Entrepreneurs are irrationally attached to innovation. In some cases, fresh ideas are absolutely required but an attachment to originality and the corresponding aversion to exploring ideas pioneered by others can often lead to a significant delay in success (or even failure).
Startups can fail for many reasons. Even if an entrepreneur gets everything right but errs on a specific aspect (say distribution, pricing, onboarding, or even the choice of technology), it’s possible that her entire project fails.
Moreover, getting several things right in one go is always significantly more difficult than getting one thing right. Therefore, an entrepreneur should strive to have clarity on what few aspects of the total solution delivered to customers need originality and everything else should be borrowed from current best practices.
In short, innovate on a single factor but copy everything else.
By copying what’s working for other companies, an entrepreneur can focus on doing just one or a few things really well while resting assured that the remaining parts will probably just work out of the box because they’ve been tested and proven successful by others.
The most popular example of successful copying is all the Amazon clones that popped up in different geographies. Amazon in the US successfully demonstrated that people with Internet access are willing to buy stuff online. They showed that there was a viable business model in online retail. Entrepreneurs all over the world took this insight and applied it in their respective geographies. Actually, what Amazon provided to the world was more than proof of business model. They innovated on the user interface as well, which is also what Amazon clones copied happily.
However, all these clones were not blind copies. Different geographies have different challenges that require innovation. Take Flipkart for example. It’s a multi-billion dollar company in India, and its founders learned the model after working at Amazon. Flipkart founders took everything that Amazon had tested and proved (business model, org chart, user interface) as a starting point and innovated on only a few variables they thought needed originality: lack of wide logistics infrastructure and credit cards in India.
Hence, they pioneered cash on delivery to make online retail work in India. Flipkart ensured they didn’t innovate on things that Amazon proved to just work. Imagine if along with India-specific innovations, Flipkart also changed the user interface, organization chart, or business model. With so many undecided variables, a suboptimal solution for any one of them would certainly have meant failure for Flipkart.
A note of caution: by suggesting copying or stealing ideas, I don’t mean to suggest that you do it blindly. Understanding why a solution works is more important than knowing that a solution works. It’s extremely easy to think something is a best practice when, in reality, such best practice depends on some non-obvious detail that you missed.
For example, getting inspired by the iPhone’s App Store, many TV manufacturers launched their own “App Stores”. None of them got any traction because the important detail that was lost was the context in which a phone is used. Unlike TV, which is stationary at home, a mobile phone is in a person’s pocket. Apps on mobile work because they’re always in immediate reach of the user. Apps on TV however stagnate because the incentive to go to the place where the TV is located reduces because of the additional effort of walking to that place, especially because the user has all such apps in his/her pocket. This suggests that copying ideas is not a simple thing but actually requires careful thinking and analysis.
Remember: innovate only on one thing that differentiates your business; copy everything else.
This essay is part of my book on mental models for startup founders.
PS: I invest in startups
If you’re building something transformative and are raising a round, contact me. (I don’t lead though). My cheque sizes are typically $25k-$100k, but I’m flexible.
When you contact me, send me five bits of info about your startup:
- What are you building?
- Who is going to most benefit from what you’re creating and what’s the benefit they’ll get?
- How are current alternatives inferior to what you’re building? (If required, feel free to provide a table or a list with alternatives)
- Team CV / resume / profile (detailed, if possible)
- Highlight a few self-initiated projects different members of the team have done before
Have an opinion on this essay? You can send your feedback on email to me.