re: Should startups bother having original ideas if big companies can just come along and clone them?

I woke up on Christmas morning to this question on facebook from my aunt. Apparently she has been reading TheNextWeb =)

Hi Sally!

That is a great question. And, I get why TNW wants to sensationalize this issue. Facebook has a running history of either ripping off features from other companies, or acquiring other companies to duplicate the functionality.

The short answer is:

  • Instagram isn’t complaining for being acquired for $1bn
  • The only good reason to be an entrepreneur is to build something you love, and love building it

Getting copied is a reality of creating pretty much anything. Art. Music. Books. Movies. Products.

Imitation

In about 8th grade, I went to Lake Texoma summer camp for water week. We did canoeing, sailing, swimming, and water skiing. And, I thought I was pretty clever for “inventing” a trick. (Basically just going outside the wake, yanking the rope to get some slack, and then hanging on real tight for all the extra speed going back to the wake.) The next turn, another kid started doing the same trick. I got pretty pissy about it. But then the camp counselor told me, “imitation is the highest form of flattery.”

If your product is getting copied, you might be doing something right. At the very least it means that someone else likes the idea enough to spend their time working on it. And, it might validate your assumption that there is a big market for your product.

Acquisition

Like I said before, Instagram isn’t complaining about being acquired.

In fact, many companies can be overly focused on being acquired. Rather than focusing on building a sustainable business they keep spending money and time building a product (and a debt) they assume some bigger company will take off their hands. A lot of startup hearts have been broken when those plans fall through.

The other possibility (or distraction) is an acqui-hire. That’s when a larger company acquires your company primarily for the people and many times ends up shutting down the actual product. This is great if you want to have an exit (a.k.a. get a payout for all your work) and move into something more stable. But, for anyone who truly loves their life’s work (remember the comparison to artists, painters, writers, etc.) this seems more like ‘selling out’ than ‘being successful’.

End of the day, if an acquisition is structured in a way that actually makes you happy, then there aren’t too many complaints. In other words, don’t worry about it.

Instead

If you love what you’re doing, it doesn’t really matter what anyone else does. You should focus all of your attention and energy and creativity into building the best product possible for the largest number of people who need it.

Why spend a day of your life not working on something you love with people you love?

  • I really want to get better about publishing more of these ‘letters’. it’s a fun writing process. And, *maybe* some of these responses will be valuable to more than just the intended recipient?

  • Startups should absolutely work on original ideas because once a company gets to a certain size or point it gets really hard for them to work on original ideas. Anything can be cloned but if Big Co doesn’t have the insight, passion or obsession that founders often do there’s a good chance the Big Co clone with fizzle out. Big Co’s may clone the technology stack but they tend to tweak the UI so it doesn’t look like a blatant copy. But here’s the thing, the UI is often directly related to that same founder insight, passion and obsession. I was recently approached by a couple of “well known” developers (they had a smallish exit). They were looking to buy someones alpha (for good money), raise a seed round at a ridiculous valuation (they can do this with one exit under belt) and then hire the person they bought the alpha from. When I said, I wasn’t interested in working for them, they knew enough to understand that without the founders insight, passion and obsession they wouldn’t be able to execute the vision. They learned this by witnessing M&A flops when they worked at Big Co.