take home close to a billion each or maybe a little more. The important thing to understand about how they did business was that they held majority voting power in their company in order to stay in control. When you study their company, they created a company that has specialized in the art of cloning businesses, something you don’t hear talked about very often. Instead if you were to ask a random entrepreneur what business they are working on, chances are you won’t hear them say, “I take companies that are already successful and clone them to work in other countries.”
What they did was a very smart move. They worked smart not hard, but they did put in the long hours and hard work to make it all happen but they didn’t spend wasted hours trying to come up with the next best thing.
Tips for Entrepreneurs reading this
1. Don’t look at this and say, “oh, well I will just google “companies in Australia” and find one to copy and I too will become rich.” If you read this article and think that is how easy it is, you are forgetting the hard work they put in first. Yes, these guys just copied business models and took them else where but you are forgetting that they studied these companies to understand every aspect of how they worked and why they worked.
2. Maybe you have an MBA and know a thing or two about business and would consider doing what they did. Great, go for it, but how will you raise the funds? The challenge to doing what they did was that they scaled their business clones very quickly to match the demand that was already there. If you think you can clone, let’s say, Amazon again in another country, well just how do you suppose you will be able to meet the demand that will come from it and not only that but how will you manage to survive financially, Remember, even though Amazon is the giant of internet shopping it still struggles to pull in a profit and for the first ten years it was in the red and just recently in the news it posted a negative earnings.
3. Start small and then slowly scale with an idea from another country to see how it works. Just because one restaurant in another country has a long line every night doesn’t the same thing in a country where people don’t even know what half the things on the menu are. Maybe you found how one company has fixed neighborhood crime by installing special lighting at community parks and waling areas to get people out more. It might be a good idea first to see what kind of people make up that neighborhood it works so well in and why.
4. If what you read sounds so easy that it has encouraged you to find an idea and clone it and you have never started a business before then you are setting yourself up for hardship in the end. In the many articles I have written the one thing I emphasis the most is putting in the hard work. What the brothers did was take another person’s idea and make it their own but selling that to investors was probably not an easy thing to do and all the setbacks and hardships they went through showed that they did not give up. Scaling an idea like Amazon on the internet is probably one of the greatest challenges of creating a business online. Read books like How to Get Rich and How to be Rich. They will wake you up to understand just what kind of work hours you will have to put in to get any business up and running, not to mention one that is profitable.
5. If you find a company overseas and you know for sure that it does not exist in your home country and you think you are onto something, do your homework and study that company like you were in college. Learn how it manages its operations, how it hires people, how it markets and sells, the company culture, where it gets its financing from and anything else you can get your hands on. Read magazine interviews if there are any. If you find out that company is struggling, don’t get turned off by the idea but find out instead why; what could be causing that and if those same problems might occur in your own country.
6. Just because it worked well for one person doesn’t mean it will work the same for another. These guys are the cloners of businesses and that is something they have specialized in. They are the best at it and they have learned to turn it into a lucrative industry.
7. Ideas exist everywhere and it is evident by what people are doing with crowdfunding sites. No doubt someone is on those sites cloning some of the ideas they have found and producing them in their home city or state or even country. But take idea in stride and figure out all you need to know and out of respect, invest in their idea, if you plan on copying it.