Jul 18, 2016 ยท 2 minutes

“Mr. Samwer said over-aggressiveness led to some mistakes” -- Wall Street Journal

If that isn’t the understatement of the decade, I don’t know what is.

It’s rare that I read a single article that makes me feel so damn vindicated.

The Wall Street Journal wrote yesterday that Rocket Internet-- you know, the conglomerate ruled by the proud copycatters the Samwer brothers-- is struggling to make profits. Shares in the public company are a third of their peak.

Longtime readers -- since my TechCrunch days-- know I’ve been rooting for a Samwer fall for quite a while. They rip off not only ideas, but frequently design work and even code of other startups, even picking similar names to intentionally confuse the market. (Pinterest → “Pinspire”)

When competing against Fab, they went so far as listing Fab designers work on the site that the designers had never agreed to sell on Bamarang.  

And it’s not just the big guys in the Valley they pick on. I’ve spoken to dozens of entrepreneurs in emerging markets, where the Samwers have come in and copycatted a local startup that was gaining steam, flooding their own entry with more capital that a local entrepreneur in pockets of Africa or South East Asia could hope to raise, picking off their staff and running the local company into the ground.

Here’s the Journal’s own description of how they “start companies”:

On the top floor of its seven-story headquarters, employees monitor tech startups world-wide for businesses to copy. When an idea is approved, Rocket assigns marketers, engineers and managers.

As the business develops, it moves down floor-by-floor, eventually making it to the ground level, where managers start to look for offices outside the building.

Every entrepreneur who actually toils to build something out of blood, sweat, tears and love should resent the Samwers just as much as I do.

This is why you wait and watch in this business. It seems like someone is winning who shouldn’t, it frequently corrects eventually.

Not only this, though. The Journal article highlighted HelloFresh, in particular, as a money losing Rocket investment. HelloFresh, the most over-funded of the “non-demand” meal kit companies that we’ve long argued can’t possibly have a large enough market to go public and be valued at billions of dollars.

Guess what?

HelloFresh’s IPO was scuttled and from the Journal:

Two former HelloFresh executives said the company didn’t attract as many subscribers as expected when it launched five years ago. They said one impediment was that the service appealed to a niche audience: affluent 20- or 30-something couples who consistently prepared dinner at home. 

There’s one part of the piece that I didn’t agree with:

“The company is in many respects a microcosm of today’s global web startup scene”

Whoa, whoa, whoa, whoa.

Down as even I am on a lot of the Valley’s current bro culture, we’re not that bad yet. Most founders start their own idea, not assign a team of marketers and throw a wad of cash at someone else’s idea.

Morally bankrupt as it may be, even Uber is authentic and an expression of its founder.