How Investors, Marketers, Founders Build Unicorn Copycats or “Me too”Startups 101

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Look, any investor or founder raising funds, allocating funds, or just looking to raise funds should read this. When we begin to raise $10 – 40 Million in the face of uncertainty…we may run an investment thesis based on “me too startups” also known as “clone startups”. Guys and Women, when we say “me too startups”, we don’t mean companies associated with harassment or toxic cultures.

When it comes to “cloned businesses”, we believe we see huge opportunity around the world and also because we were curious to see if it was a good approach to investing in startup copies. We dive a little deeper and provided some tips below.

As always, we welcome credible investors, venture capitalist, angels, and founders’ thoughts or conversation. Please feel free to message myself and if you need business services like complimenting your VC pipeline or SMB marketing…..reach out to myself or bjmannyst.com via mbhvim.com.

Just cause the “R” word is being thrown around now on the news doesn’t mean there are no opportunities, great business ideas, awesome founders, great talents, money … there will always be resources. So don’t fear the “R”.

Let’s Begin…..

Since the beginning of time there has always been imitators, copycats, R&D (Rip &Duplicate). There are people whose personal relations to the problem they hope to solve is non-existent… other then recognizing a money making scheme.

The logo of the Russian McDonald’s successor in Moscow.

A perfect example is the new restaurant on formerly McDonalds site in Moscow. The US fast food company pulls out and was quickly replace with a new chain. Under the name “Vkusno i Tochka”, which translates as “Tasty and that’s it”. The logo, the pop, the apps, colors, even Big Mac can not be used.

Vkusno &tochka plans to reopen 200 restaurants in Russia by the end of June and all 850 of the former McDonald’s sites by the end of the summer.

As an investor does this sound like a good investment when you disregard the sanctions?

Sometimes it’s just companies starting at the same time. Copycatting is normal. We assume Investors don’t care just looking for proof of viable businesses. Copycat of Taskrabbit, Robinhood, Google, Self-Driving Car, EV, Facebook, Messaging App, Uber, Bitcoin, Tesla, etc is great cause someone else has built or shown you the path. Someone has shown you what to do and what to avoid.

Some times the number two can help create more number twos around the world instead of expanding itself.

So with investors flush with money this might be a great way to invest. Our funds could explore up to $40 Million USD and allocate it to great “duplicates”. Anyway here are quick tips for founders, investors to consider.

Here are some tips when investing in clone businesses:

  • It is important to know when the legal business rights have been attacked and when something is just accidental coincidence.
  • Has the company built a copy of something too easy to copy, or enter?
  • Is the differentiation significant or not?
  • Has the company built a strong loyal following?
  • Have they built strong relationships with vendors, partners, community, suppliers?
  • Do they keep innovating or keep imitating?

  • Do they know how to achieve economics of scale?
  • Can the the copycat company stand on its on vision & mission?
  • How well can the team execute?
  • Is the customer service good?
  • Has the first mover proven the need, pricing, market?
  • Can they match the first movers services?

  • Have they offloaded key parts of their business to third parties and who are they?
  • How much variation can this market handle?
  • Are they really committed to the problem or will they quit in the first sign of trouble?
  • What economical factors can impact the first movers?
  • How much have they raised?
  • Who have they attracted, hired, or persuaded to join them?

  • What is their resiliency level?
  • Any regulation challenges?
  • What are the founders experience and education?
  • Do they have the infrastructure and systems in place?
  • Which company has momentum?
  • What are their brand-building effort?

  • Look to get in at an early stage
  • Innovating on existing industries?
  • Will it be a pain killer or a vitamin ?
  • Do they know or use technology to make decision?
  • Will it require getting customers to change behavior?
  • The probability of success goes up if….?

  • The first entry company may have ways to mislead potential copycats or may have made a private mistake?
  • Can the copycat do its own analysis?
  • Has the copycat startup tested their version?
  • Is it a well executed, lawful imitations that don’t infringe on copyrights and other intellectual property?
  • Have they done the calculation for the costs to build the product?
  • Is the business model similar?

  • Well thought out sales channels?
  • Have the founders invested their own resources?
  • Have they pitched to investors?
  • Are they prepared for due diligence?
  • What’s the exit strategy?
  • Have they developed advertising and marketing strategies?
  • Automated marketing and sales processes?
  • Are they better than the front runner?
  • Do they have a growth plan?

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