8 ms·

By which time an American company will have copied your business model and plow 10x anything you could ever dream of raising in Europe into dominating your mark

By which time an American company will have copied your business model and plow 10x anything you could ever dream of raising in Europe into dominating your market.

igammarays 5y ago
More VC money is NOT always better. Instagram, WhatsApp, and other unicorns were built with extremely small teams. Latest case in point: Mailchimp, built with 0 VC funding.
- goohle 5y ago
  Yep, lot of investor money can contribute to bankruptcy: WeWork, Katerra, etc.: https://www.bloomberg.com/opinion/articles/2021-06-08/katerra-bankruptcy-how-softbank-s-american-house-of-cards-collapsed https://www.bloomberg.com/opinion/articles/2021-06-08/katerr...
- pedalpete 5y ago
  Instagram had raised over $57M in VC funding before being acquired. https://en.wikipedia.org/wiki/Timeline_of_Instagram#:~:text=Instagram%20has%20raised%20US%247,Instagram%20at%20around%20%2425%20million.&text=Instagram%20hits%205%20million%20monthly%20active%20users https://en.wikipedia.org/wiki/Timeline_of_Instagram#:~:text=....
deleted 5y ago
[deleted]
long_time_gone 5y ago
Are there examples of this phenomenon? If so, please share.
- andy_ppp 5y ago
  Yes, I’d like to see some examples of this, I’ve never heard of the fast follow working but happy to be corrected. The thing is they will not have access to your metrics to know the rate of growth and as we all know most amazing startups look like bad ideas on the surface. Take for example something like Substack - it should be easy to copy but they already have a moat in terms of mindshare with writers so I’d say there isn’t much point. Basically by the time you’re thinking about copying something that has product market fit it’s already too late for you to be the incumbent.
  - guiriduro 5y ago
    Yes, that's why Google doesn't exist and Altavista rules world search.
    - andy_ppp 5y ago
      It's actually much more complex than a post on hacker news could summarise here, but I will say AltaVista tried to compete with Yahoo and add features rather than compete with Google. If you think Google was a fast follower you are incorrect. There are patterns to how these types of company crop up and they are about revolutions in how a field is done rather than "copy AltaVista" and see if you can catch them. Nobody succeeds at copying a company that has a genuine mission to accomplish. I'm not saying it's impossible to build a company that happens to do the same thing as say Substack but you have to build it for the correct reasons and fast followers are generally always compromised in some way. Your glib suggestion that Google, a once per decade company, is a follower of AltaVista really doesn't do any of what Google accomplished justice.
  - GlennS 5y ago
    The idea that Substack have a moat seems a bit implausible, given how new they are. Have they finished displacing Medium yet? Who in turn only appeared a few years ago? Have any normal people even heard of these companies?
    - andy_ppp 5y ago
      Ask any writer you know about substack, they have mind share that the competition will struggle to catch. It's a moving target remember, first you have to launch, then you have to get a load of a-list writers on your platform, then you have to figure what new thing is going to get you users. This will take you at least 6 months maybe longer. By then Substack should be at least 6 months ahead of you maybe more.
    - jacobr1 5y ago
      Substack is winning because of business model innovation, and also because of market timing. Their technology isn't really an advantage compared to legacy CMS platforms - how they are employing that technology is the difference. Medium went for a bottom-up approach, trying to monetize the content of the crowd. Substack is going for a top-down approach, grabbing writers with an existing large following and paying them top rates, which are justified by the conversion rates for their well-known creators. Normal people might not have heard of these companies, but niche audiences certainly follow some of the specific authors/columnists/influencers and are following them onto substack with paid subscriptions. Is that a moat, or will they jump to the next platform? A few have been poached by the NYT and other venues, so maybe the moat isn't that big.
devops000 5y ago
Sometime this happened. I would prefer to own 100% of a smaller but profitable company instead of 5% of a high-growth/negative profits and starving for the next funding to survive.
- VBprogrammer 5y ago
  Surely the aim of the game is not to be left holding the bag when the music stops. In that situation you would need to be making sure your own financial position no longer depended upon that of the continued success of the company. Not saying that is a good way to run a business or the one I would personally prefer.
- adventured 5y ago
  There are many scenarios. There is also: 5% of a high growth, negative profit, thriving company that can rather trivially raise additional capital to keep pushing growth faster. Hundreds of start-up companies have fit that model over the last 10-20 years. See: Facebook, Airbnb, Zoom, Twilio, Square, Stripe, DigitalOcean, Cloudflare, Fastly, DocuSign, Teladoc, Datadog, Coinbase, Etsy, Lyft, Uber, DoorDash, Pinterest, Twitter, Snapchat, Okta, Zscaler, Hubspot, CrowdStrike, Palo Alto Networks, Splunk, Workday, ServiceNow, The Trade Desk, Snowflake, Roku, Unity Software, MongoDB, Robinhood, Palantir, Roblox, Veeva Systems, Wayfair, Peloton, UiPath (Romania originally), Anaplan, Qualtrics, Asana, RingCentral, Zendesk, Dropbox, Appian, Bumble, Smartsheet, Stitch Fix, C3 AI, Affirm, JFrog, Box, BigCommerce, Sumo Logic, FireEye, Qualys. Along with dozens of other prominent and smaller companies. And although not US companies, Shopify, Atlassian, Elastic, Wix, MercadoLibre and Spotify are also in that same bucket (and were funded by US venture capital). China also has a ton of thriving companies funded in a similar model (Alibaba, Pinduoduo, ByteDance, Didi, JD, Tencent, etc). These are significant companies that all followed that model - to one degree or another - and have IPO'd in the past decade (even Tesla's IPO was just 11 years ago, they exist courtesy of the same model). Salesforce lost money for a very long time. They were founded in 1999, and didn't reliably turn an operating profit until just a few years ago. In a few years they'll be larger than SAP.
  - moneywoes 5y ago
streetcat1 5y ago
What, where ? Can you give a concrete example where an American company copied European company? I.e. facebook cannot even copy snapchat and they have INFINTE resources, and 2B users. Also, Markets today are so huge, nobody dominating anything.
melomal 5y ago
This can be true but ultimately if this is a fear, you need VC money.

By which time an American company will have copied your business model and plow 10x anything you could ever dream of raising in Europe into dominating your market.

igammarays 5y ago

More VC money is NOT always better. Instagram, WhatsApp, and other unicorns were built with extremely small teams. Latest case in point: Mailchimp, built with 0 VC funding.

goohle 5y ago
Yep, lot of investor money can contribute to bankruptcy: WeWork, Katerra, etc.: https://www.bloomberg.com/opinion/articles/2021-06-08/katerra-bankruptcy-how-softbank-s-american-house-of-cards-collapsed https://www.bloomberg.com/opinion/articles/2021-06-08/katerr...
pedalpete 5y ago
Instagram had raised over $57M in VC funding before being acquired. https://en.wikipedia.org/wiki/Timeline_of_Instagram#:~:text=Instagram%20has%20raised%20US%247,Instagram%20at%20around%20%2425%20million.&text=Instagram%20hits%205%20million%20monthly%20active%20users https://en.wikipedia.org/wiki/Timeline_of_Instagram#:~:text=....

deleted 5y ago

[deleted]

long_time_gone 5y ago

Are there examples of this phenomenon? If so, please share.

andy_ppp 5y ago
Yes, I’d like to see some examples of this, I’ve never heard of the fast follow working but happy to be corrected. The thing is they will not have access to your metrics to know the rate of growth and as we all know most amazing startups look like bad ideas on the surface. Take for example something like Substack - it should be easy to copy but they already have a moat in terms of mindshare with writers so I’d say there isn’t much point. Basically by the time you’re thinking about copying something that has product market fit it’s already too late for you to be the incumbent.
- guiriduro 5y ago
  Yes, that's why Google doesn't exist and Altavista rules world search.
  - andy_ppp 5y ago
    It's actually much more complex than a post on hacker news could summarise here, but I will say AltaVista tried to compete with Yahoo and add features rather than compete with Google. If you think Google was a fast follower you are incorrect. There are patterns to how these types of company crop up and they are about revolutions in how a field is done rather than "copy AltaVista" and see if you can catch them. Nobody succeeds at copying a company that has a genuine mission to accomplish. I'm not saying it's impossible to build a company that happens to do the same thing as say Substack but you have to build it for the correct reasons and fast followers are generally always compromised in some way. Your glib suggestion that Google, a once per decade company, is a follower of AltaVista really doesn't do any of what Google accomplished justice.
- GlennS 5y ago
  The idea that Substack have a moat seems a bit implausible, given how new they are. Have they finished displacing Medium yet? Who in turn only appeared a few years ago? Have any normal people even heard of these companies?
  - andy_ppp 5y ago
    Ask any writer you know about substack, they have mind share that the competition will struggle to catch. It's a moving target remember, first you have to launch, then you have to get a load of a-list writers on your platform, then you have to figure what new thing is going to get you users. This will take you at least 6 months maybe longer. By then Substack should be at least 6 months ahead of you maybe more.
  - jacobr1 5y ago
    Substack is winning because of business model innovation, and also because of market timing. Their technology isn't really an advantage compared to legacy CMS platforms - how they are employing that technology is the difference. Medium went for a bottom-up approach, trying to monetize the content of the crowd. Substack is going for a top-down approach, grabbing writers with an existing large following and paying them top rates, which are justified by the conversion rates for their well-known creators. Normal people might not have heard of these companies, but niche audiences certainly follow some of the specific authors/columnists/influencers and are following them onto substack with paid subscriptions. Is that a moat, or will they jump to the next platform? A few have been poached by the NYT and other venues, so maybe the moat isn't that big.

devops000 5y ago

Sometime this happened. I would prefer to own 100% of a smaller but profitable company instead of 5% of a high-growth/negative profits and starving for the next funding to survive.

VBprogrammer 5y ago
Surely the aim of the game is not to be left holding the bag when the music stops. In that situation you would need to be making sure your own financial position no longer depended upon that of the continued success of the company. Not saying that is a good way to run a business or the one I would personally prefer.
adventured 5y ago
There are many scenarios. There is also: 5% of a high growth, negative profit, thriving company that can rather trivially raise additional capital to keep pushing growth faster. Hundreds of start-up companies have fit that model over the last 10-20 years. See: Facebook, Airbnb, Zoom, Twilio, Square, Stripe, DigitalOcean, Cloudflare, Fastly, DocuSign, Teladoc, Datadog, Coinbase, Etsy, Lyft, Uber, DoorDash, Pinterest, Twitter, Snapchat, Okta, Zscaler, Hubspot, CrowdStrike, Palo Alto Networks, Splunk, Workday, ServiceNow, The Trade Desk, Snowflake, Roku, Unity Software, MongoDB, Robinhood, Palantir, Roblox, Veeva Systems, Wayfair, Peloton, UiPath (Romania originally), Anaplan, Qualtrics, Asana, RingCentral, Zendesk, Dropbox, Appian, Bumble, Smartsheet, Stitch Fix, C3 AI, Affirm, JFrog, Box, BigCommerce, Sumo Logic, FireEye, Qualys. Along with dozens of other prominent and smaller companies. And although not US companies, Shopify, Atlassian, Elastic, Wix, MercadoLibre and Spotify are also in that same bucket (and were funded by US venture capital). China also has a ton of thriving companies funded in a similar model (Alibaba, Pinduoduo, ByteDance, Didi, JD, Tencent, etc). These are significant companies that all followed that model - to one degree or another - and have IPO'd in the past decade (even Tesla's IPO was just 11 years ago, they exist courtesy of the same model). Salesforce lost money for a very long time. They were founded in 1999, and didn't reliably turn an operating profit until just a few years ago. In a few years they'll be larger than SAP.
- moneywoes 5y ago

streetcat1 5y ago

What, where ? Can you give a concrete example where an American company copied European company? I.e. facebook cannot even copy snapchat and they have INFINTE resources, and 2B users. Also, Markets today are so huge, nobody dominating anything.

melomal 5y ago

This can be true but ultimately if this is a fear, you need VC money.