Patrick HallerArgentina may be the “King of Cloning,” but it is not the only Latin American nation with a propensity to copycat successful technological ideas. Parts of the Brazil programmer community are following this practice, and some have found local success given the size of the domestic market. Where does pure copying stop and innovation begin? Picasso once famously said, “Smart people plagiarize, but geniuses plunder and steal.” But artistic geniuses like Picasso and Matisse were also creating something new with each brush stroke and application of color.
Some developers look at copycatting in this light, believing – and realizing – that copying ideas, adapting them and improving them is an essential part of innovation and progress. Others, while not eschewing this school of thought, take a decidedly sidelong view of cloning, instead evangelizing for the need of “the next big thing” to come out of the region and attain global success.
Clones Keep Ideas Local
Fabrice Grinda, Co-CEO of OLX, itself an adaptation of Craigslist for Brazil, India, Pakistan and Portugal, says that there are hundreds if not thousands of examples of copycatting success stories, “Gilt is a great adaptation of the French company Vente Privee. Mercadolibre is the eBay of Latin America. Ozon is the Amazon of Russia. In almost every country in the world there is an eBay, Amazon, Craigslist, Google, Expedia and Zappos of that country.”
“Investors don’t like to take both market risk and idea risk. As such if they are going to an uncertain market, they are more willing to back copycats.”
But Gringa doesn’t think the word ‘copycatting’ does justice to the concept as it “implies you are doing an identical copy, whereas in fact you are just copying the basic concept and making lots of improvements and adaptations.” That, in and of itself, requires creative thinking in order to meet the needs of a specific market. As for the reasons developers copy, Gringa believes it is because they see an idea that can be made better or made to work in a geography where it’s not yet implemented.
One of the most outspoken critics of copycatting, and localized thinking, is Andres Barreto, an accomplished generator of new ideas and companies such as Onswipe, Grooveshark and PulsoSocial. “The problem,” he explains, “is that type of entrepreneur is not going to help with better exits, or have a global impact for the region.”
He also advises that to implement a copied idea is actually harder than forming an original idea, “and for the most part those products having an impact don’t win (solely) because of technology and can only win if they have another component.” To sway developers from this path, Barreto takes every opportunity to talk about the perils of cloning, and encourage them to create something new. “You don’t have to build the next Twitter or Instagram. Build the next solution for left handed designers – but not just in Argentina – build it for a global market.” He advises: “Don’t start local. It takes a little bit of effort of looking outside of your world.” And always think in terms of the big exit, which to Barreto signifies success.
Market Risk & Idea Risk
“In technology there is often the belief that arriving second to the consumer is no good,” says Giles Dawson, CEO of Anacondaweb, “that is not to say there is not a big market if the product can be made much cheaper, maybe sacrificing quality in the process.” But Barreto advises that there are local investors interested in cloning companies. However, they should not expect big returns.
Grinda analyses this further, “Investors don’t like to take both market risk and idea risk. As such if they are going to an uncertain market (e.g.; Brazil or Russia), they are more willing to back copycats.” In addition to being an entrepreneur, Grinda is also an angel investor (as is Barreto) who has invested in 106 startups.
“In the US, I invest in new and innovative ideas because the market is so big and forward-thinking that even if the idea is smaller than we suspect, it might be big enough to support an interesting company. In the rest of the world, we invest in adaptations of successful ideas. This way we never take idea risk and market risk simultaneously.”
While not considered piracy, which would entail copying code not just an idea, the ethics get more complicated with cloning when similar brands and visual aspects are used to confuse consumers, says Dawson.
A true champion of cloning, Grinda drives home his points by asking, “Should Google not have been allowed to exist because Alta Vista existed before? Should Facebook not have been allowed to exist because Friendster came before? Of course not, the very process of innovation is driven by iteration within and between companies.”
Whereas Barreto states, “I don’t think you have to build a clone to be success – but if you have – now build a global company not another clone. If you say that you are building a product with an exponential growth of users, then you have a better chance of getting investors.”
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