2024.12.29

LXXX

I want to be a dragon, but there's nothing wrong with being a lizard. If it ain’t broke, don’t fix it.

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Steal Like an Artist*

Originality and creativity are important in business, but it is just as important to be able to copy what you know is working. 

That is to say that you shouldn’t decide that, for the sake of creativity, you’re going to incorporate your business in Botswana as a partnership to sell wooden water bottles exclusively to Canada sourced from the amazon rainforest with shells from apac floating inside of it to harness spiritual energy from the wood. It doesn’t make sense to do all of that for the sake of being “truly original.”

The ways in which you divert from other businesses impact the risk associated with your venture, and potentially the return, too. 

Evolutionary processes are incremental for a reason. While a dragon would be an apex predator, nature is more likely to give us a slightly better lizard than a dragon.

As the old adage goes, “If it ain’t broke, don’t fix it.” 

Translating this into nerd, we might say:

On the other hand, this isn’t an invitation to go and carbon copy someone else’s business–I’m inclined to think that doesn’t work so well, either. That being said, it seems to work better than businesses as bizarre as the Botswana one.

*I, myself, stole this phrase from a book of the same name.

Infinite Possibilities

A consequence of a process like genetic evolution or the economy is that, while there are a finite number of things that exist, there are infinitely many configurations of things that could exist but don’t. 

Directly following from this, novelty is not inherently valuable. On the other hand, existing things are valuable in that their mere existence can tell you something about how well they work. 

So yes, the wooden water bottle business is a possible thing, but I don’t know that much about it. We tend to know more about things that are closer to an existing configuration. After all, natural selection does not give us the “best thing possible,” it gives us things that are better than other similar things.

This is both good and bad. It is good, because the process produces things that tend to “work.” However, it is bad, because at any given time, you can find yourself at a local maximums rather than a global maximum.

It is entirely conceivable that there is some creature, like a dragon, that would not only be cool, but would be an apex predator. Given the lack of reptiles with wings or animals that can breathe fire, the possibility of an evolutionary process yielding such a configuration anytime soon is unlikely. 

Caption: No wings, no fire breathe, but these things are like rabbits in parts of the world

Now, a difference between business and biological evolution is that in business, it is theoretically possible to go from a lizard to a dragon, almost immediately–you can make bigger jumps, if you want.

Carbon Copies

In a way, Airbnb was a dragon. While it did not invent web or mobile apps or travel or the fact that people stay places when they travel, it did make previously inconceivable things for both hosts and guests possible.

Now, copying a dragon doesn’t have the same reward associated with it as does making the first dragon.

I personally don’t think it makes sense to be a carbon copy of your competitors. I don’t think anything makes it inherently immoral, and it likely leads to competition, but it is not the path for me. 

Airbnb was carbon copied–and no, I’m not talking about VRBO. There was an exact European clone years ago that was poaching Airbnb hosts and scraping their data. 

The romantic in me says that exactly cloning someone tends not to work, at least not as well as leading. The returns of doing so will be inherently lower. The company you’re copying has already “de-risked” the idea to some extent. Now, the copycat is increasing supply and forcing the returns down. 

And, in the case of Airbnb, the copy cat ended up folding. Chesky posits that part of the reason for this is that the copy cats were “mercenaries” rather than “missionaries.”

As I wrote about a couple of months ago, I think another element at play here might be that it is more valuable to be able to create a thing than it is to have a thing. I think being able to copy a business that works and creates value is less valuable than being able to create a business and create value. That would follow from the decreasing returns when more people are on the same side of some bet. If you must always copy and are unable to innovate, you will always lag the innovator. 

You will also lag the genuinely differentiated competitors that will certainly pop up, like VRBO in this case.

When To Copy

Unlike Airbnb when it was copied, BirdDog is small enough that we don’t really have to worry about carbon copies yet. And, we’re not obviously a dragon. We think we have things about us that can make us a dragon, but we are another lizard until proven otherwise. Rather, we are on the other side of the equation–what things should we copy, and what should we not?

Being completely honest, I don’t really know for sure. High level, though, we are copying things that we have no reason not to. 

In Q1, we’re going to play around with “Product Led Growth,” meaning letting people buy BirdDog without talking to us first. So, Jack redid our website to make this possible. 

The catch is, however, neither Jack nor I have ever designed a website to get people to pay for a software product without talking to us. So, to redesign the website, Jack spent a lot of time looking at our competitors' websites. Why would we guess and start in the space of infinite possible configurations when he could go and visit winning strategies and learn from them?

That being said, Jack also did more general research on web funnels that get people to buy things. And, he found some areas where our competitors differed from these. So, we’ll be a/b testing these differences to see if maybe all of our competitors have been copying each other and landed on a “local maximum” website design rather than a global one. 

Only time will tell. Regardless, in terms of something we know nothing about, we’re following suit of the winners. 

Elsewhere, we may seriously divert, but that’s only where we think the wings and fire breathe are. 

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While I’d rather be a lizard than a non-existent species that goes extinct whenever it appears because it just sucks, I’d also rather be a dragon than a lizard.

Live Deeply,