In today’s high-tech industry, IT businesses are increasingly being faced with clone armies who ramp up their good ideas and then sell the company for a sizeable profit. IT cloning is defined as the process of duplicating any idea or business model that successful runs in the tech industry. As so-called Web copycats, clones find popular web platforms, analyze them, find another ripe market, and startup a new duplicated business.
There is perhaps no one better at IT cloning than the trio of German brothers, Marc, Alexander, and Oliver Samwer, who have made their billions of riches by capitalizing on others’ ideas. Read on to learn more about the Internet heavyweights of IT cloning and find out how the Samwer brothers have earned billions in this controversial business technique.
Beginning of the Samwers’ Startup Success
After earning their graduate business degrees from Harvard University, University of Cologne, and the WHU Otto Beisheim School of Management, the highly educated and tech-savvy Samwer brothers began cloning credible Web startups to start raking in their millions within European markets. Often referred to as the “house flippers of the Internet,” the trio first found success by investing in the startup business of StudiVZ as the German version of Facebook.
In 1999, Marc, Alexander, and Oliver Samwer joined forces to start the online auction house Alando as an IT clone of the mega powerhouse eBay. Within just 100 days, the brothers were able to build the web platform enough to sell the website for $50 million to eBay Inc. After a few years, the brothers created Jamba as a mobile content firm built upon the IT cloning U.S. business model and sold it to Verisign in 2004 for $273 million in profit.
At this point, the sale was verifiable proof that the Samwer’s pragmatic method of building on the inspiration and innovations of others was now becoming a significant IT business model. After building high-growth companies that were sold back to the people who originated the idea, the publicity-shy brothers quickly became known outside of Berlin for being among Europe’s most consistently successful digital entrepreneurs. In an industry that celebrates innovation, the Samwers became rich simply by replicating concepts that were working in the U.S. or Asia into other non-English speaking nations.
Launch of “Rocket Internet” for Cloning IT Businesses
Over the next few years, the brothers continue to invest in German versions of IT businesses based on U.S. models, including Frazr (Twitter) and MyVideo (YouTube). Although not all of the startups were successful, there were enough that built the brothers’ wealth to suggest that the Samwers could build their business model one step further. As a result, “Rocket Internet” was launched in 2007 as a venture capital firm, also commonly referred to as the “Clone Factory” or the “United Nations of Entrepreneurs.”
With the mantra of scale fast, Rocket Internet was founded to bring people together to build technology companies from the ground up and grow faster than competitors by starting right away on duplicated ideas. Within the company’s first four years of operation, Rocket Internet was extraordinary in launching around 30 tech startups, only five of which failed. Until this day, the brothers have also invested in more than 100 different clone startups and others ideas in over 50 countries around the globe.
In 2008, Rocket Launch cloned the idea of Zappos as an online e-commerce portal to create Zalando, which offers a large selection of shoes and fashion for 1,000 different brands. With an estimated worth of $1 billion in 2012, Zalando is now dominating the online shoe business in more than six major European nations. Furthermore, the brothers were strongly impressed by the business model of Groupon in Canada and decided to launch CityDeal in 2010. In the span of just five months, CityDeal rose to the be the top deal-of-the-day website in the United Kingdom, France, Spain, Italy, Ireland, the Netherlands, Switzerland, Austria, Poland, Finland, Denmark, Sweden, and Turkey.
Once the brothers sold CityDeal back to Groupon at $126 million, Rocket Launch made the move to bring the popular online dating site eHarmony to the European market by launching eDarling in 2010. On the other hand, the brothers sold the dating site back to eHarmony at 30% stake. Until this day, Rocket Launch has successfully built a copy machine for creating Bamarang (Fab), Easy Taxi (Uber), Linio (Amazon), Payleven (Square), Paymill (Stripe), Airbnd (Wimdu), Pinspire (Pinterest), and other high-profile web-based businesses.
Hitting Billionaire Status with PLDT Investment
Fast tracking to current time, Rocket Internet has been working toward an initial public offering (IPO) throughout the summer of 2014 to validate the company formed to mimic U.S. technology companies in overseas markets. In spite of talks for IPO plans, the Samwers shocked the IT world in the first week of August by announcing a $445 million investment in the Philippine Long Distance Telephone Company (PLDT) for 10% stake. Therefore, the investment has placed a value on Rocket Launch at $4.45 billion dollars and allows the company to make strategic partnerships in online payment solutions among emerging markets.
According to estimates published by Forbes magazines, each of the brothers are now worth at least $1.2 billion with a combined ownership in Rocket alone at $2.6 billion. However, it is expected that their net worth will continue to rise when the company tests the waters of the public market this fall. With their compelling clone strategy, the brothers are continuing to adapt to growing e-commerce markets by bringing online shopping sites to Latin America, Southeast Asia, the Middle East, and Africa. In fact, the Samwers are currently funding a Zappos-style apparel shopping site called Dafiti in Portuguese for promoting the latest fashions in Brazil.
While the Berlin accelerator has already launched over 75 different companies in Europe and other emerging markets worldwide, IT experts note that the company is poised to open 100 new startups over the next 18 months. Since PLDT has working relationships with MasterCard, Visa, and Citibank, it is likely that Rocket Launch will begin expanding into financial technologies too. Despite the Anti-CopyCat Evolution launched in Berlin, it seems that cloning of IT businesses and the Samwer brothers remain unstoppable for the near future.
Lessons to Be Learned from the Samwer Brothers
So, what can you learn from the billion-dollar successes earned by the Samwers over the course of just one decade? First and foremost, successful investments are the key to becoming rich in today’s high-tech business world. As the IT field continues to grow with new technologies and innovative technological advancements, it is not too late to start benefiting from the new possibilities available in the industry.
Since not all successful businesses run everywhere, you have the opportunity to clone another idea and operate it in another market. The best IT cloning business strategy is to clone an existing idea, add some new features, make it popular in your chosen market, and then sell it back to the one who originated the idea for a million or billion-dollar profit. By learning from the Samwers, you can boost your money-making potential by showing a variation in established technology businesses with your own creativity being added.
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Shane Barker is a digital marketing consultant who specializes in sales funnels, targeted traffic, and website conversions. He has consulted with Fortune 500 companies, influencers with digital products, and a number of A-List celebrities.