Why there’s always room for tech start-ups that build on someone else’s idea

Silicon Valley is always looking for the next new thing, but unoriginal successes such as Gmail and Google Maps prove that refining is the equal of innovating

PUBLISHED : Sunday, 11 September, 2016, 6:06pm
UPDATED : Sunday, 11 September, 2016, 6:05pm

Silicon Valley is a place that prides itself on innovation.

Yet, somehow in the pursuit of shiny new tech, it has decided that being “innovative” is the same thing as being “totally original”.

Copying another start-up’s idea is seen as an inferior, unoriginal get-rich-quick play. Acknowledging that you used a competitor’s idea is unheard of.

Take for example the reaction when Instagram’s chief executive Kevin Systrom deigned to admit that he’d taken an idea from Snapchat and put a different spin on it. Website TechCrunch wrote an entire story around the moment, declaring him the “one honest person in tech”.

Yet I recently spent two afternoons listening to 92 start-up pitches from the graduating class of Y Combinator, Silicon Valley’s premier start-up school that churns out a class of companies twice a year. 

Each start-up only has a few minutes to run through the highlights of why theirs is a billion-dollar idea and laced throughout these presentations is a common phrasing, “we’re the X for Y”.

For instance: Squire is the OpenTable for barbershops, or JustRide is the GetAround for India, or Flutterwave is the Stripe for Africa.

At first, it’s easy to dismiss these as a herd of copycats, doomed to fail because they are not the Uber or the OpenTable or the Stripe. I know it’s easy to dismiss. I’m often one to roll my eyes whenever I hear any start-up describe itself as the “Uber for X”. I'm not alone. I’ve heard countless investors complain about the lack of original thought or new ideas among entrepreneurs.

However, listening to the 92 pitches I realised that just because Valley insiders conflate “innovation” with “totally original”, such thinking only benefits Silicon Valley – and that’s starting to change.

Of the start-ups that presented at Demo Day, 31 were founded outside the US in 16 different countries, a new record for a Y Combinator batch.  

Take Innov8, a co-working start-up based in India. 

During its presentation, it went through the business opportunities in India for co-working, and then finally got to what sets it apart: design. It would’ve been easy enough to swap the name “WeWork” in for Innov8 throughout the presentation – and one investor I spoke to chided the company for not innovating more. 

While it’s simple to dismiss the idea as belonging to another company, it’s harder to appreciate why it might work in a different country or different sector as a new successful business. 

Innov8, for example, already has its co-working spaces up and running – and now Y Combinator is partnering with them on conferences to attract more Indian entrepreneurs. 

Squire, the OpenTable for barbershops, may sound like another reservation system on the surface, but it’s actually replacing barbershops’ dependency on Square and other payment processors, making it a one-stop shop.

Comparing your idea to a well-known one doesn’t cheapen the idea; it can actually enrich it. As US publication The Atlantic once explained, Disney creators didn’t understand the plot of the Lion King until its writers called it the “Hamlet for lions”. They certainly didn’t start out to make a Shakespearean adaption with zoo animals.

Listening to the pitches, I realised how easy it is to cast off the copycats without taking the time to realise the idea behind each one.

Quero is taking the Expedia model and applying it to Brazilian universities, making it easier for students to find a college they can afford. There’s nothing cheap behind it.

Systrom is adamant that you can’t just recreate another product, but you can apply what’s great about it to your own business and move forward from there.

An “Uber for X” start-up may be a bad copycat attempt, but it could also be a billion-dollar business if the entrepreneur picks the right “X” and can build a company out of it.

Gmail was not the first email client. Google Maps was certainly not the first map. The iPhone was definitely not the first phone,” says Systrom.

“The question is what do you do with that format? What do you do with that idea? Do you build on it? Do you add new things? Are you trying to bring it in a new direction?”