PandoDaily is on the record as being pretty appalled by the Samwer Brothers’ blatant cloning of successful Internet products and businesses for repurposing in other markets. Rocket Internet deserves the criticism, and straight-up stealing of ideas should be openly excoriated at every opportunity. But the view of Rocket from here in Asia isn’t necessarily so negative.
I recently got on Skype with Adrian Li, an entrepreneur who worked with Rocket in China, to get his perspective on the rip-and-run incubator. Li (pictured above) was a co-founder of Airizu, a Rocket-backed Airbnb analogue for China. In nine months, the platform has cleared 250,000 nights booked, and in the last three months the site has grown by more than 20 percent a month, Li says. However, for personal reasons, Li is now exploring opportunities for a new Internet venture in Southeast Asia, where Rocket is investing aggressively. He is likely to work again with Rocket. Obviously, his opinions on the company are a tad biased, so keep that in mind when you read ahead.
Li thinks that in Southeast Asia in particular, Rocket is a positive influence on the startup ecosystem. Its presence means the region will benefit from more attention from venture capitalists, angel investors, and other forms of capital, he says, which in effect lowers the barriers to entry for startups, whether those barriers be psychological or tangible.
“Rocket has brought with them that confidence that $100 million companies can be grown within the region,” says Li, who has an MBA from Stanford, an economics degree from Cambridge, and was formerly a banker at JP Morgan. In 2010, he sold an online English-training startup to Eleutian. ”Rocket by itself has brought competition [to Asia],” Li says, “but it’s also inspired a new generation of entrepreneurs to come in and try something.”
While at Airizu, Li was on the phone with Oliver Samwer – the leader of three Samwer brothers – on a weekly basis. He says there’s a lot any entrepreneur can learn from Oliver, who is incredibly focused and knows the right questions to ask. He’s also very numbers and data driven, which is key to Rocket’s scary efficiency.
Li doesn’t have any qualms about Rocket’s approach of – let’s be generous – “borrowing” ideas for businesses. ”I’d say that the hard work in creating a startup, and the success of a startup, is not from the innovation of an idea so much as the execution of that idea,” he says. “Ideas are easy to come by, but execution of them is pretty tough.”
Li’s rosy views of the Samwers are supported by Kevin Huang, the founder and CEO of Hong Kong-based digital advertising company Pixel Media, which also has a footprint in Southeast Asia. Huang says Rocket’s presence in the region is an important validation of the market. (He also offers the disclaimer that Rocket has been a Pixel Media client.)
“A lot of companies are investing in Korea and Japan and Australia and that’s a given,” Huang says. “Over the last ten years or so you haven’t seen many companies make investments in Southeast Asia.”
Rocket also brings with it a host of positive cargo, says Huang. The company is setting up a bunch of offices in the region, hiring hundreds of people, and has already launched a handful of businesses. Even if those businesses fail, the contribution to the talent pool will be significant. It will also be spending on infrastructure and advertising. Says Huang: ”Their presence has been really very positive.”
Huang does note, however, that Rocket will have to adapt its businesses to fit with Asian cultures, and tweak their models for the specific markets, which vary wildly compared to the West.
Perhaps one of those adaptations could be something totally outlandish – like coming up with its own ideas.