The Clone Factory.
Rocket Internet’s Business Model.
This is an interesting example of where the company bases its business model upon the ability to be second or third to market. Let’s think about this in more detail, because it makes total sense – the first companies to get to market experience the costs and the huge learning curve that is associated with any start-up which enters a new and emerging market. If there is no advantage to being first it to a market, or if the market is new and expanding and has room for many new competitors, then this is a really good business idea. Some would argue that Rocket Internet is a ‘disruptive’ organisation.
The clone factory is based upon Rocket Internet and their business strategy for dominance in Germany and other parts of the world. So the company does not really have a new and innovative idea; essentially it waits and watches how other innovative online and digital start-ups enter new markets, then it quickly invests time and resources in developing its own version of its competitors’ idea, adapting and improving it.
By having a vast portfolio of these types of start-ups, rocket Internet has developed a strategy whereby it will see many of the start-ups becoming successes, whilst others will diminish fadeout. The business model will hopefully deliver successful companies in the long-term. Here’s another issue, investors in these companies will want to see returns in the medium, if not the short term. However, these tech companies which may not see a return for many years to come. However, these will be the new cash cows for investors as these markets mature and as customers are satisfied.
Its chairman, the charismatic and future thinking German entrepreneur Oliver Samwer, find himself continually reasoning and explaining the need to think about the medium to long-term. These new businesses are cutting-edge and pioneering. In fairness to Samwer, his companies are disruptive and ‘clone’ is a little misleading.
Some examples of rocket internets new clone businesses include Bonativo (Farmer’s market online), Carmudi (to buy and sell vehicles), EatFirst (super-fast takeaway food), EverJobs (for jobseekers) and Easy Taxi (arguably an Uber clone).