entrepreneurship, Lean Startup, startup

On Rocket Internet vs Startups


There is a discussion going on in Germany at the moment on startups vs the Samwer brothers’ incubator or company builder “Rocket Internet”.

And I have only two things to add to that.

  1. I have the utmost respect for the efficiency of the Samwers. Copycat or not is not a point in business. They might be vulgar to your tastes, but there is no denying that they are exceptionally good at doing business. Period.
  2. What the Samwers’ Rocket Internet is doing is not founding startups – and I think school, particularly traditional business ed, and an uninformed media is to blame for perpetuating the wrong association of concepts.

To wit:

Rocket Internet is creating new businesses based on already working, proven business models, so let’s stop associating the word “startup” with what they are doing, right now.

Startups are temporary organizations in search of a repeatable and scalable business model.

What the Samwers are doing, is executing known business models, not searching for, nor validating new ones.

Ergo, Rocket Internet is not founding startups.

In fact I heard it from Oliver Samwer himself at IdeaLab at WHU in 2013 (below) that he’s only interested in owning (e)commerce on the Internet.

That’s a well-know business model with a foreseeable, albeit huge total available market.

That means they are still playing the old Industrial Age game of growth of market cap through command, conquer and defend. Which is OK if you know which game you are playing.

The new post-industrial age game of growth however consist of continuously creating new markets (and of course owning them).

So the Samwers and Rocket Internet are not creating startups, not searching for new business models nor creating new markets.

This, however, doesn’t detract my respect for their successes in the least.

What I wish is, that we can achieve a more informed public that knows and understands what a startup is and how it differs from a new company.

I think that is extremely important, because they are indeed not the same thing. The processes to run one successfully is in most parts diametrically opposite of the other.

If we continue to confuse the one with the other, we’re deliberately creating less competent founders that will keep on doing the same basic mistakes, fail because of the same old misconceptions.

Because today, we actually know better than to conflate the two.

And if you want to get up to speed on what we know now, I suggest starting today with the excellent – FREE – introduction course by the father of the Lean Startup, Steve Blank taught at over 100 elite universities (like Stanford, Berkeley, Colombia, University of Cologne, et al) and a growing list of +30 accelerators and incubators worldwide: The Lean Launchpad