How Copycat Culture Is Redefining The Innovative Spirit Of Silicon Valley?
Photo: Jeremy Bezanger / Unsplash
Steve Jobs, founder of Apple, once said “Customers don’t know what they want until you show them” and it is more than true in this ever changing technology landscape. Every now and then, innovators come up with new products or services and create fear among the established market players.
Even after decades of operations Google, Amazon, Twitter, and Facebook, previously known as Meta, among many other companies with similar history show no any signs of slowing down. With cash reserves amounting to billions of dollars, these companies don’t hesitate to experiment with new features, which is a luxury for new companies with limited financial resource.
When they are not experimenting with new features, they watch out for rival services. If you can’t beat them buy them or join them philosophy is deeply embedded in the Silicon Valley’s growth culture.
Startups with promising future receive lucrative offers from these companies after all these mighty companies have both financial and technical resource to take the company to the next growth level. Meta, which is previously known as Facebook, purchased Instagram in 2012 for $1 billion in cash and stock. After a decade, Instagram, which reached 2 billion monthly active users in 2021, is one of the prized possessions of Meta. The other one is WhatsApp purchased for $16 billion.
The search giant Google earns 80 percent of its revenue from digital advertising. Google reported revenue of $65.12 billion for the third quarter that ended September. Thanks to the $3.1 billion purchase of DoubleClick in 2007, the online advertising company with strong presence in online display ads, Google eliminated the competition and established itself as a major player in the online advertisement industry. Microsoft was also the leading contender in the bidding process of DoubleClick.
Not all startups shared the similar fate of Instagram and DoubleClick. Meta, then known as Facebook, unsuccessfully tried to purchase Snapchat, which is famous among teens for its colorful filters and especially for ephemeral message known as Stories. Instagram and later Facebook introduced cloned version of Stories, pioneered by Snapchat. Stories in Instagram took off with millions of users using the feature and gave Snapchat a hard time to grow its user base.
Popularity of Zoom, online video conferencing tool, during the Coronavirus pandemic put the employees at Google, and Facebook at work. In addition to employees using Zoom for attending work calls, people were using Zoom to socialize on a daily basis. From sharing Yoga classes to meal preparation, Zoom established itself as a major communication tool for people confined in their homes. Not long after Zoom surged into popularity, Facebook and Google introduced its own competing products. Facebook introduced Rooms in the company owned Messenger platform and Google came up with Google Meet.
Clubhouse, audio based social media platform, has been gaining momentum for its new approach in the social media industry. After Elon Musk, CEO of Tesla, and Mark Zuckerberg, founder and CEO of Meta, appeared in one of the talk show, Clubhouse popularity skyrocketed. During the last funding round in April 2021, Clubhouse was valued at eye-popping $4 billion valuation.
The early success of Clubhouse invited competition from Facebook, Twitter and Spotify, music streaming company. Facebook introduced Hotline, Twitter introduced Spaces and Spotify came up with Greenroom. All these companies have what Clubhouse is struggling for — huge user base, billions for Facebook and millions for Twitter and Spotify, and enough cash to attract creators to use their platforms.
Creators with substantial number of followers in the existing platform like Twitter won’t bother to try Clubhouse where they need to start from scratch. The motivation to continue in the existing platform is further bolstered by the attractive incentive program. Twitter rolled out Spaces Spark Program where it provides $2,500 per month to audio content creators and other technical support to continue using Spaces instead of competing services like Clubhouse.
Silicon Valley tech companies even went after TikTok, the first app from Chinese company to have a global success. TikTok became an instant hit among millenials and Gen Z and became the only app outside Meta’s portfolio to have monthly active users in billions. And guess what, today every major social media companies — YouTube, Instagram, Snapchat, and Twitter– have their own version of TikTok. YouTube has Shorts, Instagram has Reels, and Snapchat has Spotlight. Twitter changed its Explore page with video feeds in the format championed by TikTok.
YouTube has announced Shorts fund of $100 million to be distributed among creators for the year 2021-2022. Meta has pledged $1 billion to reward creators in the year 2022. Spotlight from Snapchat announced to give $1 million per day to its creators. Of the many motives behind such incentive program, one was to lure creators from TikTok, which has its own Creator Fund of $231 million. Had TikTok not been backed by ByteDance, a billion dollar startup, TikTok would not have come this far relying in its unmatched recommendation algorithm.
The rush to launch copycats from Silicon Valley tech companies to protect their turf exemplifies the so called if you can beat them, buy them or join them theory.
Lately, the copycat culture in Silicon Valley has been a common phenomenon, increasing the risk for promising startup like Clubhouse to be overpowered by the deep pocketed companies. Clubhouse cannot challenge the legalities of other audio based product unless it has copied the Clubhouse source code. And so the Snapchat to Instagram for cloning Stories feature.
Unless there is a way in digital world to protect their innovations, innovators should be prepared to face stiff competition and even face existential threat if their products seems to rival the powerhouse of Silicon Valley.