The European entrepreneurial community often comes under fire for being prone to copying successful ideas from the US and importing them over here. Unimaginative, unambitious and unethical are just some of the words used by critics to describe this approach. However, I believe that these “copycats” can create a huge amount of value and often transform the markets in which they operate. This is because it is not just the idea, but the execution of that idea, that creates a unique proposition and often redefines how a problem is solved.
European entrepreneurs should not be shy about creating “copycat” businesses – but they should strive to make them into innovative, global success stories that can be even more successful than the original.
The concept of copycatting has been lucrative for the likes of well-regarded repeat entrepreneurs, the Samwer brothers. They have perfected the craft and created a fortune by building a number of clones including Alando (a clone of Ebay), Jamba (of NTT DoKoMo), Zalando (Zappos),and CityDeal (clone of, and now acquired by, Groupon).
People forget that the iPod was not the first MP3 player in the market, Facebook was not the first social network, and Google was certainly not the first search engine. Yet these companies are lauded as great innovators of our time, companies that "changed the game".
So what is it that differentiates a simple copycat from a genuine innovator? I’d like to put forward the “Triple A” framework as the answer: Ambition, Approach and Assets. Here are some of the questions entrepreneurs should ask to differentiate a "me too" proposition from a genuine innovation:
1) Ambition: How big am I willing to make this idea? Can I beat the original companies at their own game or am I building a company to “flip" quickly?
2) Approach: How will I approach this challenge differently from what’s gone before? What can I do better?
3) Assets: What do I have or need to obtain that will allow me to improve the solution? And then, how can I sustain that differentiation – or even build on it?
When Facebook launched I was a student at Harvard Business School. When I heard about the project I thought "another one?" At that time I was aware of FriendsReunited, MySpace and ASmallWorld to name a few social networks that were being used extensively.
Ultimately, however, the Ambition, Approach and Assets that Facebook developed enabled it to create something unique. Its aim was to connect all people through social networking. It allowed everyone to use their own names and the platform became an extension of their real identity, as opposed to using a pseudonym, handle or a fake name. In addition, it leveraged the insights of a younger generation and the changing nature of communication and software development to create a unique user experience. In other words, Facebook "reinvented" the recognised concept of social networking.
On the opposite end of the spectrum, Vente Privee is a great example of a European success story built on an original concept. It was invented in Europe, blossomed in Europe, only to be cloned by US start-ups like Rue La La and The Gilt Group. How so? Vente Privee was slow to expand outside of its French homeland and now it is the likes of The Gilt Group that are perceived to be original inventors of the "private sale" model of online discount selling of fashion and other goods.
Clearly we are not short of great ideas, but we need more European companies to compete globally and raise their ambitions. Look at Skype and Spotify – two global companies that underline the far-reaching potential of European start-ups.
We like to back entrepreneurs with great aspirations – people who take a unique view on an existing challenge. Seatwave, the largest European fan-to-fan ticketing marketplace, is one of those companies. Like Facebook, the concept wasn’t new, but chief executive Joe Cohen’s approach to the business idea was new. Differentiating it from other ticketing websites, Cohen has assembled a world-class team and built a multi-country marketplace adapted for the local tastes, regulations and logistics of individual European countries. He has the ambition, approach and assets to build a lasting success story.
Sometimes great ideas grow in ambition over time, but often listening for key elements of the “Triple A” framework will identify ones that will stand the test of time.
Davor Hebel is a principal at Fidelity Growth Partners Europe.