In emerging markets there are no copycats, just budding entrepreneurs

INSUBCONTINENT EXCLUSIVE:
Federico AntoniContributor Federico Antoni is managing partner at ALLVP, an early-stage VC based in Mexico
He is a lecturer in management at the Stanford Graduate School of Business
More posts by this contributorEvery year I teach an MBA course at Stanford about the exciting opportunities for tech investors and
entrepreneurs in developing economies
When we designed the syllabus back in 2013, Rocket Internet was still firing on all cylinders on four continents
The unapologetic machine built to copy big American internet companies created billions of dollars for the Samwer brothers and its backers
During Rocket’s golden years, the best startups in the developing economies seemed to inevitably have an original reference in Silicon
Valley.Accordingly, we added a class about the opportunity of replicating business models to seize this information arbitrage
Call it the second-mover advantage.Despite my conviction about the model, the copycat word  —  short for replicating startups and
attached to these ventures  —  annoyed me from the start
More than a term to describe a straightforward recipe to launch, I see it as an unconscious way to belittle an entire group of hard-charging
founders and investors.Indeed, while in foreign eyes, we have been building a Mexican Kickstarter, a Middle Eastern Uber, an Indian Amazon
or a Colombian Postmates, I argue visionary founders are taking a simple idea that already exists and creating new worlds. On the
internet, there are Einsteins and there are Bob the Builders
I’m Bob the Builder. Oliver Samwer, founder of Rocket InternetGateway to entrepreneurshipWhile impact is the final goal, founders
can approach the journey in different ways
The most common approach in the startup world is to use the business method, or more pompously, the design thinking methodology
“Fall in love with the problem, not the solution,” mentors keep telling a succession of startup clusters in acceleration programs
The best and “leanest” way to product market fit is by starting small then keep iterating the solution until you nail it.A second way to
start is favored by engineers and scientists: Take a new promising technology or a forgotten molecule, then find a big problem
Keep iterating until you find a problem worth solving, like a hammer looking for a nail.A third way is starting like painters create,
building skills by copying classics, or like a new chef cooks by starting with iconic recipes: replicate a proven idea and iterate until you
find traction.Until a few years ago it was ostensibly the only way to scale in developing economies
The model helped raise local capital from risk-averse investors who needed reassurance
The playbook to scale was unfolding a couple of years ahead and served as a guide to founders without previous startup experience and no
local role models
The potential acquirer was identified and sometimes contacted in advance
Founders weren’t crazy and investors weren’t dumb. Replicating a business model has served in emerging ecosystems as the gateway to
entrepreneurship and venture investing
Photo courtesy of Flickr/A_MargaRiding the next waveAccording to conventional wisdom, new ecosystems around the world grow through the
following three stages, be them in developing economies or more developed countries
First, local and foreign entrepreneurs replicate successful models focused on local markets
Then as the ecosystem evolves, founders start applying existing technologies to solve local problems
Finally, as the tech space matures, new technologies begin to flourish.In my opinion, those stages never happen sequentially as stated by
ecosystem observers
Successful startups that started with a foreign inspiration can outgrow the master
If they are not bought into submission by the first mover, some of the most famous copycats reinvented the original and made it better:
Mercado Libre is much more relevant in the e-commerce space than eBay
Flipkart is hardly an Amazon, not to mention WeChat
These companies are in turn some of the most prolific tech innovators on the globe
Truly ecosystems evolve organically in unique ways reflecting their history, geopolitical environment, economic structure and cultural
features.Two ways to defend the status quo: “It’s been done before” and “It’s never been done before.” –Thibault @KpaxsIn
defense of talentRecently, it’s hard to hear American observers use the word copycat to describe any American company
After all, Guilt replicated VentesPrivees and Lime, Chinese dockless bike sharing and many more examples
All American startups are treated as innovators while the rest as mere followers.Recently, Chinese or Indian startups seem to be given the
benefit of the doubt regarding their originality
Is it because these regions have become more innovative Maybe
But it’s also because these ecosystems have gained the respect of Silicon Valley
Indeed, Chinese consumer tech surpassed decisively the U.S
as the most important country in terms of investments.So here’s my humble suggestion to our wealthier and more accomplished colleagues:
stop using the c-word with founders
It’s offensive
Most probably, these founders are facing more challenges to build their companies and lower odds for success that the first mover
If anything, they have more merit than the originals.As for founders, when they call you a me-too, remember all teams started somewhere,
somehow
In fact, most started like Bob the Builder before turning into Einsteins
The truth is, it doesn’t matter where you start
You can start by applying a new technology or protocol
You can start with a problem you feel passionate about
You can start by replicating a business model
It doesn’t really matter if you take a big swing at the future and trust you will figure out how to make it happen
It doesn’t matter what label they use while you change the world for the better.