They hurt local innovation and ecosystem development in emerging markets from Asia to LatAm to Africa. They come in, hire away talent only to fire them in a few weeks. they damage the budding trust the consumer has in ecommerce.<p>They are bullies and have a superiority complex boasting about their capacity to execute. They do not have a monopoly on execution. That's a farce.<p>They are greedy, selfish and generally think only of themselves. Not the consumers they serve, the local markets or their employees.<p>I have witnessed them come into markets, destroy the lives and dreams of entrepreneurs and employees in emerging markets and shut down abruptly.<p>Finally, this operation (thier ecommerce operations in particular) is a house of cards. Service quality sucks, customers are lied to and they engage in an epic waste of money<p>It is impossible to build online retail operations in 1-2 years. Yet this is their objective. Build fluff and sell to some unsuspecting corporate development team.<p>The problems groupon is facing is inextricably linked to the involvement of the samwers as far as I'm concerned. Elsewhere, flash sales and couponing operations do well. Anything these guys touch is ultimately unsustainable and fluff. Now they want to try online retail with its logistics, warehousing, etc in emerging markets without a long term horizon. Ha! In a few years time you will realize how stupid the praise in this article is.<p><a href="http://e27.sg/2012/09/10/is-rocket-internet-losing-its-grip-in-southeast-asia/" rel="nofollow">http://e27.sg/2012/09/10/is-rocket-internet-losing-its-grip-...</a><p><a href="http://sgentrepreneurs.com/2012/09/05/is-there-any-method-in-rocket-internets-madness/" rel="nofollow">http://sgentrepreneurs.com/2012/09/05/is-there-any-method-in...</a>
The Samwer brothers fill a (pretty big) hole in the market. They execute proven business models in countries before the market leader can get there. If US-based companies would put more emphasis on international expansion the Samwers' business would melt away. (I'm a American who's lived in the UK for years and gets really irritated that a lot of great US companies don't bring their services here.)<p>side note -- I have to think there's a market for a group of experts based in major European/Asian markets that would specialize companies in clearing the hurdles to expanding internationally. Get a handful of people in the UK, Germany, France, Spain, Italy, Russia who are experts in local regulations and can work fast to expand a US-based business.
As Steve Blank tirelessly repeats, a startup is NOT a business, but a temporary organization searching for a viable business model.[1]<p>The Samwer brothers don't invest in startups! They invest in viable business models. They don't fund search; they fund only execution.<p>--<p>[1] <a href="http://steveblank.com/2012/03/05/search-versus-execute/" rel="nofollow">http://steveblank.com/2012/03/05/search-versus-execute/</a>
My response: <a href="http://swombat.com/2012/9/20/rocket-internet" rel="nofollow">http://swombat.com/2012/9/20/rocket-internet</a><p>The short of it: This is, in my opinion, perhaps the most innovative company in the startup industry today, the first of a new industry. To declare them non-innovative, as some people do, is either short-sightedness or just jealousy.<p>I'm sure a lot of people were jealous of YC too when it first started turning the angel/VC investing world on its head. Same difference.
The Samwer brothers definitely deserve respect in a world where execution is paramount. Often, they execute more efficiently than the companies they copy.<p>If anyone says it's easy to just copy a company, they've never built a company before. There are so many intricacies that go into building a company and culture the right way. When you look at a company, you're only seeing the tip of the iceberg. You can copy the part that you see, but without everything under it, you won't succeed.<p>One thing I would have loved for Rich to speak about a bit more is their treatment of the founders and employees of Rocket companies. I've spoken to employees before who shared stories of very harsh work environments and high turnover rates. Founders get very little equity. Employees get none.<p>From a business perspective, obviously they're doing something right and if people find enough value in being a part of these companies to put up with the downsides, that's their decision.<p>Still would love to see a deeper look into the negatives.
At Airbnb we respected them as a competitor, enough to know that we needed to crush them. Forgive the sports metaphor, but it's like in sports when you have respect for an opponent that you will face, but come game time you're at war.<p>Gotta say though, it was damn fun absolutely decimating them in a global game of 'Risk'.<p>I'll just leave these numbers here....<p>Airbnb vs Wimdu in Berlin - home of Rocket & Airbnb clone Wimdu
- Airbnb - 5830 listings (<a href="https://www.airbnb.com/s/berlin" rel="nofollow">https://www.airbnb.com/s/berlin</a>)
- Wimdu - ~504 listings (<a href="http://bit.ly/P3XcLA" rel="nofollow">http://bit.ly/P3XcLA</a>)<p>Airbnb vs Wimdu in San Francisco - home of Airbnb (and yes, they tried to compete with us here)
- Airbnb - 3904 listings - <a href="https://www.airbnb.com/s/san-francisco" rel="nofollow">https://www.airbnb.com/s/san-francisco</a>)
- Wimdu - 294
They're incredible at what they do and that isn't building innovative, new businesses. They've probably made more successful (in terms of revenue, exit, etc) web businesses than anyone else has. They've scaled up ideas into big companies by bringing on a lot of capital.<p>I don't respect them because they don't use this to build new, long term businesses and tear into others intellectual property but I can acknowledge their success thus far.<p>From what I've heard in the inside it's not the kind of place you'd want to work, people are fired and quit daily and it's cut throat but it seems to be working for them in terms of business.
I am blown away, these guys have hacked innovation.<p>What this says to me is innovation is relative. If you've never seen an iPhone, and someone shows you a Samsung Galaxy, you would think it is mind blowing.<p>As far as the true innovators are concerned, because this is clearly a massive hack and not innovation, maybe this means there is a problem that companies have when trying to take a domestic company/app/service global.<p>Is there someone that could figure out how to deliver a service that simply takes any company's app and makes it globally distributable?... By removing government obstacles and language barriers...
Being able to paint copies of a Picasso does not make you a great artist. Nor does it <i>deserve</i> respect from the artistic community. All it says is that I have enough skill to operate a paint brush when given an exact template.
<i>its as if they want to make it known that they are unashamadly, and without apology, cloning to the pixel, rather than taking the same idea and taking it into a new market. There is an element of cheek and disrespect that detracts from their credibility as entrepreneurs.</i><p>I wonder if this has (accidentally?) become part of their winning formula. Psychologically it seems quite likely that a competitor will give less respect (and therefore thought) to a company that seems cheap and uninspired.
I'm going to go against what most people are saying and disagree that this is a good thing. Too often companies like this are only after the money. For some reason their company STRONGLY reminded me of Zynga, which in my opinion is not a good thing.
There isn't an issue in creating a process to bring business models into new markets that are working. It's innovative in a way and that's cool.<p>But it's not cool how they at least used to operate: contact US startups that had traction, and tell them they wanted to invest and bring them into EU. Ask for info on the business. Then, clone it.<p>As a side note it actually isn't great to have such a short cycle between startup traction and inevitable cloning. It means small startups have to rely on things like (gasp) the patent system to protect themselves from paying upfront to work out a business model only to have someone come in immediately to fragment the market.
The way I see it the major difference between Rocket and startup foundries (Betaworks, Science, Sandbox) is how original the ideas are. And the only difference between foundries and VCs investing in shared assets for their startups (data analysis in Google Ventures, distribution in 500startups) is the belief in founders. If the costs of starting up fall it´s just time before some investors with operational backgrounds consider removing founders as part of the risk. Rocket is a model for a new form of ´startup corporation´, which, beyond clone sites, seems like an original idea.
We often hear that "ideas are worthless, execution is everything", so it comes as no surprise that someone who executes well, should reap the rewards. I've heard many times about how terrible the Samwer brothers are for "ripping off" others innovations, but the truth is they have proven that they can out execute the original innovators.<p>In the case of Groupon, there was very little innovation, so riding the wave over an incumbent seemed on obvious. However many have tried, but few have executed as well as Samwer and in the end Samwer proved the business was too simple to emulate.<p>I don't think in the case of Stripe and Square that emulation will be a viable strategy. Payments by their very nature suggest an extremely high level of trust. Short term emulation would seem to breach that trust. I wouldn't invest the time nor money in a platform which is inherently built to sellout.<p>Pinterest on the other hand...well...good luck!
First thing - this is written by a "media guy" and looks essentially like a practice PR piece - <a href="http://paulgraham.com/submarine.html" rel="nofollow">http://paulgraham.com/submarine.html</a>.<p>Second - whatever the source of the article it still has a point.<p>The Samwers do execute reasonably competently and they do help bring new things to market. The thing that most people don't like is that they succeed and put bed to the lie that original ideas drive markets - when timing, location and execution matter more. See Apple's success in bringing copied tech to mass market consumption - one of the biggest companies in the world is a copycat and that is perfectly fine for Apple buying consumers.
I wonder if this is actually a knock against the common incubator/VC idea that "founders/team are everything".<p>Clearly that's not how the Samwer brothers operate, where a viable business model that "clicks" for whatever reason is all that matters.<p>They simply hire qualified people to execute an existing idea, and then pump massive marketing dollars to establish the company. There's ZERO evidence that they go into a market <i>because</i> they have "a great team", which AFAICT, is all something like Y Combinator really cares about.<p>It's interesting nonetheless -- perhaps there's multiple ways to start and scale new companies?
The Samwers are exploiting the incredibly inadequate web of trust we have on the internet. It's incredible to me that we're willing to spend money with completely virtual entities and expect things to work out. Is our trust in regulation and the rule of law that solid? Especially in emerging markets?
Business 101 teaches you that if barriers to entry are low there will be many competitors. Why is this so surprising for people? It is good for the consumer. It always has been.<p>In the SWOT section of your business plan, under W, if you didn't have Samwer brothers you need to rethink it a bit.
I trialled for their Aus arm and promptly walked out after finally getting an answer to how much they (don't) pay. I took a job a week later for double what they offered which is still an average wage. I have no respect for these guys.