Humbling the Shameless Samwer Brothers

I have never met the Samwer brothers, so this may be unfair. But they just piss me off to no end. They’ve cloned Zappos, Groupon, Airbnb and now Pintrest with the shamelessly named Pinspire.

Bear in mind, I’ve actually defended “copycat” companies around the world. Frequently so-called clones are tailored so much to their local markets that they’re no more derivative of the original than Google was from Excite or Facebook was from Friendster.

But the Samwer brothers are the worst kinds of copycats: They flit from shameless rip-off to shameless rip-off, browbeating staff and acting like gods of the universe. Worse: They’ve been rewarded, making a pile of money from Groupon’s acquisition of their German version alone.

In my opinion, it’s the worst kind of entrepreneur. There’s no commitment or belief in what they’re building if memos like that one above are to be believed– they’re just shallow profit-seekers.

Gregory Ray (who I don’t know but just saw on Twitter) brought up a decent point in his Tweet, “Not sure what’s worse: The copy cats or the giant corporations not being able to defend themselves against a clone.” I somewhat agree.

But bear in mind, these guys aren’t beating a Groupon or a Zappos in the US. They are quickly moving to rip them off in Europe. They are exploiting the global base of early adopters by getting to people sooner than a startup logically can. In the case of many Chinese copy cats, the insane competition and rapid iteration frequently yields companies that are locally very different. But the Samwers seem to have a lock on German talent and funding in a way no one does in China. Until now with the Oryx Project, hopefully.

Corporations are at fault when, like Groupon, they buy these companies and reward the behavior. Since that hasn’t worked out so well for Groupon, future startups will hopefully think twice about throwing the Samwers barrels of cash for a copycat that is arguably built on quicksand.

So, it may be immature, but this delights me to no end. Go, Oryx Project.

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[...] What Sarah Lacy calls shamelessness, in her precious and disingenuous anxiety to elevate idea above execution (a concept she would normally scoff at), I call audacity and genius. Because the Samwers are the most successful entrepreneurs in Europe. [...]

[...] pasar lokal, mengindikasikan bahwa mereka akan berekspansi ke wilayah Asia Tenggara. Seperti yang dituliskan oleh Sarah Lacy, mereka adalah jenis pengusaha yang paling buruk. Tidak ada komitmen atau [...]

While it's true that "business is business", so you can't argue too easily against these guys rationally - or legally - none of us should forget that we humans have a sense of ethics and esthetics (which are more or less the same) and it is the right thing to expect businessmen to have these qualities as well. If you shrug your shoulder when you hear a businessman having no other objective or consideration in life than making money then it's time for you to take a moment and think.

[...] it pisses me off that Groupon paid it and made them rich enough to keep on doing it. There are two big reasons other [...]

[...] und Produkten aus dem Silicon Valley. Dort hingegen assoziiert man mit Deutschland und dem Internet “bestensfalls” die Samwers.Es wurden schon unzählige Analysen zu der fehlenden Konkurrenzfähigkeit der hiesigen [...]

I have to admit I skipped most of the comments to get to the reply button. What's wrong with creating a company, building it up as a localized version of a bigger company and then selling it to that bigger company? Time is worth alot of money to big companies like Groupon and Google. If a small company wants to build up a localized clientele based on your business model, successfully creates profit out of it, and then sell it to you, why wouldn't you buy? They have essentially done all the work for you. The bigger company is now simply acquiring assets, value and infrastructure. The costs at work here are greenfield costs (building your own company in that local region) VS. acquisition costs. The only time they shouldn't buy is if the acquisition costs are way more expensive and then it's not worth buying anymore. It doesn't matter where these companies are - US, Germany, Asia, whatever. It doesn't get in the way of buying something which is VALUABLE to you.

[...] udah ada jiplakannya di sono) sebenernya nggak *jeng jeng jeeeeng* Yang bikin Pinspire ini adalah Samwer Brothers, asal dari Jerman (?) Atau Belanda (?) Ya Eropa sono [...]

I'm Really Really Sorry to have to say this to you Americans but the best Copycat in the world right is not China nor Germany but USA itself! And by America I mean Google!!!l Google Products are copycats... far worse than the Samwer brothers! Apple Makes Iphone then Google makes Android, Facebook is worth billions now Google made a CopyPasted version Facebook where they nevertheless changed Fonts and Headings. Yelp became huge now Google created places, bought Zagat, etc... and the list goes on and on. I think that at the end of the day, its all about delivering a great product. Not coming first!

[...] – You should also read Sarah Lacy’s post on Pando [...]

Good artist copy, great artist steals. I like it! I wanna clone Rocket Internet. LOL

[...] pasar lokal, mengindikasikan bahwa mereka akan berekspansi ke wilayah Asia Tenggara. Seperti yang dituliskan oleh Sarah Lacy, mereka adalah jenis pengusaha yang paling buruk. Tidak ada komitmen atau [...]

[...] been a lot of talk about shameless Samwer Brothers (Rocket Internet), their expansion to Singapore, Malaysia and our dearest Indonesia. Even their [...]

I'm no fan of copycats but the only reason they succeed is because the original company hasn't capitalised on the idea by going global faster. I believe a lot of US startups are staggeringly shortsighted in their market focus when with some simple tweaks the product can work internationally and eliminate copycats. This isn't about expensive local sales teams but simple product decisions. It's the same mentality that led to a lot of content piracy in Europe - the big labels and studios decide Europe should wait a year for the album or movie to come out, but consumers want it now, have no legitimate way to get it so pirate it instead.

Money without passion is doomed to fail. Of course, that might take awhile. In the meantime...

Great piece, well said - Hans @qiming

One of the worst thought out pieces written on this blog.. People hate Samwers because they have made tons of money copying successful business models, there are hundreds of other people who try to do the same but fail and people are fine with that!

[...] Humbling the Shameless Samwer Brothers | PandoDaily "In my opinion, it’s the worst kind of entrepreneur. There’s no commitment or belief in what they’re building if memos like that one above are to be believed– they’re just shallow profit-seekers." [...]

Just a reminder: The Samwer brothers got big in Germany a couple of hundred years ago. When they created an eBay clone called Alando. This was way before Amazon or eBay even considered an international launch of their shops. So, the Samwer brothers are not only _the_ copycats of Germany - they were the ones who invented copycating it in the first place.

Good to see the majority of these comments recognise the Samwers' talent. They practice 'lean thinking' at scale. They've looked at the process of launching a startup and have realised they can get a third party to do their early customer development for them using a statistically significant sample size. Quite brilliant really.

america trips over its worship of individualism. copying is a noble profession in many cultures.

Look what Alexia is writing over at Techcrunch: We’re also hearing whispers of a Google Pinterest clone in the works, which makes sense, as it seems to fit with Google’s general “if you can’t buy them, clone them” http://techcrunch.com/2012/01/19/ginterest/

While the sentiments on this topic are understandable, just criticizing the clones misses some important points. It's not only the idea, it's the execution that makes a business successful. The Samwers get these Americans companies at their weak point, that is execution in international markets. Which is a strength in Europe. And it's good for the market. Why should European consumers have to wait years for American business to get their ass up and start operating in Europe in the local languages? It makes sense that the market is producing such copy cat companies. There is no such moral that businesses have to be started based on a original idea and it wouldn't benefit consumers either. American companies are going to learn from this in the future, and then again consumers will benefit it.

To sum up the article in a few words... "I don't like them cause they're douches."

It seems strange, culturally, to make a counter argument that justifies a copycat - a word which defaults to a negative connotation. However, based on what we understand of free market economics, what about these moves is really surprising or fundamentally unethical? We certainly admire the true innovators, that's a given. However, if all these guys are doing is capitalizing on the the innovation of others... then they simply miss out on the favorable designation of *Innovators*. How much does that lacking designation impact their bottom line? Perhaps what they are innovating is how to become a lightning fast competitive force in the startup industry at a large scale - one that knows how to reproduce startups that have not been able to protect their intellectual property and taking them into new markets faster than the original guys can make the jump. Tech pundits tend to complain about the "broken" US patenting system, how it stifles innovation, approves patents for inconsequential technology (obvious to those skilled in the art), and allows patent trolls. However, that same patent system is one of the only competitive barriers to entry that can block large scale operations with huge capital outlay from cloning and consuming their current or future markets. So are we arguing to stop stifling innovation and fair competition, but also arguing that competition becomes a bad thing when large operators do what the market allows? Groupon is impressive. The 3 highlights for me are (1) its simplicity, (2) its tremendous copywriting team, and (3) its successful scaling and growth. However, do we really think that Groupon is so "innovative" that nobody should dare compete with it or outrace it into other International markets? The one thing you cannot clone "easily" is the team (presuming they are truly innovative leaders in a particular niche). Building a highly valuable team capable of sparking/guiding innovation on a day to day basis is a competitive advantage that even behemoths with huge copycat-capital at their disposal can find hard to overcome. They'll constantly be playing catch up. Although they can copy quicker than the original was created, they lose lead time. They'll lack first mover advantage and strategic foresight, and they'll have real difficulty predicting the next evolution to be inspired by the true innovators. They also still face competition from others like themselves who have the capital to compete in the same space! Even in the absence of an International patent to keep them at bay, they may end up having to acquire the original innovators if they want to continue to rule the market. That means the original team gets a pay out, and likely continues to operate their "baby" as a semi-autonomous subsidiary. It comes equipped with some bull dogs at the top ready and willing to throw money at accelerating their growth. Isn't Groupon an example of an easy target? What smart investors would turn down a profitable opportunity for a proven growth market with low barriers to entry? I say all this even as myself and my team represent a tiny bootstrapped venture that stands to have a difficult time breaking into our target market. Yet, we invite this kind of competition and plan to leverage it where possible. We call it collabetition. It may not feel nice during the times when you find yourself at a competitive disadvantage or are watching your target markets get eroded, but it's hard not to admire from a purely philosophical consideration of "competition" itself.

Thank you Sarah. It is great business on their end, but does explicitly miss the whole point of being passionate about what you're creating. If the end goal is purely financial, just become a trader.

Um, maybe they are passionate about making copies?

It's funny what people come up with as reasons against copying working business models. I didn't know that creating own ideas is something we all have to do in life.

But um, Sarah, isn't your new business a shameless clone of TechCrunch? And SiliconAlleyInsider? And GigaOm? And...?

No, because the value in these sites are the writers, not the idea.

Exactly, and the value of Samwer's copycats is the execution, especially the execution in those international markets where the original companies failed or were too late.

BWWAAHAHAHAHHAHAHHAHA

Totally agreed! The Samwers really excel at executing and they deliver useful services to markets that were not served. If you want to talk about copycats, you have the Zynga-Vostu example. I don´t understand the general need of Silicon Valley journalists to underestimate these guys.

Dumb question, but is Groupon available in Germany? If not, then yes, its copying the 'idea', but if the service didnt exist..?

It is, and I think it was when the Samwers launched DailyDeal. But you have to understand that couponing is not a big deal in Germany. I have not once met anyone who would use a coupon in a supermarket, for example. Therefore, they did not only copy the idea but took a big risk as well.

The one who wins is the one who writes the last word in the history books. Shameless yes, but business in general is shameless. Those who don't understand this concept are the ones that struggle. We shouldn't look further than Apple and all their faults over the years, from Ip thefts to strong arming manufacturers and competitors. Windows anyone? And its why Google's "Do not evil" is a oxymoron.

The Samwers are like Japan in the 80s. And they're the best in the world at what they do. I'd stay tuned for less cloning, more business-building. Don't think that Project Oryx will not copy successful ecommerce plays.

@shaun the idea is irrelevant here. they just pick what seems to get some traction in the USA (it doesn't matter if there is no experience or synergies with past companies) and get a similar product (no better, no worse) out. and then they hammer the market with huge marketing budgets to get the #1 position at all costs. that strategy ensures that 1) other startups with less money can't compete even if they have a superior product and 2) they are ideally positioned for acquisition by the US guys.

Good ideas should be copied.

Not so shamelessly; the extent to which they copied Pinterest is unbelievable.These guys are running a virtual chop shop. No ethics at all.

Good ideas WILL be copied. But by whom? These guys recently launched a site to compete with (my) Baby.com.br in Brazil. I've met with some of the people that they've already fired or who have selected to leave from this particular project (they've only been up for two months) and everyone agrees. They. Have. No. Passion. They don't care. They hire and fire on a whim (in a bad way) and throw money at problems and copy, copy, copy, and hurt other startups who have better ideas, better teams and less money (and face it, who has $20MM to throw at a rough idea). Sometimes it works. Sometimes they give up and take their money back out of the company, fire nearly everybody and move on to their next idea (wimdu.com "raised" $100MM, then when AirBNB matched it with their own round, they un-invested most of it and shrunk the team). This isn't mere copying. It's something else. Something bad. Something toxic. And, man oh man, I wish it would stop.

Its all about making money .. their business model is acquisition. I personally do not believe in this model but I know this exists in the Valley also.. Its called build to sell. The only difference is that they copy to sell.