Businesses And Imitators: Too Easy To Copy?

Remember when Groupon was going to be the next big thing?  Now of course everyone seems to be copying their model as we saw last week (http://www.fool.co.uk/news/investing/2011/08/04/will-amazon-google-and-aol-kill-groupon.aspx).

Of course I didn't expect GroupOn to survive anyway – their model seemed to be the kind that'd dilute too easy, and that would have diminishing returns (as near every ad-related internet idea has).  It seems now that before they get a chance to die off naturally, everyone else is going to squeeze them out.

It's not as if GroupOn exactly has a complex idea – it's an advanced coupon system.  There are a lot of companies in similar fields, they just did it big and made it work.

This has me thinking about imitating businesses.

If you can have imitators or many people in a similar field, and your model is simple enough to imitate, someone with money and time can easily horn in on your territory, like . . . well Google, Amazon, and so on.  This seems to be what's happening to GroupOn (at least after their failed sale).

This made me speculate on something – are we at a time where it's easier than ever to ape, imitate, or replace an existing business?

  • There are big companies that can quickly ape some business models.
  • There's so much technology, so many automated setups, so many services, you can set up a business very quickly.
  • We have investors looking for a sure thing.
  • It's a global market, so people can access talent all over – and at any time.
  • There's little piracy for new businesses – "stealth mode" may sound nice, but people also want to use social media and go viral, which means exposure . . .
  • Come to think of it, we also have a lot of people wanting to work . . .

These situations don't mean that your dream business or someone else's won't survive and dominate.  It just means it's a lot easier for people to horn in on you territory – or just destroy you.

If this is true – and I think it is something to consider – it means a few things for your future:

  • If your business model (or that of your employer) can be imitated, you'd better move fast and have an edge over competitors.
  • If your business model involves something unique that's truly hard to duplicate, you may have an edge.  In fact, if businesses and people are being more cautious about risky ventures, a risky venture by you may ironically be safer as you remove the danger of imitation.
  • I'm wondering if this means people will avoid certain businesses and ideas because they may be imitated.  This could, oddly, leave a lot of space for businesses that do "the obvious and easily imitated" because people abandoned the obvious because it was easily imitated – and no one filled the gap.

So what do you think?  Are we in a time where imitation is easy – so easy in fact it may discourage businesses from even coming together?

– Steven Savage