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http://www.businessweek.com/articles/2012‐02‐29/the‐germany‐website‐copy‐machine A purple rooster sculpture made from recycled grape Fanta bottle labels. Clocks designed to hang in corners. Bauhaus posters from the 1920s. Hand-painted vintage typewriters. These are some of the carefully curated objects for sale on Fab.com, the fast-growing flash-deal site for designer goods. Launched out of a loft in New York City’s Garment District last June, Fab had sales of $20 million in its first six months and is on track to earn $100 million in 2012. “We owe our success to keeping it real, authenticity, being close to designers,” says Jason Goldberg, Fab’s chief executive officer. That, and “offering people objects and design products they wouldn’t find elsewhere. No knockoffs.” Six months after Fab launched, it was knocked off. An e-commerce design site called Bamarang opened for business in Germany, the U.K., France, Australia, and Brazil. Bamarang sells cake stands made from vinyl records, miniature speakers handcrafted out of apricot wood, and plates painted to look cracked. Like Fab, it offers discounts of up to 70 percent on designer goods. The layout, color scheme, and typefaces are also suspiciously Fab-like. Bamarang even has a beautiful shot of an Eames chair as the background photo for its sign-in page, just as Fab does.
Fab vs. Bamarang Bamarang is the creation of Oliver, Marc, and Alexander Samwer, a trio of German brothers who have a wildly successful business model: Find a promising Internet business, in the U.S., and clone it internationally. Since starting their first dot-clone in 1999, a German version of EBay (EBAY), they’ve duplicated Airbnb, eHarmony, Pinterest, and other high-profile
The Samwers’ base of operations is a startup accelerator in Berlin called Rocket Internet. design. Zalando. Their parents often brought clients home. ja? It’s a unique gift that you either have or you don’t. others have a unique gift for the purest form of innovation. now dominates six European markets and is estimated to be worth $1 billion by Financial Times Deutschland. “There’s a certain humbleness.” Marc. he says. Their Zappos (AMZN) clone.. you can start innovating yourself. “I’m in love with startups. Spain. Sweden. though the chances of winning would have been slim. respectively—grew up in Cologne. and trademarks apply only within the countries where they’re registered. In November 2008 Groupon went live in Chicago and soon became one of the fastest-growing Internet businesses ever. and the brothers developed a love of entrepreneurial ventures.” Groupon (GRPN) got cloned by the Samwers two years ago. but a former high-level employee estimates the company is worth at least $1 billion. Ireland. Oliver Samwer. who speaks at a rapid clip. search engine optimization. Companies can’t be patented.) The Samwers are revered for putting Berlin’s startup scene on the map and despised for sticking Germany with a reputation as the copycat capital of Europe. the European Founders Fund. and the results were expensive for the daily-deal site. for example. It also could have filed an intellectual property lawsuit. 39. and Alexander—ages 41. Within five months it was the top deal-of-the-day site in the U. In total.” As for the similarity between. respectively. and 36. (Rocket now owns 6 percent of Groupon. Poland. the Netherlands. they also invested in European knockoffs of Facebook and YouTube (GOOG). Not that the brothers take offense at the label. and provides marketing.businesses. First you need to learn from people who are more experienced. rarely talks to the press. Denmark.K. Groupon could have fought Citydeal in the marketplace. a stake worth about $1 billion. Switzerland. the sons of two corporate lawyers. Groupon in May 2010 bought its German clone for 14 percent of Groupon’s shares. He elaborated in an e-mail: “The power of Rocket is really this huge galaxy of stars. Perhaps taking the path of least resistance. In January 2010 the Samwers launched a knockoff called Citydeal. France. Just as we might have a very good gift of execution. Oliver. Rocket launches companies. like his siblings. which sold for $112 million and $36 million. Finland.000 jobs over the years. and day-to-day management until the startup can fend for itself. they’ve launched more than 100 companies. and Turkey. and maybe we belong more to the execution entrepreneurs. says the firm has offices in at least 20 countries and has created 20. who. Bamarang and Fab. … From there.” says Oliver. Austria. “There are pioneering entrepreneurs and execution entrepreneurs. the middle brother and de facto head of the operation. Italy. Much of their time was spent . hires staff. frequently punctuating thoughts with a rhetorical “ja?” “I think the most admirable entrepreneurs are those with original ideas. Through their venture capital firm. Rocket’s executives won’t disclose revenue.” says Oliver.
where they shared a one-bedroom apartment and interned at various tech companies.” says Oliver. America at its best. raise money. They worried right up until the last minute whether they shouldn’t be copying Priceline (PCLN) instead. Calif. start businesses. EBay’s business model appealed to them from the start. Alando. Oliver persuaded a professor at the WHU to sponsor his dissertation on U. Oliver attended Germany’s elite Otto Beisheim School of Management (known as the WHU). and Alexander Samwer (left to right) in 2006 Later that year the Samwers declined job offers in Germany and moved to Mountain View. but it had a lot of budding Internet users with disposable income. “Before we started university. but in Germany.dreaming up companies. He later published his observations under the title America’s Most Successful Start-ups: An Entrepreneur’s Handbook. “Even on the day of our launch we were asking ourselves. “Everything was popular. and it’s something we thought maybe German hobbyists would also like. and everything was possible. “It’s a marketplace. The brothers moved back to Germany and launched their clone. ja?” The brothers studied how people find ideas. startups and spent three months doing five or six interviews a day with businessmen in Silicon Valley and Boston. and Alexander majored in politics and philosophy at Oxford before getting an MBA at Harvard.” says Oliver. we were thinking of starting an airline or a shipping company.S. and scale up. in early 1999. After a few months they recognized a huge market opportunity: Start an e-commerce company. In early 1998.. Marc studied law at the University of Cologne. Photograph by Dieter MayrMarc. “In ’98 it was just amazing.” says Oliver. you earn a commission. Oliver. ‘Is Priceline . Their home country had few Internet companies and little venture capital.
remembering the scramble to stock the site. Now. consulting. “It’s not necessarily in the blood of every American to go abroad. including a model train and some roller skates. but it’s in the blood of every European to go abroad. for the moment. They also get a lot of phone calls from the Samwers. he says.” . The CEOs of Samwer companies generally reap only 5 percent to 10 percent equity. Each floor is eerily silent despite the dozens of casually dressed employees. “they all want to be like the Samwers. but of course we needed everything. At this year’s DLD conference in Munich. but at that point we wondered who sends something to someone they’ve never met.” He stresses that company-clone relationships often become symbiotic. Says Oliver: “Groupon taught us about the business. A concrete stairwell connects three floors of undecorated conference rooms and open office space. Groupon CEO Andrew Mason praised the Samwers: “What people have to realize is the idea is the easy part.maybe bigger?’ ” says Oliver.” says Oliver. or corporate careers. “It’s probably not common with other investors to call you multiple times per day and at night. Four months after launch. often scanning their photos and putting them online himself. persuading them to put their wares on Alando. “My mother. Oliver was in charge of signing up stamp and coin collectors. and we taught them about internationalization. “Everything is easy now in hindsight. his students mostly went into investment banking. has stepped back from Rocket to concentrate on Groupon full-time. working on flat-screen monitors. who wanted to save the toys for her grandchildren.” he said.” says Holger Ernst.” says Johannes Kreibohm. the brothers are equal partners. Workers say the company is hiring so fast that newcomers sometimes have to sit on the floor.000 employees. Alexander focuses largely on Zalando and other Rocket portfolio companies. a professor of technology and innovation management at the WHU. CEO at the Rocket startup Plinga. Oliver manages Rocket companies but spends about half his time working for Groupon. or set up early-morning calls to walk through things. wasn’t so happy. ja?” Among the first items for sale on Alando were the brothers’ childhood toys. Marc. and Marc and Oli are the best operators I’ve ever seen in my life—they’re just inhuman. He called the sellers one by one. and that execution is the hard part. In the old days. among others. Although Oliver is the front man. The American daily-deal company hired the two older brothers as consultants in 2010 to guide its international operations in 46 countries and help oversee 7. Space is tight. “That had a major impact on the entrepreneurial scene in Germany.000 of its 10. EBay bought Alando for $53 million—and the Samwers became Germany’s first Internet millionaires. packed around Ikea tables.” Rocket Internet’s headquarters are in a drafty brick factory building set back from a graffiti-sprayed street in Berlin’s Prenzlauer Berg district.
to 11 p. he threatens managers with demotion if they fail to achieve a certain number of deal targets and customer acquisitions. nonperformers openly bashed in meetings as well as via e-mail. was for the Strüngmanns to provide 80 percent of the cash. In 2007 another set of German brothers. Oliver exhorts his team to do business like “a blitz-krieg invasion.” Groupon declined to comment to Bloomberg Businessweek. recalls seeing a list of international managing directors accompanied by a note that read. the Strüngmann twins handed over €10 million ($13 million) to invest in several companies. That included the German . An unknown sender of another leaked e-mail complained to Venture Village in September that “team meetings are full of insults. “Any one of you who does not achieve the following two goals in the next week will lose his ‘Director’ title.” The email continues (punctuation Samwer’s): “i do not accept surprises. Rocket’s employees work long hours—often from 9 a. who sets the pace and tone of the Samwer empire.000 e-mails a day or something. but in a statement to Venture Village it said the complaints “in no manner mirror the daily working routine at Groupon. reprinted by Gründerszene’s sister site. agreed to collaborate with the Samwers in joint investments. On Feb. i want this planned confirmed by all three of you: you must sign it with your blood … I am the most aggressive guy on internet on the planet. and crammed work quarters. In it. I will die to win and i expect the same from you!” The e-mail went viral in Germany. even inspiring a song called Blitzkrieg. with the rest coming from the Samwers. One former high-ranking employee.m. whatever midnight means in whatever country I’m in … and I think that.” One of the leaked e-mails. according to a 2011 article in Manager Magazin. I often write them after midnight. who founded the generic drug company Hexal.” The Samwer style may have spread to Groupon. problems making deals. In it. lots of emails. “Keep this list updated and check it regularly because fluctuation should be around 5 percent every month. “I write 4. The plan. I’m very passionate. but he could just as well have been talking about its corporate culture. once described Rocket Internet as “McKinsey on steroids. in which Samwer’s manic commands are set to a throbbing techno beat.” he writes. massive psychological pressure. To get things going while a contract was being legally vetted.” He was referring to his company’s international network. is from Daniel Glasner. a former managing director at Citydeal who’s now Groupon’s Central European CEO.” In December the blog TechCrunch published an internal e-mail from Oliver Samwer to his employees. Venture Village.” The Samwers’ reputation for ruthlessness extends well beyond their offices. the billionaires Andreas and Thomas Strüngmann.m. just like a lot of people we build companies with.Oliver. He apologized for his word choice but said. 17 the respected German magazine Gründerszene published internal Groupon e-mails and letters from employees that paint “a shocking picture of personal attacks. the New Single By Oliver Samba. who says he left the company in part because of a climate of aggression.
Asked whether siding with Facebook would seem like “competing with your own child. hasn’t gone unscathed. For the past two years the Samwers have been at war with yet another set of German brothers—Fabian and Ferry Heilemann. the Samwer company began spreading rumors that the Heilemann company was close to bankruptcy and that it was instituting a punitive arrangement with vendors. Holtzbrinck Group. “I think it’s all within the normal laws of competition. finally selling the company to Holtzbrinck Ventures. an image upgrade. Oliver Samwer was not apologetic. most lost their jobs in a mass firing a few months later. but it definitely didn’t happen systematically.” says Ciáran . Of the handful of DailyDeal employees who defected to Citydeal. be this Web company. the Samwers invested in Facebook (a stake they’ve since sold). Asked about these tactics.Facebook clone StudiVZ (from the German for “student directory”) founded by Ehssan Dariani. whose money would be held in special escrow accounts for three years—all untrue statements. one of Germany’s biggest publishing houses. StudiVZ’s Dariani told Manager Magazin in February 2011: “To put it nicely: I wouldn’t recommend that anyone do business with the Samwers. according to a person close to the Heilemanns. for €85 million ($112 million). The Samwers then took a 13 percent stake in StudiVZ and helped stage a bidding war for StudiVZ. saying Facebook was “light-years ahead” of StudiVZ.” Normal or not. and Alexander went on record with Germany’s Der Spiegel magazine. Shortly before the sale. “StudiVZ is now owned by the Holtzbrinck Group and not by us. with these amazing offices. ja?” says Oliver.” he said. “I cannot speak for every single sales person. It’s open competition between the best ideas. Just months after offloading the German social network. In early 2010 they sent job offers to nearly all of DailyDeal’s employees. perhaps. though a final agreement was never reached. founders of a rival Groupon clone called DailyDeal. kind of friendly. Oliver Samwer says joint investments with the Strüngmanns had been planned. luring them with promotions and raises.” The German site has since tanked. “We’re moving into a building that is five times the size of the old Rocket building. “I think they’re trying to look a bit like Google (GOOG). saying they hadn’t needed the money and effectively cutting the Strüngmann twins out of several million dollars.” Rocket is in the process of relocating its headquarters to a beautifully renovated building in Berlin’s chic Mitte district. and the best company will be the winner. Even the Samwers’ longtime business partner. Insiders confirmed the details for Bloomberg Businessweek but refused to speak on the record for fear of reprisal.” Alexander answered. according to the acquaintance of the Heilemanns. The new digs will give Rocket some much needed space and. Next. they returned the Strüngmanns’ €10 million.
gotten speedier in terms of rollout. “Things have changed. a partner at the German venture capital firm Earlybird. Zynga (ZNGA). Some say the Samwers have provided a bridge from the old risk-averse Germany to a more fertile startup climate. more aggressive.” .” As for Fab. “OK. “The shift was maybe from quality to quantity. Russian entrepreneur Yuri Milner. The German media speculated it was because of Oliver’s bad reputation. He points out the similar font and word choices on the “About” pages. Oliver says. “None of this is a problem. “They’re less of a copycat and more a group of people who came up with a similar idea. media companies have invested with us. Over the years probably 20 VC firms have invested with us. called Project A Ventures. that will focus on backing original ideas. “But we can do better than this. and done more in a copying way. “But there’s the saying. we respect the fact that you’re really good at execution and copying business models.” says Goldberg.” says Uwe Horstmann. you can’t expect them to act like dolphins.” In February. announced they were leaving to launch a rival startup factory. And Berlin has begun to attract non-clone entrepreneurial ventures.com. 21 announced its acquisition of a German nonSamwer facsimile. some the Samwers’ closest allies.” In January about 20 Rocket employees. the design site on Feb.” says Jessica Erickson. pulled out of a plan to invest in Rocket.O’Leary. but at least they use different colors. and Twitter. at least design your own website. private equity firms have invested with us. It’s kind of flattering. ‘If you hire sharks. Casacanda. Responding to this claim. who worked as a managing director at Rocket and is a founding partner at Project A Ventures. 6Wunderkinder’s communications director.” says Goldberg. but come on: If you’re going to do something about design. “We even saw a job posting they had that was basically copied and pasted from Fab. an investor in Facebook. Last summer a local startup called 6Wunderkinder called for an anti-copycat revolution. “There are other clones that copy Fab very closely out there.’” An image boost couldn’t hurt. Not everybody was fully on board with that. who’s sitting at his desk flipping back and forth between Fab and the Samwers’ Bamarang site.
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