What To Do When Your Product Gets Copied

All right, here's what you should do when your product gets copied. So I thought this would be a fun conversation because literally over the weekend, one of our customers who is with a subsidiary called a large Indian subsidiary company, they said, hey, isn't this your product? And we looked at it, I'm like, oh, son of a bee.

So India company copied you or some India company told you about it?

No, India company told me about it.

Got it.

It's some American that works for an Indian company. They saw it, they were like working on the weekend. And then so I was sitting on my couch, It's like 7:34 PM. I was sitting on my couch watching anime, right, on Saturday. And the CTO messages me. He's like, oh, this is our first copycat. And the moment I looked at that, my blood started boiling, right? And I was like, and I looked at it and the video, it's still, it's so well done. And the funny thing is the UI looks exactly like ours, right? They have a lot more features. They're a lot more feature complete, I would say, than we are. But basically 5 minutes after I got pissed, I was like, this is nice because We can, we can go into it, but it's not like we're going to copy their product roadmap. It's like more so it galvanizes us and it galvanizes my team and motivates us to push even harder.

At first you were pissed. I'm assuming you felt some sort of flattery after a while being like, all right, like you said, you guys are on the right path. And eventually if you're doing the right thing, you will get copycats. But did you hear the Travis Kalanick speech about Uber and all the copycats out of Asia?

Yeah, that he— well, I know that he respects them.

What ended up happening was you see a lot of competitors that just start copying you, and as you add more features, they start copying you and they keep adding more features. And what he broke down with Uber and what he saw was after a while, they've copied everything that you've released, And then they start innovating and adding features that you don't have. And I'm not saying—

That's China, that's China, yeah.

And I'm not saying that's what's going to happen to you, but if you do something well, in theory, people will copy and eventually it'll go from them copying. If they keep executing at a very fast pace, they'll go from innovating.

Yep. Yeah. And by the way, I respect them for copying. I don't think there's— I think a lot of people copy each other all the time. You look at Zuck with stories. I mean, he's copied a lot, right? And it's worked out. What matters more is distribution and data at the end of the day.

Yes.

And I think what matters more than anything right now is speed and execution. But net-net, I think this is a good thing because to your point, it does validate what we're doing. And it's interesting because they started copying immediately after they saw my LinkedIn post go well in November, that LinkedIn post where I shared one of our features and it got 1,400 comments on it and everyone wanted access. And I said, you know, nobody's doing this. And I got like 700 likes or so. So they started working on that immediately. And I remember them commenting on the post as well. And so I think they certainly have advantages, which I'm happy to list. And I also think we have advantages too. But I think what matters at the end of the day is you're focusing on your game and you're not worried about them because whatever they're going to do, they're going to do at the end of the day. So I'm happy to talk about the advantages, the disadvantages on both sides and where we go from here.

Yeah. I just remember the Jeff Bezos quote, don't obsess about your competitors, obsess about your customers.

Yeah.

And I remember Patrick Campbell had a good post. I don't know when it was, maybe a year or two ago, that was saying Jeff Bezos is wrong. You need to obsess about your competitors as well. And I agree with Patrick. I can't speak for Patrick, but I myself am not rich like Jeff Bezos. But I believe if you ignore your competitors, You're going to be screwed in the long run. It's like if Zuck never added stories, he would have really been screwed.

I think the paraphrasing around Bezos was that pay attention to them, but don't obsess over them is what he said. So I think you obsess over your business more than you do over your competitors.

You are right. I do obsess about my business way more than the competitors, but I keep track of my competitors on a weekly basis. Yeah.

You should always Keep an eye on them, but they shouldn't be the main thing.

Correct.

Yeah. So we're on that page now. Look, here's what I'll say. If someone copies you, I mean, they say imitation is the most sincere form of flattery. So that's what you're quoting. But on our end, you know, we look at the competitor. One, they're first-time founders. Not to say we're going to underestimate them, but they're first-time founders. They have raised the money. They've raised a couple million, a couple million bucks. And, you know, they do have about 30 people dedicated and focused on this, right?

So are they in India?

They're in Europe. And that could be an advantage or a disadvantage the way you see it, because people make fun of Europe the way they do business, because they're regulations all day, right? They're a little slower. But I do think they have those advantages, and I do think they're more feature complete than we are. And, you know, they started about 2023 or so. Now, where I think we have an advantage is my CTO is not a first-time founder. I'm not a first-time founder. I do think that when it comes to the You know, having some distribution in the space, like being known, I think we have the advantage there. And then I think the third thing too is the agency actually serves, in my opinion, as an advantage too. Because when it comes to actually, when we talk to a lot of our customers, they need a lot of customer success. They need people that understand marketing and our team actually does that. So there are advantages and disadvantages. But again, like I, there's always going to be trade-offs for everything. And I think more than anything, You know, galvanizing again. I keep using that word galvanizing. Getting with my team, I was like, guys, you know what's amazing? They're in all hands. I was like, we have someone that copied us, and you know what? We're gonna have to kill them. And it's funny because the moment my CTO texted me that, I'm like, you know, I'll be honest, like, I would copy us. Why not?

Yeah.

I was like, unfortunately, you know, Sean, Sean said— I was like, Sean, we're going to have to kill them. We have no other choice. We have to kill them. And no, not saying we have to kill them as people, but we have to We have to do what we can to destroy them. It's unfortunate, but we have to.

I also think the market's big enough where you can exist and they can exist.

But you know why I'm saying this, right? Because I'm reading the Nvidia way right now. And back in the day when they used to partner with Intel, Nvidia partnered with Intel. At a certain point, Intel started to copy them and they started coming up with gaming chips too. And then Jensen was like, oh, kill Intel. So the motto was kill Intel for a couple of years or so. And then people that worked at Nvidia for a while, they're like, yeah, it really motivated them. And they would go to bed thinking kill Intel. They like work until 11 or 12 AM, right? 11 PM or 12 AM. And they wake up the next— go to sleep thinking to kill Intel. They wake up thinking kill Intel. And what happened? They, they, they did. They didn't kill Intel. They did hurt them pretty badly.

Well, Intel's had a few ups and downs and people forget about this. Nvidia isn't the booming— for the majority of its life has not been the booming company that we're seeing today.

They have almost died many times.

And Nvidia did well from gaming. I believe that was their core business. Am I inaccurate on that one?

It started with gaming, but I have— there's way more that builds on that. I can— I'll tell you the story if you want later.

So they started getting into some other areas, it sounds like. I don't know too much about Nvidia's background.

Let me give you a little bit. Yeah, go for it. Okay, so they started in gaming, and this is why I know them so well. And they, back in the day, they would compete with like companies like 3dfx, and these people were well more capitalized.

Voodoo and all that.

Voodoo, you remember that? Yeah, yeah. Um, ATI and all these companies, right? Um, so what ended up happening was people started— scientists started using their cards and other people did because they were way cheaper than these other supercomputers out there. What ended up happening, they saw, was that because if you wanted to, you know, do all these complicated, complicated calculations for like proteins or like other stuff around science, you would have to make use of the GPUs on the video cards. And the GPUs would actually take on the calculations instead of the CPU. So it would free up the CPU and then you would actually end up being able to do a lot more. So Nvidia saw this and they're like, oh, we actually need to make this a lot more programmable for, for the general public instead of just gaming. And that's how they started expanding into other areas. So they actually stumbled into this based on market feedback, and that's how they became who they are today. Um, and they almost died many times along the way.

And then OpenAI, yeah, started using their chips.

Yeah.

Was their chips originally built for AI?

No.

When OpenAI bought them or Microsoft or whoever?

They— I think 10 years ago he already made the AI bet. He started seeing deep learning and all that, and they're like, oh, we need to— because we see this working for science and everything, we should bring this over to AI. And they continued to make this CUDA architecture— was what they call it— they continue to make it more programmable for people to modify their chips for whatever it is that they're trying to do. And that's how they got to where they are.

How many years? Like 10 years before?

10+ years. And the board would— because their stock was going out, they dropped like 80% or whatever— and their board was like, dude, we don't think you're making the right bet. And Jensen's like, nope. This is what it is, this is what it is, this is what it is. And he stuck through it for 10 years. And he could have been fired by the board, but he stuck with it and it paid off.

That's awesome. It's just a lot of those long-term bets. This is also why I hate the concept of being publicly traded, because you got to deal with people and shareholders who are all about what's going to be your quarterly earnings.

And so, by the way, that's why I say it's an advantage for us to not have funding, because they need to report. If you're a first-time founder, you're going to listen to everyone around you. And they have so many people that are influencing them. Whereas we're just focused on our vision. And, um, look, it took them 2 years to find something. All of a sudden they copy us for 4 months. They were a little, a bit reactive. So I'm like, oh, if that's your personality, um, and then if you're going to react to everything around you, that's going to make it tough to focus. So we'll see what happens though. All right. So I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital. And they work with a whole host of global companies or global organization. Also, Neil has SEO tools such as Ubersuggest and Answer All you have to do is go to npdigital.com to learn more, and we'll see you on the other side.

Back in the day when I had the startup Kissmetrics, which you remember, there was a company called Mixpanel that came out and they copied some of the designs early on. Uh, Mixpanel—

because you guys were one of the leaders before Mixpanel.

Uh-huh. Mixpanel ended up beating us. I don't know how well they're doing now, but they beat Kissmetrics. They generated more revenue. We had way more traffic. We had more brand presence. But they had the most important thing. They had more revenue and lower churn. Going after different markets, we focused mainly on marketers. I believe they focused more on product people and engineers. But one thing that I learned from that, because Heath and I, my co-founder of Kissmetrics at the time, we were serial entrepreneurs. The thing that Mixpanel did well that we didn't that caused them to win, they bet on mobile. Before mobile was big and we did not. We did end up betting on mobile, but we bet on mobile when everyone already knew that it was going to take off.

We were late to the game. You know what's interesting? Hiten, I remember him back in the— this is like 10+ years ago when mobile was taking off. He, I think there's a video or something of him going like, this is the future. This is everything, right? So I don't know if that coincided with, if that was before or after, but it seemed like he already knew that mobile was the future.

He may have knew mobile is the future. Hiten's really good at spotting trends. We just didn't make our app focus on mobile experience. I'm not talking about people loading up our app, but actually tracking all the mobile apps. And at that time, people even had quote unquote mobile sites instead of responsive. And we were just missing that segment.

Yeah.

But it caused Mixpanel to grow at a hockey stick and not us. Plus we had the litigation/lawsuit over data privacy. Won the— no, we won the— we passed the FTC investigation. We settled the class action lawsuit because to fight it would have cost more in legal fees than just pay $50 grand out of our pocket. Because we're also paying the legal fees every single month. And our insurance policy was like, they want $500 settlement. If you give $50 grand, we'll give $450. We're like, uh, and then we looked at the math on how much we're spending. Everyone's like, wait, this is cheaper than trying to say we won the case. Here's the $50 grand. And I learned that business lesson from my investors. They're like, you got to be logical and not emotional in a lot of business decisions.

Let me ask you, so if you can go back in time with Kissmetrics, knowing what you know today, would you have taken investor money or would you just have bootstrapped it?

I would have taken investor money.

Okay. And explain to people why you would, you still knowing what you know.

The circumstance was a little bit different because back then I didn't have as much cash. If you're telling me if I'm starting a business today, would I take investor money or not? Today I would not.

Yeah.

Ethan has taken investor money. His latest company sold to Dropbox. He was my other co-founder, and we did most of our startups together. Um, you know, when we, when, when I look at, um, when I look at, starting things up, unless you have something that you know is gaining tons of traction and you need money to grow faster, that's when I'm okay to take money. But before, I would take money because I needed it to get something off the ground. Keep in mind, things are way cheaper to do now.

Mm-hmm.

Because of cloud and all that kind of stuff. But I would focus on raising money to scale, not raising money to Get it off the ground. Correct.

Yeah.

So it's just like, you're— Kara's a great example. You raise no money, you have cash flow from your agency, plus you have good savings and you have investments and stuff that you can tap into if you wanted to. If you knew that a customer would stick with you for 7 years, but it would cost 2 years to get the customer, then I would say go get $10, $20 million and spend it. Go all in. Exactly. It makes sense at that point because you need it to scale faster. While as an individual, I'm not saying you can't float it, but there's a point where it's going to get super expensive. And if you really want to beat the competition, that's when you're just like, wait, we got a winning formula. You spend as much to make that winning formula scale.

I think people try to raise too quickly because they think it's the right thing to do. But I think the right, the right time to do it is when you have a formula that's already working. It's a mathematical formula, right?

Yes.

And you want to bet on it. Do you, do you believe in the founders? Do you believe in the formula? If you do, then you bet. Anyway, that's it, guys. Please don't forget to rate, view, subscribe. It helps us grow, and we will see you later.