🥷🏼 R&D: Ripoff & Duplicate

These brothers made billions stealing business ideas from businesses.

In 1998, the Samwer Brothers - Alexander, Oliver, and Marc - saw the rise of a new website called eBay. Yeah, that website. They thought, "Hey, if eBay is working in the US, why couldn't it work in their home country, Germany?" So they went to eBay and said, "Hey, bring the website to Germany and hire us to run it." The pitch, while compelling, fell on deaf ears as the eBay executives turned the brothers down. The brothers decided to be like "cover bands" of the internet world. They created and launched Alando, essentially a clone of eBay for Germany. Their website was an instant success, and just 100 days after their launch, eBay acquired them for $43M.

The brothers had now been given a golden nugget and a framework to launch Rocket Internet. They called it a venture studio, but really, it was just using the same playbook of ripping off and duplicating US companies.

The blueprint was simple: Duplicate successful US businesses, launch them in foreign countries, and then sell them to the parent company for hundreds of millions.

Over the next few years, they targeted major companies like Airbnb, Amazon, Facebook, and Uber. Each time, they sold the clone to the original company.

The only thing they did differently from Facebook was change the color from blue to red.

Today, Forbes projects that each brother is worth over $1.2 billion!

Pretty awesome for some rip-off artists, right? Well, I wanted to break down a few quick lessons on how you might be able to do something similar in your world.

My takeaways:

1. Speed: Decisiveness over perfection. Too many people debate if option A will work or option B while someone else thinks option C is the safest. The Samwer brothers didn't mess around; they just straight up copied what worked in a new market and executed it immediately. When something works, sometimes all you need to do is take action.

2. Focus: The art of saying no and the bridge-crossing mentality. I have written about this in previous articles as a future Homer problem (Stop doing the wrong things). But to put it more plainly, sometimes you don't have to address all the problems that your business or situation has at the current moment. The sage advice of “We'll cross that bridge when we get there”. You don't need to solve all problems at once, just the most important ones that make the biggest impact on your business.

3. Borderless Dreams: Dream bigger, wider, and without borders. Why reign over a sandbox when you can conquer the whole playground? I see way too many people afraid to invest outside of their own backyard. The fact that something works in one area might not necessarily work in another, but if you understand the fundamental reason why it works, it's often easier to replicate what's working elsewhere. You didn't invent Facebook - bummer! Well, neither did the Samwers, but they sold their version of Facebook back to the original creators.

4. Budget Mistakes on Purpose: Fail fast with intention. The Samwers often spent money across various media platforms to test what worked and what didn't. They used A/B and C/D/E testing. They quickly determined which message and platform worked best. Then, when they spent substantial money, they knew which one was effective. The same goes for business: don't be afraid of losing money. Do it with a plan and to gather data.

5. The Art of the Deal: Establishing trust. Presenting your investments/deals effectively. Realize that you, as the CEO or investor, will be the most compelling salesperson for your vision. Also, understand that how you present yourself to others matters. The Samwers copied the original company and then sold their version back to them. Could you borrow Blackstone's investment strategy and sell it to them? Absolutely! We've done it several times, and so can you.

In conclusion

I've often found myself wanting to be the most original and unique. Sometimes you aren't going to be the next Zuckerberg. Sometimes, it might be better to be the next Samwers and replicate what already works.

What do you think of the Samwer Brothers business tactics? Ethical, Moral?

Until next week, and if you ever wanted to know how to borrow some of the best investment strategies and practices, click on the links down below

Jake