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Comment by mmelin | Hacker News Reader

This is big. Rocket Internet is a perfect example of what's wrong with the European startup ecosystem. I don't doubt they'll have a successful IPO, but it will leave a foul taste in the mouth of Europeans, especially Germans and Swedes.

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Why? I'm European and I don't really have any strong feelings about it. Isn't this capitalism at work? I'm really having trouble seeing the issue. If laws have been broken that's one thing but fair competition is another entirely.

In some recent posts, the founder of the german studivz (facebook copy cat) accused the Samwer brothers and other german copy cat incubator leaders of tax fraud and very bad behaviour against their employees e.g. using ~90% interns, make them work 12-14 hrs for near-no-pay, headhunt people from concurrent companies just to fire them 2 weeks later to "burn" them for "both" companies.

In the so called "management" level some people should got fired just right upfront a deal or deadline to rip their bonuses.

While I was not involved personally, I often hear and read about this and it looks to me that competing companies did/do it the exactly same way, not only the Samwers/Rocket.

That's why the "German startup industry" is broken. If you can only clone ideas, twit employees and (as someone claims) rip off dumb billionaires, this should not be a role model of entrepreneurship on HN.

You know, I see your point. Our mantra is "ideas are worthless, execution is everything". Rocket is an execution machine, and they deserve recognition for that. The problem is that because they are so successful at copying ideas and executing them in other markets, it reinforces the stereotype that this is what all European startups do. Maybe it's simply a matter of lack of confidence on the part of us Europeans, but I think a lot of people agree with me on this.

Rocket Internet identified a market in the fact that American companies often ignore the European market for years.

Because of their large home market, American web startups can grow to considerable sizes before having to worry about multiple languages, multiple export rules, multiple tax systems, multiple consumer protection regimes, multiple payment systems etc. That is a huge advantage that American companies have over European startups. Rocket Internet and their like are levelling the playing field a bit.

All business ideas are to large extend inspired by others. Maybe some of the companies the Samwer brothers "cloned" were truly first in their field, but if they had taken the German market serious the Samwer brothers wouldn't have had a chance. It's their bad.

I don't think this is true. I follow tech trends fairly closely, but I use very few of the consumer tech startups, with the exception of Spotify, which was created in Sweden. Those on HN may have this perception of the Europe startup scene, but most consumers only care about whether the product is valuable to them, not whether it is original.

From the article they have expanded to doing this in Brazil and SE Asia now too which makes it a more interesting business.

I, an American, have a friend in Germany that worked for Rocket Internet to get into the startup industry after coming from a strong business consulting background. Even they saw it as doing something a little unethical in order to get experience and move on. They have since left and are now running the supply chain for an independent startup based in Berlin. This Independent startup is an e-commerce site, much like a Gilt/Tchibo mashup. While it is not terribly innovative, it has taken an Idea from the US and merged it with the culture of Germany. I don't think Gilt would be able to move into the market so easily, just as Walmart trying to go to Germany was a failure. We may see this as not very exciting, but the idea of any startup in Germany is counter current business culture and Rocket Internet is responsible for helping change the culture, albeit slowly.

EDIT: Tchibo is a chain of small stores that typically contain a a coffee shop and has goods that change regularly, usually as needed for the season. They appeal to the Germans consumers sense of best value for the money. They in a sense are the working persons Gilt in brick and mortar stores.

Mmh, I don't know but there's no foul taste to me. I regard them as kings of execution. Yes, they don't "invent" business models but they take what works and execute on it. Nothing wrong with that - it's how most business made money for many many years.

They don't just copy business models - in most cases, they straight-out clone entire sites/products and resort to poaching to force the "competitor" (original product) out of market.

Sorry that I can't read between the lines, but "what's wrong with the European startup ecosystem"?

Politicians focusing on social benefits instead of new sources of growing revenue, like startups. In my opinion EU politians do too much when we the people know better what we need. I don't mind paying taxes as long as they don't keep me from growing my business. And guess what? That's exactly what EU needs. More people who know how to do business, raise money, and give back to the people, all in one sweep.

Although I agree on the lack of focus by politicians on startups and entrepreneurship; this is not a political problem. If not, how did politicians help Facebook, Google, Microsoft et al. get started?

That was too easy. Money!

Politicians don't care about small to medium businesses, only big. I guess you know where I'm heading... They only care about big businesses not for the jobs, but for the under the table revenue they provide. They like to talk about jobs in the evening news on tv to make people happily vote for them. Meanwhile, we have to deal with that crook employee on medical leave for six months enjoying his life on Rio de Janeiro beaches while we struggle to pay his salary instead of paying someone who delivers. All that because the law allows him to do it.

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