Innovation Is Not the only Way to Success

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Marc, Alexander, and Oliver Samwer have built their fortune on the backs of other companies’ R&D departments. These three brothers have a keen eye for innovative ideas and are better at execution then the companies purely looking to be the most innovative. The Samwer brothers have built a company worth 8.2 billion dollars by taking others great ideas and legally coping them, sometimes only changing the colors and text. The Samwer brothers are limiting their exposure by using already proven business avenues that can almost assure profitability. “They have copied top web companies from Pinterest to Groupon and eBay to Airbnb, and have invested in Facebook, LinkedIn and Zynga. Rocket Internet, their incubator, is a dominant force in Europe” (Ekekwe, 2012) The modern investor is always seeking a hedged position to limit risk and copycat companies offer the holy grail of hedging, a proven track record. Some frown on the tactics that Rocket Internet has employed to reach its great fortune, yet these same tactics are used in the backrooms of every large company. Countless patent infringement suits tell the true store of the world’s largest companies, the things Microsoft, Apple and Google do in the dark Rocket Internet does in the light.

For example, in 1916 Lego Group built toys from wood, toys such as wooden ducks and cars. After World War 2 everything changed and plastic was the new thing. A salesman came to Lego and showed them a new plastic mold that created interlocking plastic blocks that could be built into almost anything imaginable. Lego began producing and selling its classic Lego blocks to the public and it was a huge success. Great for Lego, bad for Kiddiecraft the original inventor of the plastic blocks and the molds. Kiddiecraft was owned by Hilary Fisher Page a British inventor that had legally patented the plastic blocks. Lego never contacted Kiddiecraft and Page died without ever knowing his ideas were copied and profited from by another company. Lego purchased Kiddiecraft before a lawsuit could be filed more than likely to keep the infringement hushed. Lego went on to become a toy company giant off a copied design. (Faraci, 2014) Again, execution and timing proved to be the better strategy then simply innovating. Kiddiecraft was the first to ever create a plastic interlocking block, a true innovator. However, the real winner was the company that copied the great idea and added great execution. Lego to this day fiercely defends its patented plastic block that it stole from Kiddiecraft perpetrating the idea that it was the originator, suing any companies borrowing its stolen ideas. Innovation more than 100 years ago didn’t guarantee success but borrowing a great idea, just like today, did.

In closing, I believe it is safe to say that “Innovate or die!” is a flawed statement that many have, as Oliver Samwer puts it, “Romanticized the idea of innovation”. The facts point to the opposite in fact, innovation is almost certainly the way to ruin. 90% of all startup fails or so the myth states, and most startups promote themselves as innovative. Clayton Christensen started the belief that for a company to prosper it must innovate. The idea grasp the public tightly with companies like Apple and Microsoft starting to build their fortune. The successes that these companies achieved ingrained innovation as the key to success, when more than likely it was their ability to take an idea and execute it more effectively than the competition. Companies have devoured large R&D budgets in the name of innovation when that money might have been better used creating more effective execution. Uber for instance didn’t create the idea of the taxi driver, they took an established industry and made it more efficient. Many companies abandon rationale when it pertains to innovation and forgo the idea that profits are the ultimate goal and focus on innovation. These twisted ideas lead down a path of destruction. Many companies in the past have seen success by merely imitating instead of innovating, a much safer alternative to a massive R&D budget. As Mark Twain famously stated “There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations. We keep on turning and making new combinations indefinitely; but they are the same old pieces of colored glass that have been in use through all the ages.”

Bibliography

Clayton Christensen . (2016). Bio. Retrieved from ClaytonChristensen.com: http://www.claytonchristensen.com/biography/

Drucker, P. F. (2002, August). The Discipline of Innovation . Retrieved from Harvard Business Review : https://hbr.org/2002/08/the-discipline-of-innovation

Ekekwe, N. (2012, May 24). When You Can’t Innovate, Copy. Retrieved from HBR.org: https://hbr.org/2012/05/when-you-cant-innovate-copy

Faraci, D. (2014, Feb 06). Kiddiecraft, The Company Lego Ripped Off To Make Plastic Bricks . Retrieved from Birth. Movies. Death.: http://birthmoviesdeath.com/2014/02/06/kiddicraft-the-company-lego-ripped-off-to-make-plastic-bricks

Quinn, M. (1995, April 26). THe Rise and Fall of GO Corp./Founder tells his side in new book. Retrieved from Sfgate.com: http://www.sfgate.com/business/article/The-Rise-and-Fall-of-GO-Corp-Founder-tells-his-3035007.php