How do you know you’re doing something right? People are starting to copy you. As a matter of fact, nothing breeds copycats quite like a successful business venture. Innovation requires taking risks and diving in often without knowing how your target market may react while imitation can bring in great results by simply following an already successful recipe. Starting a copycat business is less risky, yet still potentially profitable.
The practice of imitation is in no way new. Case in point: the U.S. built its economy by copying and innovating on technologies developed in Europe during the industrial revolution. In the business world though, where there’s a huge pressure to innovate, be original, and foster progress, imitation gets a bad reputation. That’s why it’s often disguised under other names, like franchising, benchmarking, or technology licensing.
Generally speaking, there are two types of copycat businesses out there. One good, the other not so much. Here’s a rundown:
- In the first scenario, copying can be good for business in two circumstances: if the entrepreneur figures out what their competitors did to increase their exposure and use the same means to grow their audience; or if they take something that already exists and make it better/expose it to a new market. Think EasyTaxi, which is basically Uber for Nigerians, or Linio – otherwise known as Amazon for Mexicans.
- In the second scenario, an entrepreneur basically copies everything from an already established business, changes the name and launches the enterprise hoping to score at least a small percentage of the market. Take Groupon, the famous daily deal site everyone surely knows about – the market is now saturated by the site’s copycats. At one point, there was even a copycat named Nopuorg, which is Groupon spelled backward.
What to do to protect yourself
We live in times of technological innovation and rapid-fire manufacturing. Consequently, it’s easier than ever for a rival to rip off an idea. To stay ahead of the competition, follow these steps:
- Secure a patent. If you have a great idea for a business, you must protect it. Be prepared to monitor for patent infringements, send out cease-and-desist letters, or bring lawsuits against copycats.
- Continue to innovate. Even if a competitor manages to legitimately tweak your product idea and sell their version, you will always be one step ahead of them.
- Become more prolific. Invest in marketing and increase brand awareness. Don’t keep all your great work private. Underdogs can’t win when they are merely copycats.
Should I start a copycat business?
Imitation may be the sincerest form of flattery, but it’s rarely the best path to becoming a leader in your industry. Also, this tactic isn’t without risk. Well-established businesses are often commanding a big chunk of the market already, which makes it difficult for copycats to break through.
However, keep in mind that even big companies copy. Google Cloud, Apple iCloud, and Dropbox are imitating one another while the smartphone industry is over-saturated with copycats. As an entrepreneur, you need to decide whether you want to innovate or take after a business model that can be copied lawfully.