Who’d be dumb enough to copy my unproven idea? (Don’t fear the copycat)

Thursday, July 30th, 2009 | Competition | Jung Lee

Sorry to all of the non-readers out there…took a little braincation from qrisper. But now I’m back, still obscure as ever!

I got the chance to sit down with a few investors to discuss the viability of this little site called qrisper.com. While I’m still new to all this, I was confident in my pitch and my value proposition. Not once did I think I would make the newbie mistake of boldly claiming that I have no direct competition. Man, the incredulous looks I got when I did say that…classic!

I weaved myself out of that little situation by explaining that yes, there are tons of Q&A sites out there but none of them aggregates answers…at least not yet. They couldn’t argue with that. But then they hit me with the apparently common investor hullabaloo of, “How will you protect yourself from competitors that have millions in funding that will most definitely copy your idea, which by the way is super duper fantastic?!” (Ed. – quote has been paraphrased and embellished for effect).

I guess that is something to be wary of but nothing that keeps me awake at nights. Because that decision – to copy another company’s idea to make your own – is not an easy one to make. Some things to consider before making such a decision:

Where are you in terms of your own product development?
How flexible are you with your product roadmap?
How easily can you modify your existing infrastructure and user behavior?
Are you willing to completely scrap your existing methodology, if necessary?
Are you willing to take the risk of rebuilding your entire infrastructure, if necessary?
Do you require board approval to completely change course?

My take is that it’s actually hardest for those well-funded startups to scrap their idea to chase another (endowment effect). A small, nimble startup could come out of nowhere and try to run with your idea. But that’s just called competition. Those guys face the same hurdles that you do in building a brand/userbase. And the big guys, they’re too busy actually making money (or trying not to lose money) to worry about things like innovation.

Bottom line – yes there is always a risk of copycats. So what? Just keep an eye on it to make sure it doesn’t fester and act accordingly. Also note that this response won’t help you get funding.

Tags: copycats

jung

@Jason - Now you're heading into the reputation territory, where your network is king. It's not impenetrable (developing your rep/expertise/network) but definitely a major timesuck when you're just starting out and all you want to do is build your product.

I always wonder how some of those zany web startups get millions in funding. I'm sure (hope) that in more situations than not, investors are investing on the person and not the business. But to take such a gamble, one must assume that a previous relationship existed.

As for what makes me defensible, still working on it.

Jason Cohen

You're exactly right not to fear copycats. Several reasons to pile on, some overlapping with yours:

1. Big companies have other problems you don't have. Slow, politics, having to defend existing revenue streams before going after new ones.

2. Big companies have to attack big markets, otherwise there's not enough money to make up for the big costs. Small companies don't run after big niches anyway.

3. If the other company is small, you have first-mover advantage.

4. Just "copying" someone's look or features or even text off the website isn't enough. They don't have your reputation, they don't have your eyeballs, they're not listening to your existing customers, they don't have your link-backs, and if they copy just some of it, everything else will be inconsistent and people recognize it.

5. "Having money" doesn't mean they can write a decent product or run a decent marketing campaign or get people to notice them or get people to like them or execute anything else internal to the business.

MOST IMPORTANTLY: The "what if there's a competitor" question, whether about open source, bootstrapped startup, funded startup, or existing company, IS TRUE OF EVERY SOFTWARE COMPANY THAT EVER EXISTED.

That alone is proof enough that it's an irrelevant question.

A GOOD question is: What makes you special? What about you would be HARD to copy? Stuff like that.

Who’d be dumb enough to copy my unproven idea? (Don’t fear the copycat)

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