As much as it pains me as a person who values intellectual property, I have to admit that copying is a valid and important strategy. At least half (anyone know of a more educated number?) of the development in Asia since the Meji Restoration consists of pasting Western ideas.
I hope this means that all startups take the internationalization seriously from the beginning. Hopefully we can get some sort of solid services / startups / processes that can help internationalize companies much earlier on.
The current crop of localization services are frankly inadequate.
There's a difference between ideas and the expression of those ideas; that's why patent and copyright are separate. What's being complained about here goes beyond copying ideas, into copying expression.
I'm not against stealing ideas and methods from other companies, internalising them then IMPROVE upon them. That's part of innovation.
But blatant copying?! Even the UI?! C'mon Kai-fu, I'm sure Innovation Work can do better than that. The whole purpose of Innovation Work (which is itself a copy of YC, for those of you who don't know) is to spur entrepreneurialism in the region, but all I see is setting up a very bad example. I can't imagine how the founders feel OWNERSHIP in their startups. It's more like a gold rush.
I'm disappointed with what Kai-Fu Lee is doing; I guess I expect more from him.
Disappointment aside, though, this strategy works. Take something that works, and apply to the China market. Why reinvent the wheel? But I'd argue that they should do a better job with "copying" -- you don't really want to invite criticism for no gain, unless the blatantness of copying is part of the strategy (to show investors that they literally and successfully cut-and-paste working startup businesses, like an assembly line).
Hmm, now that I think about it, perhaps that's the whole point.
"Innovation to help achieve the goals of sustainable development can start in many ways, including: “copy-catting” (i.e. Japan, Korea and China first mimicking manufacturing techniques and then becoming world leaders.); “piggy-backing” (i.e. India performing service work for rich countries and adapting information technology to local needs); and “leap-frogging” (skipping over technologies that are inappropriate in a given place and time and adopting more sustainable solutions).
....................
“Copycats” imitate ideas, technologies and techniques from other countries and improve and adapt them. During its first few decades, the United States took the key
secrets of the Industrial Revolution from England, Scotland and France and launched its own industrial economy. Two centuries later, Japan and then Korea developed by
adapting American manufacturing, raising the quality and lowering costs. These days, China is doing it with much success, moving up the innovation ladder at a rapid rate.
“Piggybackers” ride on the backs of rich nations by doing more and more of their manufacturing and service work at far lower costs. India is practicing the art of
piggybacking right now, using advanced computing and communications technologies to perform software development, tele-services, and even high-level innovation at a fraction of the labor costs compared to performing the same jobs in the United States or Western Europe. A recent study showed that one in ten U.S. software jobs will be exported to places like India and China over the next five years.
Finally, “leapfrogs” skip over inappropriate technologies and embrace new ones, such as Finland’s sudden break from Soviet domination and its rapid adoption and development of new inventions like wireless networks.
I like the list of strategies, but I have to question calling any one of them "The Chinese Way." I mean, here in the US, companies leapfrog, piggyback, and copy all the time -- often within the same product. So you might as well call it all "The American Way." With the size and diversity of the tech industries in Japan, China, and India, we can probably assume they're using The American Way too. Which I think is great (the occasional bit of outright plagiarism aside).
Well, plenty of American companies copy, producing essentially the same product with their own name on it, often trying to make it look similar to the original--I'm thinking of store-brand food here, "Mountain W" soda from Wegmans for example. The Chinese methods of copying typically seem more deceptive; "Somy" and "Sarnsung" electronics for example, although sometimes the cloners just throw on the "real" name anyway. Of course, this becomes easier when all these companies do their manufacturing in China anyway, and it just takes an unscrupulous manufacturer to make an extra run to sell as "knock-offs". Oh, and there's always this hilarious story: http://www.nytimes.com/2006/05/01/technology/01pirate.html
I do agree though that the American way is basically to do whatever you need to make a good profit, be it coming up with the next great product (the iPod), ride along with a great product (the companies that make iPod docks/sleeves/cables/whatever), or copy a great product (Zune, and didn't that turn out well?). I just think the American copies are slightly more ethical than some of the Chinese ones.
Tumblr will have the last laugh here. There's practically no market for tasteful online advertising or paid software in China. So, while he might rack-up users it will be hard to monetize this.
Not really, since Tumblr doesn't have any ads either. Come to think of it, besides selling premium themes, how else does Tumblr make money? Surely all the trust-fund hipsters on the site don't bring in wheelbarrows of money with their ironic 1-gear eco-bikes, do they?
You were downvoted for adding a snidey remark to a decent question. Next time just ask the question. Since I'm curious as well, how does Tumblr make money besides themes? Does anyone know their monetization strategy?
Meta: I come to HN not because it is a logical syllogism server but because it often has thoughtful, interesting comments. I own a couple of single speed bikes--for all we know shii does too--and I didn't get offended by his comments. While I'm against viciously abusive attacks on people, I think there's a danger in trying to create a Disney World like atmosphere where no one poops or says things more caustic than "gosh."
Yeah, sorry I forgot Hacker News was all srs bznss where no humor is tolerated whatsoever.
On the Tumblr monetization front, TheStartupist[1] covers a good portion of their story. Checking Crunchbase[2] shows that they've gone through pretty large funding rounds, with their last one (D) at $30M the largest. I've been trolling Tumblr for the last year and half, and the only things I've been able to scrounge are the $9 Directory listing under your category of choice and the premium themes.
They're still growing massively, as all the cool kids congregate there to post their Instagram-faded pics of teenage angst, but are hemorrhaging money like Twitter. And like Twitter, advertising is viewed as pure evil[3] and not a viable solution to generate revenue. Twitter realized the inevitable and started Promoted Tweets recently, and Tumblr will have to do something similar soon as well. Maybe they make enough from the themes, but that seems a little quixotic.
Tencent is the second largest Internet company in the world, and it monetizes primarily through virtual goods, including blog themes. Chinese users don't buy software, but they do pay for online services.
Tencent is... unbelievable. I saw that huge piece of crap IM client on the PC of basically every Chinese grad student I knew. I also recently found out that their QQPlayer media player violates the GPL by including code from ffmpeg without any attribution or licenses; combine that with the way their IM client used to, and still may, censor messages, and I'm wondering what the hell else they're up to! :)
I live in China (well, 40% of my time), work for a social network, and I think you're wrong.
Tumblr is sometimes blocked here, and I would bet that it's going to have the same destiny as Facebook and Twitter here.
The local Facebook clones work very well here, as does the local Twitter clone (that employs something like 500people). Meanwhile, the "originals" are blocked, and only people who can access internet through proxies or VPNs can access them.
Therefore, I don't really think of any reason why Tumblr would have the last laugh.
So basically this is a business model that can only survive because of restrictions set by the current government.
What will happen if China and the US reach some kind of agreement, and unlocking online US-services will be part of it?
AND when cloning physical goods (like phones, cars, clothes, shoes, whatever) -- you can export them, since people are willing to pay lower prices for clones. How can you export a Tumblr or a Twitter clone, when both are freemium?
How are these clones surviving? Do they generate revenue, when Tumblr, Twitter and Facebook can barely do it?
From what I understand, micro-transactions for virtual goods is a lot more common in places like China, and if you can offer custom themes or other "value-added" services to these clones, you can monetize off of that - must like Farmville makes money on selling people special seeds.
If China and the US reach some kind of agreement - and the services were unlocked - there would already be enough of a market share for the existing clones to maintain control over that market. Future clones would still have a chance in succeeding as well depending on the race to localisation of the products in the local language and demographics.
I'm not so sure about this? Has tumblr gotten its way to profitability yet? I don't know.
I'm sure they will figure it out eventually, I'm just unsure whether they are going to have an easier time then this chinese clone(at least to the point where they will be pointing and laughing).
Lets not forget that tumblr has spent millions of dollars and years coming up with the mix of what makes tumblr work and it has been essentially copied wholesale, if this ends up working in a chinese market, thats a huge competitive advantage for the chinese clone, because they didn't have to spend any of that money or resources to begin with.
While this example is a little extreme in its similarity with the original, copying a startup idea and implementing it in another market than an English speaking is not just done in China. Here's an article about a bunch of european startups doing the same:
I've often wondered if one of the (many) reasons why there are so few successful startups coming out of Europe is due to the copying.
I visited Berlin a while back and my buddy was telling me about a bunch of guys who've built a successful business (dozens of engineers) just cloning 'hot' American products.
It's got to reduce the number of people working on brand new ideas. (I'm not suggesting that you can't build a great business by copying somebody else's work, but you won't build a world-changing, super innovative company doing so)
Heh, that may be a factor, but I doubt it's the main one. Lots of American HN users seem to be pretty Liberal in their political outlook, and that's fine. But consider Germany, with a welfare state that looks after you from cradle to grave. If you want to start a startup there then you'd better have your EUR 20,000 in capital minimum, and you'd better do all the paperwork and comply with all the regulations and have the right certificates and diplomas... The activation energy is just so much higher in Europe, two guys hacking in their garage can't just go for it without a lot more preparation. If you fail you won't starve of course, the State will look after you but that's a two-edged sword - not only is it harder to get started, there's less hunger to succeed, and everyone will be used to working only 35 hrs/week...
We actually have an idea in an area which is - if I read posts on HN - pretty well funded. VCs and Angles have a lot of interest. But in Germany, people don't see it - the ones with money even less. And its really hard to start a business, as you already summed up.
We even think about moving to the US, but as a foreigner it's also not "easy" (well, noone said it would be easy to start something on your own - but you get what I mean)
Almost all the promising startups in Vienna move to London, either entirely or moving the HQ and maintaining only a development office back home. I wonder if hiring good developers is easier/cheaper in mainland Europe than in the tech centres where there seems to be a shortage right now.
This argument doesn't make sense to me. Better wellfare lowers the risk of working at a startup, which would make more people try it. I guess work regulations and employee rights are make things harder in Europe than in the US, though.
According to Inc., "Norway has more entrepreneurs per capita than the United States":
I don't think this is just about startups in that case, it's about big corporations. Most European ones have been around for quite a while, I think it's not as common for newcomers to join those ranks here. I'd be hard-pressed to name big companies that arose just recently.
We do have a bit more middle-class companies, or at least so it seems. As with almost everything, the US is more about extremes than Europe.
There is no causative link, you're right. But if you look at any of the major welfare states in Europe - Germany, France, Sweden, for example - then you will find that they are also highly bureacratic. That it is a mere correlation doesn't make it any less true!
A state that incurs high welfare costs when a company fails has an interest in reducing the number of failing companies. One way to do that is to require new companies to have capital, hire qualified employees, etc.
(No, I'm not taking a position on whether that's a good idea. I am not an economist, and I try not to play one on the Net.)
That is true, but one can certainly envisage such measures harming the state in the long run - increased bureaucracy might prevent some companies from starting which would succeed and therefore deprive the state of tax revenue. One Google would cover the costs of a lot of failed startups :)
(Not really an economist either, although I do have a little training in the area..)
Wow. Is this "everything I need to know about Germany, I learned from Fox News"? Let me pick apart the pieces
1) 20k minimum for startups
You're confusing a few things here. The costs to form a company depend on what kind of legal form you want it to have. What you're talking about is the GmbH (basically a LLC), where you actually need 25k of capital. This is by far not the only form a company can take. If you just want to make sure that every founder gets its part, you've got a name for the company etc, you can form something like a UG. If you don't have more than three founders, you can use some standard forms and everything's done within a few days at most. And even if you want limited liability and don't have the capital, you can choose from several other legal forms available in Europe. The British limited company is quite popular, as you need less capital.
This is hardly a problem for most IT-based startups, who rarely have a lot of founders or actually trade something (where limited liability is quite welcome).
2) Diplomas/certificates are required
There are several cases where this is true, but I don't see any that would affect startups. Yes, if you want to become a hairdresser or want to open your own carpentry shop, you need to have the proper papers. For a web-based startup? What kind of papers would those be?
3) 35 hrs/week
That's France. Never mind that the difference between a regular job and startup hours doesn't have to be that different. And even if you're doing the stereotypical 100+ hours a week, the difference to a regular job in any country will be quite high (well, South Korea excluded).
4) Less hunger because of welfare
Hows is that particular to startups? If this were true, people would drop out of almost any job because it would be easier otherwise. Germans on the dole don't live in limitless luxury.
I'm not saying that there isn't a tendency to copy things here. The whole Facebook vs. StudiVZ affair is pretty embarassing. But that's basically one market niche some companies are filling, it's not really representative of the whole German startup scene.
Yes, there's no equivalent to the venture capital-backed silicon valley startup scene. But that's pretty unique in the US, too.
Concerning the 35 hrs/week: it is the legal duration for work above which you are supposed to pay a higher hourly rate. It is NOT a maximum, and many people work more than 35 hrs/week (the figures for working hours are pretty similar between France, UK and Germany, with UK having the lower on average IIRC, but I cannot find the figure ATM).
There's some data on "Eurostat"[1]. It gets quite complicated, depending on whether you consider full-time, part-time employees, the self-employed, family workers, sick time, maternity leave etc.
But yes, it seems to hover around 40 hours for most countries. Strangely even for France, where this is bordering on the illegal... Found an old page where the Brits are complaining that they're working more than the average, don't know how they filtered the results to get to that conclusion. The Swiss do seem to live up to their industrious stereotype, though...
Never heard about a 35+ pay hike in Germany, though. Considering that there's no minimum hourly wage and most people are paid fixed salaries anyway, this wouldn't even get you very much. Sounds more like a result of collective bargaining than a federal law.
its clever because not every us startup works without localisation everywhere. ebay/groupon and to a certain degree facebook need localization and if they arent able to get this fast clones will appear and people will flock to these clones because the idea is great but the us company is incapable/unwilling to cater to different markets than the us fast enough. it seems as if other markets are only an afterthought.
> it seems as if other markets are only an afterthought.
As someone living in Canada, I can't tell you how frustrating it is to see great companies not servicing their neighbors to the North. Examples: Amazon Mechanical Turk, Google Checkout, Google Voice, Braintree, WePay.
From a VC fund perspective, this is a sound investment strategy -- take what works in the US and clone it in your market. It lowers risk significantly since the idea already has traction. At some point you'll have to innovate, but you can always copy until then.
Something that we tend to forget is that we learn by imitation — and industries are no different than individuals. Chinese firms will start to evolve their software to local tastes and will slowly set themselves apart from mere clones that don't translate well. That will be followed by free form borrowing of the best ideas from multiple sites — and that will be followed by local innovations. And at that point China will begin to export their software as the world wants to talk to them (much the way you'd join LinkedIn from abroad if you wanted to do business with Americans).
Well, the Chinese have no shame. If copy-paste your competitor's UI isn't shameless, I don't know what is. Seriously you raise funding and yet wouldn't spend some of it on a good UX designer?
MS Windows 'borrowed' alot from Mac's UI, and nowadays most smart phones are copying iPhone's concepts. I feel the hidden interest in this thread is more on Chinese/China bashing rather than intellectual property.
Did Windows clone the Mac UI right down to the color and pixel and then replace the Apple logo? I think the bashing here is well-deserved, above and outside the discussion of whether China has a demonstrated economy of copying (it does).
Also, there's a special place in hell for people who can't just come out and call a clone a clone.
For many years I've dealt with clients who were incredulous when I told them "no, we can't/won't just clone Yahoo/Facebook/etc" when a pixel-for-pixel copy was precisely what they wanted. There's an important creative and IP distinction between stealing concepts and cloning every aspect that some people just don't grok.
Are you questioning the meaning of this phrase or its applicability? If the former, then it is a reference to Dante's The Divine Comedy. If the latter, then in The Inferno, there is a special place reserved for thieves and betrayers. In a way, if you are a hacker and you blatantly rip-off the work of another member of the community, you are betraying said community. So the innermost circle of hell is reserved for you with Brutus, Cassius and Judus.
"In a way", yes. We're talking people who killed their own families, and both Christianity's arch-betrayers (Judas and Satan).
Wikipedia: "The traitors [who are suffering in the deepest circle of Hell - me] are distinguished from the "merely" fraudulent in that their acts involve betraying a special relationship of some kind. There are four concentric zones (or "rounds") of traitors, corresponding, in order of seriousness, to betrayal of family ties, betrayal of community ties, betrayal of guests, and betrayal of liege lords. (...) the traitors are frozen in a lake of ice known as Cocytus, with each group encased in ice to progressively greater depths."
When I was first learning the piano I numbered the notes from Beethoven's Fur Elise, then numbered the keys on my keyboard to match. Then I just pressed the keys in order. Eventually, through muscle memory, I could play the piece pretty well. But I had not learned anything. I just imitated.
One wonders if the likes of Google and Microsoft employed Kai-Fu Lee so that he would be less inclined to fund / promote clones of their products in China.
These copy cat sites (and similar ones in Europe) are an interesting test to the "idea" vs. "execution" argument. I bet that there are other nearly perfect clones of Tumblr in China yet this one has risen to the top. I'm sure Kai-Fu Lee is looking beyond the ideas and at teams behind them.
Cloning might not be the most ethical way of building a product but clearly DianDian identified a market that wasn't being served in China and had the ability to bring a product to that market.
I love that the discussion of cloning was happening on "Zhihu, a clone of Quora".
In general cloning is pretty bad. If I ripped off a popular iphone app, threw it on the app store, I'd be dilution the profit of the original creators and confusing users. I profit at everyone else's expense.
But there is a pretty good chance that Tumblr and Quora will soon be blocked in China. (All it takes is one blurb by one user on a sensitive issue, which is how Posterous and blogspot got blocked).
So if we assumed that
1) A product like Tumblr creates value for it's users
2) Tumblr will never be able to profit from China without the government/network connections
then cloning Tumblr seems like a win win scenario for everyone involved.
If doing a startup is about creating something users want(that doesn't exist yet or is not accessible for whatever reason), and the spirit of startups is to do things as efficiently and cheaply as possible, then isn't Diandian(the Tumblr clone) doing exactly what they are suppose to?
Disclaimer:
I founded a startup in Beijing a few months ago, and actually received seed funding from Kaifu's Innovation Works. I don't work for them, nor am I trying to defend anyone's actions(Come on guys... even the ICONS?). Just offering a different perspective from the other side of the the great firewall of China. ^^
Look, if you want do a Tumblr-like startup, sure by all means go ahead. But why do you have to clone the original website?
Competition is good. Friendster begets Myspace begets Facebook. When Facebook was first launched in 2004, do you think people say,"Another Myspace clone."? No, they say, "Another Mysapce-like startup."
I'm kind of surprised that anyone is actually surprised or offended by this kind of stuff. The US would be a backwater farming colony if it hadn't wholesale stolen the technologies that allowed New England to compete in the textile industry. That is only the most obvious example.
Tumblr's not alone -- Innovation Works also has a pretty decent copy of my last start-up, Flurry, called Umeng. (For the curious, compare the product at flurry.com and umeng.com.) I've been watching Umeng for a bit and the services have slightly diverged, presumably because Umeng's learnt a bit more about the Chinese market and adapted its product. But the initial product was just a straight-up clone.
I am a little surprised to see this from as respected a person as Kai-Fu Lee, who I'd expect to be innovating, but you just have to shrug. This sort of thing happens in business, and it's not worth getting too excited about.
Well, we can just about write off inovation in China. If a heavy weight like Lee, who has worked in Silicon Valley for 2 decades and named his incubator Innovation Works, is cloning Silicon Valley startups shamelessly, what hope is there?
Why is Google mentioned in the headline? They have nothing to do with this story. Might as well list all of the schools this guy attended in the headline as well.
101 comments
[ 2.8 ms ] story [ 185 ms ] threadI hope this means that all startups take the internationalization seriously from the beginning. Hopefully we can get some sort of solid services / startups / processes that can help internationalize companies much earlier on.
The current crop of localization services are frankly inadequate.
There's a difference between ideas and the expression of those ideas; that's why patent and copyright are separate. What's being complained about here goes beyond copying ideas, into copying expression.
But blatant copying?! Even the UI?! C'mon Kai-fu, I'm sure Innovation Work can do better than that. The whole purpose of Innovation Work (which is itself a copy of YC, for those of you who don't know) is to spur entrepreneurialism in the region, but all I see is setting up a very bad example. I can't imagine how the founders feel OWNERSHIP in their startups. It's more like a gold rush.
Disappointment aside, though, this strategy works. Take something that works, and apply to the China market. Why reinvent the wheel? But I'd argue that they should do a better job with "copying" -- you don't really want to invite criticism for no gain, unless the blatantness of copying is part of the strategy (to show investors that they literally and successfully cut-and-paste working startup businesses, like an assembly line).
Hmm, now that I think about it, perhaps that's the whole point.
http://arstechnica.com/microsoft/news/2005/09/1106.ars
1. The Japanese Way - Innovate By Leapfrogging. 2. The Indian Way - Innovate By Piggybacking. 3. The Chinese Way - Innovate By Copying.
Looking at how things have been over the years, China isn't going to stop a strategy that has worked across industries.
probably this paper?( by the Lemelson-MIT program - warning pdf) http://web.mit.edu/invent/n-pressreleases/downloads/sustaina...
"Innovation to help achieve the goals of sustainable development can start in many ways, including: “copy-catting” (i.e. Japan, Korea and China first mimicking manufacturing techniques and then becoming world leaders.); “piggy-backing” (i.e. India performing service work for rich countries and adapting information technology to local needs); and “leap-frogging” (skipping over technologies that are inappropriate in a given place and time and adopting more sustainable solutions).
....................
“Copycats” imitate ideas, technologies and techniques from other countries and improve and adapt them. During its first few decades, the United States took the key secrets of the Industrial Revolution from England, Scotland and France and launched its own industrial economy. Two centuries later, Japan and then Korea developed by adapting American manufacturing, raising the quality and lowering costs. These days, China is doing it with much success, moving up the innovation ladder at a rapid rate.
“Piggybackers” ride on the backs of rich nations by doing more and more of their manufacturing and service work at far lower costs. India is practicing the art of piggybacking right now, using advanced computing and communications technologies to perform software development, tele-services, and even high-level innovation at a fraction of the labor costs compared to performing the same jobs in the United States or Western Europe. A recent study showed that one in ten U.S. software jobs will be exported to places like India and China over the next five years.
Finally, “leapfrogs” skip over inappropriate technologies and embrace new ones, such as Finland’s sudden break from Soviet domination and its rapid adoption and development of new inventions like wireless networks.
"
I do agree though that the American way is basically to do whatever you need to make a good profit, be it coming up with the next great product (the iPod), ride along with a great product (the companies that make iPod docks/sleeves/cables/whatever), or copy a great product (Zune, and didn't that turn out well?). I just think the American copies are slightly more ethical than some of the Chinese ones.
http://fan.renren.it/a/ITxinwen/hulianwang/20110325/79864.ht...
On the Tumblr monetization front, TheStartupist[1] covers a good portion of their story. Checking Crunchbase[2] shows that they've gone through pretty large funding rounds, with their last one (D) at $30M the largest. I've been trolling Tumblr for the last year and half, and the only things I've been able to scrounge are the $9 Directory listing under your category of choice and the premium themes.
They're still growing massively, as all the cool kids congregate there to post their Instagram-faded pics of teenage angst, but are hemorrhaging money like Twitter. And like Twitter, advertising is viewed as pure evil[3] and not a viable solution to generate revenue. Twitter realized the inevitable and started Promoted Tweets recently, and Tumblr will have to do something similar soon as well. Maybe they make enough from the themes, but that seems a little quixotic.
[1]: http://thestartupist.com/2011/01/the-hypothetical-monetizati...
[2]: http://www.crunchbase.com/company/tumblr
[3]: http://latimesblogs.latimes.com/technology/2010/04/tumblr-ad...
What will happen if China and the US reach some kind of agreement, and unlocking online US-services will be part of it?
AND when cloning physical goods (like phones, cars, clothes, shoes, whatever) -- you can export them, since people are willing to pay lower prices for clones. How can you export a Tumblr or a Twitter clone, when both are freemium?
How are these clones surviving? Do they generate revenue, when Tumblr, Twitter and Facebook can barely do it?
Something is not right about this picture ;)
If China and the US reach some kind of agreement - and the services were unlocked - there would already be enough of a market share for the existing clones to maintain control over that market. Future clones would still have a chance in succeeding as well depending on the race to localisation of the products in the local language and demographics.
I'm sure they will figure it out eventually, I'm just unsure whether they are going to have an easier time then this chinese clone(at least to the point where they will be pointing and laughing).
Lets not forget that tumblr has spent millions of dollars and years coming up with the mix of what makes tumblr work and it has been essentially copied wholesale, if this ends up working in a chinese market, thats a huge competitive advantage for the chinese clone, because they didn't have to spend any of that money or resources to begin with.
http://aodaren.com/copy-works
http://www.businessinsider.com/what-do-ebay-facebook-and-gro...
I visited Berlin a while back and my buddy was telling me about a bunch of guys who've built a successful business (dozens of engineers) just cloning 'hot' American products.
It's got to reduce the number of people working on brand new ideas. (I'm not suggesting that you can't build a great business by copying somebody else's work, but you won't build a world-changing, super innovative company doing so)
We even think about moving to the US, but as a foreigner it's also not "easy" (well, noone said it would be easy to start something on your own - but you get what I mean)
According to Inc., "Norway has more entrepreneurs per capita than the United States":
http://www.inc.com/magazine/20110201/in-norway-start-ups-say...
(Disclosure: I am indeed Norwegian.)
I think the more interesting question is how to create the next Google or Facebook outside the US.
We do have a bit more middle-class companies, or at least so it seems. As with almost everything, the US is more about extremes than Europe.
(No, I'm not taking a position on whether that's a good idea. I am not an economist, and I try not to play one on the Net.)
(Not really an economist either, although I do have a little training in the area..)
1) 20k minimum for startups
You're confusing a few things here. The costs to form a company depend on what kind of legal form you want it to have. What you're talking about is the GmbH (basically a LLC), where you actually need 25k of capital. This is by far not the only form a company can take. If you just want to make sure that every founder gets its part, you've got a name for the company etc, you can form something like a UG. If you don't have more than three founders, you can use some standard forms and everything's done within a few days at most. And even if you want limited liability and don't have the capital, you can choose from several other legal forms available in Europe. The British limited company is quite popular, as you need less capital.
This is hardly a problem for most IT-based startups, who rarely have a lot of founders or actually trade something (where limited liability is quite welcome).
2) Diplomas/certificates are required
There are several cases where this is true, but I don't see any that would affect startups. Yes, if you want to become a hairdresser or want to open your own carpentry shop, you need to have the proper papers. For a web-based startup? What kind of papers would those be?
3) 35 hrs/week
That's France. Never mind that the difference between a regular job and startup hours doesn't have to be that different. And even if you're doing the stereotypical 100+ hours a week, the difference to a regular job in any country will be quite high (well, South Korea excluded).
4) Less hunger because of welfare
Hows is that particular to startups? If this were true, people would drop out of almost any job because it would be easier otherwise. Germans on the dole don't live in limitless luxury.
I'm not saying that there isn't a tendency to copy things here. The whole Facebook vs. StudiVZ affair is pretty embarassing. But that's basically one market niche some companies are filling, it's not really representative of the whole German startup scene.
Yes, there's no equivalent to the venture capital-backed silicon valley startup scene. But that's pretty unique in the US, too.
But yes, it seems to hover around 40 hours for most countries. Strangely even for France, where this is bordering on the illegal... Found an old page where the Brits are complaining that they're working more than the average, don't know how they filtered the results to get to that conclusion. The Swiss do seem to live up to their industrious stereotype, though...
Never heard about a 35+ pay hike in Germany, though. Considering that there's no minimum hourly wage and most people are paid fixed salaries anyway, this wouldn't even get you very much. Sounds more like a result of collective bargaining than a federal law.
[1]: http://epp.eurostat.ec.europa.eu/portal/page/portal/product_...
You don't have to watch Fox News to know that Europe puts more obstacles in the way of entrepreneurs.
As someone living in Canada, I can't tell you how frustrating it is to see great companies not servicing their neighbors to the North. Examples: Amazon Mechanical Turk, Google Checkout, Google Voice, Braintree, WePay.
They never seem to copy the whole experience as a whole, as it seems to be with Chinese ones - but useful bits here and there.
On the other hand, when they don't copy they are accused of that anyway because for some reason Russians value precedence in tech highly.
In all the world the problem seems to boil down to: If there is a business model that works and the niche is vacant in their market, why innovate?
Also, there's a special place in hell for people who can't just come out and call a clone a clone.
Are you questioning the meaning of this phrase or its applicability? If the former, then it is a reference to Dante's The Divine Comedy. If the latter, then in The Inferno, there is a special place reserved for thieves and betrayers. In a way, if you are a hacker and you blatantly rip-off the work of another member of the community, you are betraying said community. So the innermost circle of hell is reserved for you with Brutus, Cassius and Judus.
Wikipedia: "The traitors [who are suffering in the deepest circle of Hell - me] are distinguished from the "merely" fraudulent in that their acts involve betraying a special relationship of some kind. There are four concentric zones (or "rounds") of traitors, corresponding, in order of seriousness, to betrayal of family ties, betrayal of community ties, betrayal of guests, and betrayal of liege lords. (...) the traitors are frozen in a lake of ice known as Cocytus, with each group encased in ice to progressively greater depths."
http://news.ycombinator.net/item?id=2446316
Cloning might not be the most ethical way of building a product but clearly DianDian identified a market that wasn't being served in China and had the ability to bring a product to that market.
I love that the discussion of cloning was happening on "Zhihu, a clone of Quora".
But there is a pretty good chance that Tumblr and Quora will soon be blocked in China. (All it takes is one blurb by one user on a sensitive issue, which is how Posterous and blogspot got blocked).
So if we assumed that
1) A product like Tumblr creates value for it's users 2) Tumblr will never be able to profit from China without the government/network connections
then cloning Tumblr seems like a win win scenario for everyone involved.
If doing a startup is about creating something users want(that doesn't exist yet or is not accessible for whatever reason), and the spirit of startups is to do things as efficiently and cheaply as possible, then isn't Diandian(the Tumblr clone) doing exactly what they are suppose to?
Disclaimer: I founded a startup in Beijing a few months ago, and actually received seed funding from Kaifu's Innovation Works. I don't work for them, nor am I trying to defend anyone's actions(Come on guys... even the ICONS?). Just offering a different perspective from the other side of the the great firewall of China. ^^
Look, if you want do a Tumblr-like startup, sure by all means go ahead. But why do you have to clone the original website?
Competition is good. Friendster begets Myspace begets Facebook. When Facebook was first launched in 2004, do you think people say,"Another Myspace clone."? No, they say, "Another Mysapce-like startup."
I am a little surprised to see this from as respected a person as Kai-Fu Lee, who I'd expect to be innovating, but you just have to shrug. This sort of thing happens in business, and it's not worth getting too excited about.