This is cross posted from Habib Haddad’s blog
When the Chinese internet giant QQ released Fanfou a few years ago many criticized it as an obvious clone to twitter. The same again happened with the launch of Watwet the Jordanian startup. After all, at first glance the sites do look a lot like twitter. Maktoob, the company behind the Arab internet success story was always described as the Yahoo of the Middle East because of the very similar services it provided. It didn’t come much of a surprise when Yahoo actually acquired the company in 2009.
But is localizing an existing product or business idea imitation or art, and does that limit innovation or actually requires it?
There are mainly two types of innovations, incremental and transformational. Incremental innovations are improvements built on existing products that add benefit to the user. Suggested search in Google and Yahoo is an example, higher resolution on the new iPhone is another. Transformational innovation on the other hand is much more disruptive, it creates dramatical change in industries. Creation of the web, invention of the wheel and in my opinion the iPhone itself are all transformational innovations.
Smart localization would fall under incremental innovation and a number of web companies in the Middle East have been doing a good job at that. Baythas taken Monster.com model to the Middle East but was innovative in its business and sales approach that allowed it to flourish in a fragmented market. Maktoob was able to capture users by localizing Yahoo services by capitalizing on forum’s (Bulletin Board System) popularity in the Middle East and using its true understanding of the cultural intricacies. A good example of that is BentElHalal the matrimonial forum/service.
Twitter clones are good examples of how localization could be incremental innovations. In Japan, Digital Garage has partnered with Twitter to localize it but has taken a very innovative approach. In fact one might argue that Twitter Japan has been even more innovative that the original company with the earlier release of a mobile version and ad platform. Watwet has replicated Twitter in the Middle East but focused on the SMS by signing deals with operators to wave the charges. SMS GupShup in India has done an amazing job at that by quickly capturing 30 Million users and adding an SMS advertising platform.
The real problem however, is when it becomes a blunt copy paste . The copy paste approach is not only unethical, but does not offer a sustainable advantage and more seriously discourages innovation in the company or even country at large.
An example of a blunt copy paste is Biglion the russian clone of Groupon. The company went even to the point of ripping off the site’s design and navigation. In an emerging market like the Middle East, there still remains a lot of white space to fill. While a blunt copy paste is very tempting it that it’s important to not forget that it’s not only a bad business approach but also a recipe for suffocating innovation at large.
In my opinion, for localization to really work it does require some amount of innovation and art, and that’s where players like Maktoob and Bayt have been very successful at. But what we lack in the Middle East are transformational innovations and while signs of those still exist I am confident that as the “cost of failure” gets lowered, culturally and financially, that we’ll witness much more transformational innovations.
By Habib Haddad; habib AT YallaStartup DOT org, @habibh