Fighting the Copycats

Everyone Has Big Ideas

There is a widely popular, but incorrect, belief that the secret to growing a successful startup is The Big Idea. In both fictionalized movies and supposedly truthful interviews we are told stories of visionary founders who came up with a creative, breakthrough idea that then catapulted them to success.

The reality is less dramatic. Good ideas are everywhere. Even great ideas are not particularly rare. 

Every time a company brings an innovative idea to market, there are hundreds of people who assert that they thought of the idea first. Frequently, these people are telling the truth. They resentfully point to articles, blog posts and past presentations and demand some sort of credit. 

Their indignation, however, misses the larger point. Is is extremely unlikely that either the disgruntled blogger or the successful entrepreneur were really the first to come up with the idea. Ideas are everywhere. A thousand people might have independently come up with the idea, but all of the credit will always go the person with the confidence and competence to build something based on the idea.

This is as it should be. 

New entrepreneurs tend to be far too concerned about someone stealing their idea before they can get to market. This is particularly true when speaking with potential investors and partners. These people put far more weight on the ability to execute than the creativity of the idea. 

Ironically, a truly novel idea — one that only you have thought of — is a curse. No matter how well you explain (and re-explain, and re-re-explain) your idea, most people will simply not be able to grasp something truly new in the two or three minutes of consideration they give it. You will be told in a thousand different ways that what you have is not new, or that the fact that no one else is doing it proves that there is no market for it.

Copycats are by definition followers. They do not have the vision to appreciate the potential of a new idea or the courage to execute on something abstract and risky. At the concept stage, the advice and introductions you receive from sharing your ideas far outweigh the remote possibility that someone will try to copy them. 

Unfortunately, this situation will not last long. 

Send In The Clones

The real danger, perhaps certainty is a better word, of being copied comes a bit later. Once you start achieving a degree of success and visibility, those who dismissed your idea out of hand will start claiming that they thought of it first. Many of those who lacked the insight to understand your vision when you were starting out will look at your success and declare ”Hey, that’s simple! I could do that.”

Frequently, they will be right.

Earlier this year, an entrepreneur I know woke up one morning to find that a competitor ten times the size of his firm had launched a product that was a shameless copy of his own. The color scheme, menu layouts, status messages and pricing plans had all been appropriated. The only significant differences between the two sites were the logo at he top of the page and the company information at the bottom. 

Our entrepreneur was understandably furious. He had spent years creating an innovative, useful web-based service and building his company. He had not taken venture capital and had built his firm up via dedication and long, unpaid hours of work. His customer base had grown steadily and he was finally stating to some get real traction in the market.

Literally overnight, everything he built was now at risk of being destroyed by a much bigger and well-funded copycat. It’s a scary situation. The copycat has an established customer base, a bigger project team and a much bigger budget. 

It may not be moral or fair, but this kind of copying by larger competitors happens all the time, especially in software and web-based services where a product can be copied quickly and inexpensively. And startups are by no means the only victims. Copying happens all the way up the food chain. Larger fish eat smaller fish whole. Mid-sized companies steal from start-ups, large companies steal from mid-sized companies, and some global powerhouses are infamous for taking technology from large firms and then driving them into bankruptcy. 

As ugly as the practice is, every founder should expect and be prepared to be copied. It’s nothing personal. 

Of course, like most entrepreneurs in this situation, our wronged founder’s first instincts were to go to the press with his story and to sue the large competitor. While I understand the sentiment, both of these approaches almost always fail disastrously. 

Taking the matter to court is completely out of the question. Regardless of the facts, a legal battle with the larger firm will drag on for years and exhaust the startup’s resources. The considerable time and money spent on the legal fight continuously saps time and money away from sales and product development. As the legal fight grinds on, the start-up falls further and further behind in the market. In the end, even when the smaller firm “wins” these fights, they are often already in bankruptcy. 

Similarly, trying to shame the copycat in the press almost universally backfires. Larger firms have the advantage here too. Trade journalists will go to great lengths to avoid taking sides early on, and those who do tend to side with the big names. 

It’s tempting to blame journalists for not standing up for the little guy, and in some cases such criticism is justified. For the most part, however, legal squabbles do not interest their readers, and responsible writers are hesitant to take a strong position on situations they do not fully understand. (I confess that I do this too. I’ve changed enough minor details in this article to ensure that readers will not be able to identify the companies involved.)  

The Fight Of Your Life

Lawsuits and public accusations my provide catharsis, but they lead to failure. If you and your start-up ever find yourself in this situation, the best strategy for response is two-pronged.

First, don’t focus on your competitor. Address the issue briefly and unemotionally in public and only if someone else brings it up. Keep both your public and internal focus on your customers and your product. Your understanding of your customers and their needs is the most important, and perhaps the only, advantage you have in this fight. After all, if the copycat had a good understanding of customer needs, they would not have had to copy you.

Second, streamline your operation. You are entering into a fight for your life, and now is the time to take a hard look at exactly how you and your team are spending time. You need ensure that every minute is focused on working with your customers and directly adding value to your product.

If you are doing accounting internally, outsource it. If you are managing your own servers move to the cloud. If you are doing your own system administration or database administration, move to a PaaS. 

These kinds of non-core-value activities are all things a larger competitor can do at least as well as you can, so you need to spend as little time as possible on them. Every hour developers spend setting up a database or reading documentation about configuration files delays your product release by another hour.

Having a better-funded copycat enter the market is usually the largest challenge a start-up has faced up until that point, and many do not survive it. Those that go up against Goliath and win, however, do so by focusing on customer needs and and eliminating or outsourcing all activities that do not contribute directly to their product’s core value. 

This article was originally published in Japanese by IT Media.