On the 15th of January 2008 the domain name Groupon.com went live for the first time. 2008 was also the year that IndieGogo became one of the first ‘crowdfunding’ websites. A year later, the biggest rivals of each would launch in the form of Living Social and Kickstarter.
At the start of 2012 Uber – previously known as Ubercab – started to expand internationally. Just a few months later, Logan Green would launch ride sharing competitor Lyft, which rode on the back of Uber’s success to a $4bn valuation. It’s no coincidence that success stories in new industries often come in pairs. In today’s report I look at how you can capitalise on a trend which could see you at the helm of the webs hottest startups.
At the heart of if this trend is the pivot, a technique ViperChill readers have used to make as much as $100,000 in a single week. Before we continue, I want to peak the interest of 66.1% of ViperChill readers and say this: If you’re reading this and you’re based outside of the US, your potential success with this method just went up tenfold. You don’t have to thank me later; some equity will do just fine.
24 Million Reasons to Pivot from the Best Startup Ideas
In 2010, Singaporean Karl Chong was visiting New York and noticed the rising popularity of group buying websites across the U.S. He saw such potential to bring this concept to his home country that he quit his investment banking job in America and convinced his brother Chris to join him in moving back to Singapore to start a new online venture.
It wasn’t long before the brothers launched their own daily deals site, Beeconomic (Be-Economic). It followed the exact same daily deals model you’re likely well aware of today. In December of 2010 – less than a year after the site launched – it was purchased by Groupon for $24m. The site was then rebranded to Groupon Singapore which Karl and Chris still work on today.
When asked about their success, Karl says, “We gained a first mover advantage being the first to start up in Singapore, allowing us to build relationships with premium businesses. Locals enjoyed our “sweet deals” and our subscriber base grew at hundreds per a day, thanks to our $5 referral program.”
Beeconomic wasn’t the only deals site that Groupon ended up purchasing on their whirlwind buying spree. Other entrepreneurs from around the world thought they could apply the same concept to their own countries as well.
Looking to show impressive growth before their IPO, Groupon picked up a number of other country-specific rivals such as:
- SoSasta, a daily deals site for India
- Citydeal.de, a daily deals site for Germany
- ClanDescuento, a daily deals site for Chile
- Darberry, the leader in daily deals for Russia (which later became Groupon Russia)
- Disdus, an Indonesian daily deals site
- Crowdmass, a group buying site in Australia
- Beeconomic which of course later became Groupon Singapore
6 months after the purchase of Beeconomic, Groupon went on to purchase Melbourne-based group buying site Crowdmass. The acquisition was not primarily based on their user base or revenue, but focused on sourcing more good employees to add to the 100-strong Australia team they already had.
I’ll cover a little later why this kind of purchase not only makes sense for the company doing the acquiring, but makes a lot of sense for you as a potential startup founder as well.
The $3bn Website Clone Factory Which Hires 30,000 People
The original title for this post was ‘How to Pivot Off Multi-Million Dollar Website Ideas’ and was based on weeks of my own research collecting data into the various companies that have successfully pivoted off ideas which had sent investors wild.
I literally changed the title in the last few hours after a restaurant conversation with Diggy where he said, “Today I was reading about this company who just clone other businesses and they’re making a ton of cash doing it.” I replied, “Dude, that’s exactly what my entire next article is about. Send me the link.”
The article he sent me was entitled, “What It’s Like to Work at a Startup Clone Factory“. It covered the story of Rocket Internet, a brand now worth billions of dollars majorly thanks to their shameless cloning of popular U.S startups and bringing them to other countries around the world.
Although I only read the story yesterday – it was released less than 48 hours ago – the name of the company sounded awfully familiar. I don’t know how I remember this, but when I wrote SEO and the Stock Market back in September of 2014, I covered a company called Zalando. I had focused on the German version of their operations but noticed “they’re also running a .co.uk version and even a .pl version of their site.”
Wikipedia best describes Zalando as being ‘inspired by US online retailer Zappos.com’ and as you’ve probably guessed, is a creation of Rocket Internet. They had taken the Zappos concept to Germany, the UK and Poland while building a brand that is now worth more than a billion dollars on its own.
Zappos is not the only website they’ve been inspired by as you can see in the picture below.
Credit: TheHustle.co, though I can’t seem to replicate this image
I’m very open when my post ideas come from other sources but in this case the timing is purely coincidental. It’s really weird to read a detailed report on something just as I was about to talk about it.
It turns out that everything I cover in this post – the concept of pivoting off successful startup ideas – is exactly what Rocket Internet do. They take popular US-based startup ideas, build clones of them for other countries and throw money at them until they succeed.
In the article Diggy was referring to over last night’s Khao Pad Gai, an ex-employee reveals how they fine-tuned their process in deciding which startups to clone, “We tried cloning Airbnb, but it didn’t work because it’s so brand and community focused. Even though we had a staff of 400 in 15 offices within two months, it didn’t work. Eventually we realized the best companies to clone were e-commerce businesses.”
On how intense they were about copying the specifics of big websites, nothing was left to chance, “We’d copy a website exactly. Ollie would even hire a guy with a PhD to study the sites we were cloning. He’d send us a weekly digest on the company we were cloning. We’d get everything in that digest. If Amazon slightly changed their cart image or moved it just two pixels to the left we’d know and copy it. During our weekly calls we’d talk about how to replicate the site exactly.”
If I continue with this section I feel like I would be cloning the original article (terrible joke, I know) so please do go and give it a read if you’re interested in learning more.
Now let’s continue with what I was originally going to share…
You Too Could Have Been Part of Expedia’s $3.9bn Acquisition of HomeAway
It’s not just in the daily deals space where we can reveal savvy entrepreneurs pivoting popular ideas from overseas into success on their own home turf. HomeAway – which was acquired by leading travel-planning company Expedia for almost four billion dollars just a few months ago – grew rapidly because it acquired much smaller, similar operations around the world.
In fact, they acquired so many smaller startups on their rise to industry leader that I’m just going to share their domain names with you. Take a look at this buying spree…
They snapped up some of the biggest brands in Australia, the UK, Canada and Brazil who were all essentially offering the same thing.
Buying outside of their local area is something that’s clearly enticing to big US startups with a lot of money to spend. There are four key reasons why this acquisition strategy works so well for them:
There’s a team on the ground. They don’t have to go and register a new company, find managers and staff and train them on the entire concept of their new business. There’s a team already in place who understand the industry and its potential.
They have established partners. Whether that’s in the form of local shops offering deals or homeowners looking to rent out their homes, it saves time and money if you already have other people working with a company.
There’s an existing user base. Customer acquisition can be expensive. If you already have some users and an established brand in your local country that saves a lot of time.
Growth figures impress investors: Companies flush with cash are expected to start showing signs of growth, especially if they’re going to seek further funding rounds in the future. Acquisitions can be one way to speed up this growth and excite new investors with their potential.
After raising $250m in a single venture round in 2008, HomeAway CEO Brian Sharples told Inc.com, “There are going to be some great opportunities [for acquisitions] the next couple of years.”
He wasn’t kidding.
AirBnb, a HomeAway Rival, Also Grew via Country-Specific Acquisitions
Airbnb, the popular place for homeowners to rent out their homes, didn’t get caught up in as much of a buying frenzy as the last two examples, they certainly used acquisitions to help cement their place as a leader in their field. Some of their purchases include:
- Accoleo, a marketplace for students to rent out their flats in Germany
- Crashpadder, a peer to peer accommodation site that grew to dominance in the UK
- Vamo, an event discover platform that allowed you to book accommodation in multiple cities
Even Amazon, the online shopping powerhouse acquired the UK’s BookDepository.co.uk and Australia’s Abebooks.com to help speed up their international growth.
jCrush, The Jewish Dating App You Only Now Want to Know About
If you think this concept of ‘stealing’ popular ideas is just to create a company that could get acquired then think again. Huge opportunities to create a profitable business – whether you aim to sell it or not – arise any time there’s a new market sector opening up.
In 2012 location-based dating app Tinder was launched to the world and just two years later the company would announce they were now registering one billion ‘swipes’ per day. The success of Tinder, which was later acquired by the owners of Match.com, inspired a number of entrepreneurs to create their own spin-off with interesting angles.
Something you may not know is that the location-based dating app for gay men, Grindr, was launched three years before Tinder.
In the same year as the launch of Tinder, Dattch – now known as HER – was released to target the lesbian and queer (their own description) market. Though it took a while for them to gain traction they secured $1m in funding in 2015 to grow their brand.
They’re certainly not the only company to try and capitalise on the lesbian angle either, Findhrr and Scissr have to be two of the smarter names trying to get a piece of the taco pie.
It’s not only the niche that opportunistic entrepreneurs are targeting either; many have created their own twist from the general model we’re more accustomed to with Tinder. You’ve got:
- LinkedUp, a career-orientated dating app that uses your LinkedIn account instead of Facebook (like Tinder)
- jCrush, a dating app for Jewish people.
- TatChat, a dating app that helps people connect with fellow tattoo enthusiasts
- Collide, a dating app for Christians
- Hinge, where You can only match with friends of your (Facebook) friends
- Bumble, where only girls can send the first message
If anyone creates Marketr I want unlimited Super likes (why didn’t they call it Super swipes?) please.
The key of course is not only to be one of the first to notice a new trend and capitalise on it within a smaller niche, but to get people talking about you as well. I didn’t find the above examples by trawling through the App Store. I found them because they managed to get other websites talking about them.
$500M Says There’s More to Uber’s Competition Than Just Lyft
At the start of December 2015 Uber’s valuation reached a sky-high figure of $62.5 billion. The success of the ride-hailing app has meant that rivals across the globe have also been able to raise hundreds of millions of dollars in an effort to become the ‘Uber’ of their own country.
To name just a few examples, overseas rivals include:
- Ola, the Uber for India
- Yidago Yongche, the Uber for China
- Easy Taxi, the Uber for Brazil
- Go Jek, the Uber of Indonesia
These companies are raising some serious cash. Just three months ago Ola raised $500m to help them dominate the taxi space in India. They actually started before Uber and Lyft but aimed to work with current private companies rather than creating a separate entity with their own drivers.
Easy Taxi was much later to the game – starting in Brazil in 2011 – and has since received more than $77m in backing. They currently have 400,000 taxi drivers connected to their service.
The story behind Go-Jek is perhaps even more interesting. The business had been growing very slowly and was only a part-time distraction for founder Nadiem Makarim.
Then, as late as the middle of 2014, investors started asking him about the opportunity to invest in his business thanks to the popularity of Uber and similar services around the globe. That’s when he started working on Go-Jek full-time and the rest, as they say, is history.
ViperChill Readers Have ALREADY Pivoted to $100,000+ Success. Here are 5 More Opportunities
My blog post back in February of 2014 about the success of Viral Nova was one of the most popular ever on this site. Just one week after that post went live I highlighted the success of a ViperChill reader who had made $100,000 in one week by copying the model and taking advantage of Facebook’s traffic.
Five months later I shared three more success stories from readers who were changing their lives by creating their own version of the popular site with different angles (and focusing on different locations).
It’s not even something that was only successful in 2014. Just a few weeks ago I received an email from someone in Russia who is still having huge success with the model.
I check on his Facebook page now and then and I can tell you it’s as active as ever.
I have built one of the biggest brands in my industry by mimicking a lot of the Viral Nova model so I owe it to Scott de Long for being so open about his success. I’ve never thought about cloning a much bigger idea though, have you? Maybe it’s time we start.
Here are a few startups which could possibly make a great base to build off of for your own successful pivot.
On the back of a recent $50M investment, FiveStars has a concept that isn’t too far removed from Groupon but done in a way that Foursquare really should have taken advantage of. You download their app and it shows you businesses local to you that offer rewards and discounts for eating there.
The only problem? There aren’t many offers outside of the US to benefit from. Like most startups in America, they seem to be focused on the likes of Seattle and San Francisco before focusing on other areas.
Though already an established brand with 10,000 local businesses in the U.S. and Canada, they’ll no doubt be looking to buy up opportunities internationally to fuel their growth. Even if they aren’t, it’s a great concept that could potentially work in your home country if there isn’t a similar rival already.
Less common markets such as Germany, Brazil, Indonesia, New Zealand and Vietnam and a few that spring to mind.
Boxed (and a recent $100m investment)
Just this month Boxed received $100m for their Series C fundraising round which brings their total capital raised to $132.6m. Investors clearly think that this new concept – the idea of being able to buy bulk sized versions of your household favourites – is going to take off in a big way.
Keep in mind that Rocket Internet believe the best startups to clone are those in eCommerce.
Right now the concept is just taking off in the US but again, I can see this working in the UK, Canada, Australia, South Africa, New Zealand or let’s be honest, anywhere in the world really.
The offline version of these concepts in stores like Makro and Costco work incredibly well, so I would almost be surprised if it didn’t work online too.
I mentioned in the introduction that if you’re outside of the US, the opportunities to have success with a spin-off tend to be much greater from what I can tell. The US is the world’s largest economy after all and with over 300 million people, you’re bound to have a lot of competition when it comes to startup ideas.
There’s no reason you can’t apply those ideas to your own country though.
One app that recently caught my eye is called GasBuddy. It allows users of the app to earn rewards by reporting the current price of petrol in their location. Then main use of the app is then to help you find the cheapest petrol near wherever you’re driving.
It’s such a neat little idea and something I could see working well in any country. The idea already has competition in the UK with ‘WhatGas’ and ‘Petrol Prices Pro’ as the leading apps but there didn’t seem to be options for other countries I checked.
OneRent (a smaller investment, but still with huge potential)
Just last week (January 21st 2016) OneRent raised $1m in seed capital to fulfill their aim of becoming a full-service rental management solution for landlords and tenants.
Where’s the opportunity? Well they clearly display on their homepage that they currently only service Seattle and the Bay Area before they focus on expansion.
From what I can tell the core services they offer include:
- Property marketing which essentially puts your listing on 40 other listings sites
- Tenant screening through background and credit checks
- OnDemand showings of rentals, 24 hours per day
- Lease creation
- Rent collection
- Property maintenance
I absolutely love this idea. If I owned a number of properties it sounds like a perfect solution. What a shame it’s only available in the Bay Area. Maybe someone reading this is in another major city like Amsterdam, Cape Town, Miami, London, Madrid, Oslo or anywhere else in the world with high property rental rates.
Let me go a step further and tell you the ten most popular Airbnb cities by number of listings. In other words, if you are based in any of these cities, there’s a huge opportunity for you with a similar model to OneRent.
- Paris (43,800 listings)
- New York (32,200 listings)
- London (24,100 listings)
- Rio de Janeiro (17,800 listings)
- Barcelona (14,900 listings)
- Rome (14,700 listings)
- Berlin (13,300 listings)
- Los Angeles (12,200 listings)
- Copenhagen (11,400 listings)
- Sydney (10,000 listings)
I haven’t researched other startups in this field enough to tell you this is a no-brainer, but the idea of someone taking care of rental showings 24 hours per day seems ingenious to me.
Not all of my ideas are going to just be based off spinning the location of an app or service. You can also take an entire concept and simply apply it to a different industry as well. You make up one third of my audience, America, so I made sure not to forget you here.
Hopper has raised over $21m to create an app that uses big data to predict and analyze when the best times are to book flights. The app can tell you whether it’s best to book your trip to Las Vegas now or wait three days, and even suggest that you should make sure you book the flight before a specific date.
While it obviously requires work and smarts to put this together, Hopper is consistently in the top 1000 apps on the entire app store in the United States, even though it launched a few years ago.
I could totally see spin-off versions of this working well.
What about a version that analyses hotel prices by monitoring the likes of Agoda to let you know when the best deals on rooms will be available.
Or how about a version for car rentals that looks at the prices of the likes of Hertz to help you get the best deal.
Think of anything that people like to shop around for and start exploring whether there’s a market for that.
6 Sources to Help You Find the Next Billion-Dollar Pivot
If pivoting off of the next billion dollar idea sounds like something you would like to try for yourself, here are some great sources of inspiration to make sure you’re first off the mark.
First for a reason, Crunchbase is my absolute favourite resource when it comes to finding great niche ideas to capitalise on. It’s literally a dream come true for anyone looking to discover the hottest upcoming trends in any industry.
The reason Crunchbase is such a good tool is simple: It monitors startups that have received investments.
If a startup has received an investment it generally means they’ve came up with a new idea that is going to grow, and they’ve been able to convince someone else that the idea is solid enough for them to hand over their hard-earned wealth.
Just look at some of the investments from just this week that could give insights into future industries about to take off:
- PokitDok received $35.08M to make healthcare transactions more efficient
- Innovid received $15M to help advertisers create and measure video experiences on any device
- Shuttl raised 20M to help transport the people of India in air-conditioned minibuses which are odered via phone apps
- PepperTap received $51.2M for their India-based, grocery delivery service
There were many more investments around the world this week, but those four alone raised more than $100M with ideas that weren’t on anybody’s radar just a few short years ago.
I’ll be totally honest and say that I generally enjoy this website for the browsing experience rather than getting too much out of it. I think the real value is probably found in their custom reports which are going to set you back hundreds or thousands of dollars. I’ve never purchased one, but I’m sure the custom PDF’s are a goldmine to some of their clients like Kellogg’s and others.
While it is more of a ‘fun’ way to get ideas, they definitely can jump out at you. Most of the competing apps I found for Tinder, such as jCrush, were found on TrendHunter.
Before I give you the link to this page I’m going to preface it with a warning: You can easily lose hours of your time if you don’t stay focused on the task of finding great website ideas you can spin off location-wise or industry wise.
A Reddit sub-Reddit, Internet is Beautiful showcases interesting websites and ideas that people have found online. To get great content that isn’t too stale I recommend searching by the top submissions of the previous month. This link will do just that for you.
I mentioned in my last article that I find myself hearing about Product Hunt more and more and in the last few weeks that hasn’t changed at all. I think this is going to be one of the biggest breakthrough websites for 2016 just like Pinterest was when that first started out.
The page you’ll probably get the most use out of is their ‘Tech Collections’ page. While this won’t update as often as their Tech page, you’ll find a lot more ideas in one spot.
If nothing else, Product Hunt can be a great way to send thousands of visitors to your new creation if you truly get involved in the community.
A Somewhat-Hidden Kickstarter Page
Though I rarely fund projects on Kickstarter – I move around too often to have a dedicated delivery address – I do find a lot of inspiration in the hot products that make their way onto the site.
It’s easy to find the most funded projects of all time, but they’re likely a little ‘dated’ and not something you can really take much advantage of.
What you may not know is that there’s another little page on Kickstarter that is far more relevant and interesting for those of you who may be looking for ideas that you too can ‘spin off’ into other ventures.
This page allows you to see active listings (meaning within 30 days of being published) that are already funded. Meaning these are hot topics that the userbase of Kickstarter are excited about right now. And because it’s live, you can check back in weeks or months to come and find yourself with more ideas to steal.
Be Open to Inspiration
If you can’t tell from my Inc ideas series, I’m constantly on the lookout for new ideas and inspiration to take my web projects (or even just my blog posts) to the next level. This open-minded curiosity is something I’ve honed over a period of time and definitely not something I think I was born with. Though I do warn that if you take it too far your mind is going to be constantly seeking them out; not just when you feel like it.
I’ve personally set-up a system – which I’ll likely talk about in my next blog post – where I browse a certain succession of websites for a 15-20 minute period each day. I’m not there to read their articles but just to skim what is going on to see if any ideas jump out at me.
As I’m obsessed with cars (and equally depressed at their prices in Asia) I find myself reading a number of car blogs on a semi-regular basis. One site I follow is called Car Advice, which focuses on the Australian car market.
The site was founded by Alborz Fallah and was expected to generate around $7m in revenue in 2015. That’s interesting in itself, but what I find more fascinating is that Alborz has just launched a new site called BoatAdvice.com.au.
As someone who was ahead of the trends when it came to launching a blog on car reviews and now knowing exactly how to deal with car manufacturers, I sense that Alborz is betting on this being a very profitable new venture.
If you’re interested in the world of boats and fishing, there could be a great opportunity for you to follow his lead here. Even more so if you live anywhere near a harbour or coastal area where you could actually take the latest boats out for a spin if given the opportunity.
I could totally see this working well in Miami or Cape Town or anywhere else it isn’t too surprising to hear your friends’ boss has their own boat.
Set aside 10-20 minutes each day just to casually ‘scan’ the web to see what is popular and you might find these opportunities catching your eye far more frequently.
Is This an Unethical Tactic?
There are no doubt some people who are going to think this is not the most ethical of ways to make money online. I know that when I read about Rocket Internet copying websites down to the exact pixel I didn’t feel very good about it (you should see their Pinterest clone) . I think you can pivot from profitable ideas without having to steal the exact design elements of the site you’re copying.
On one hand, I can see how it would be disheartening for someone with an original website or app idea to see it taking off in another country or with a slightly different twist before they had time to get around to it.
On the other hand, if you’re creating a great service for end users (they wouldn’t be making money if they weren’t) does it matter if someone brought Zappos or Pinterest or Amazon to Germany before the big guys could do it? I sure wish Amazon shipped more products to Asia and I wouldn’t be mad at the slightest about an exact clone if I could finally get fast shipping on the products I wanted.
If I had a third hand, I would ask if there were any original ideas anyway?
In his bestselling book, Steal Like an Artist, author Austin Kelon says, “Every new idea is just a mashup or a remix of one or more previous ideas.”
Zappos may be a pioneer of focusing on selling shoes with incredible customer service, but they’re neither pioneers of selling clothes online nor incredible customer service.
Pinterest may have taken an approach to tagging interesting content in a new way, but Del.icio.us and Evernote might have something to say if you believe their core concept of ‘scrapbooking’ of tagging content is original.
When the market leader in mens grooming, Gillette, felt competition from shaving clubs they just went and created their own.
This little niche alone has quite a few funny pivots along the way. I had fun highlighting them with a different coloured font.
As long as you aren’t trying to duplicate a website design or trying to infringe on the location or exact angle of the ‘original’ idea creator, then I really don’t have too much of an issue with the potential of cloning. After all, the competition makes the average person win in the end.
Ideas Are Worth Nothing at All
When doing research for this post I noticed a number of examples where people wanted to talk about their ideas for web projects but they’re often very scared that people will come along and steal them. They’re scared of even pitching their idea to investors in case they don’t hand over any funds and instead pass the idea on to other startups that they work with.
The truth is that all of these ideas you have or will have after reading this post are worth absolutely nothing if you don’t do anything with them.
It’s not about having the idea, it’s executing on the idea and putting it into action.
You can say I got lucky when my ‘Please Don’t Kill Feedburner’ site hit the homepage of Hacker News but was I lucky in buying the domain, setting up a theme, emailing three bloggers for pictures of their cats and then dreaming up hashtags for people to use when sharing the site?
I have no doubt that this post – or the concept it represents – is going to result in a few project ideas hitting your mind in the next few days and weeks as the content here sinks in.
And to further show you how few people actually take action, think about that Pomodoro With Me app I mocked up a few weeks ago. I received dozens of tweets and emails from people who said they were “working on it right now” and would send me a demo as soon as it was done.
Guess how many I’ve seen? 1.
And it was only half finished.
I don’t know where your moral compass lies on this entire concept, but I for one will continue seeing where I can take new startup ideas and apply them to my own projects. If you do the same, I would love to hear about your journey.
I’m here every step of the way if you need a hand.
The post How to Steal the Next Billion Dollar Website Idea: A Case Study appeared first on ViperChill.