Are the Samwers going public? Who cares

By Sarah Lacy , written on January 6, 2013

From The News Desk

Saturday, I saw some rumors float through my Tweet stream that Rocket Internet, the shameless clone-ubator of the Samwer brothers, is gearing up to go public. This effusive report of the so-far unconfirmed news gushed about the "shockwaves" it would send through the startup world and what a big deal it is.

It won't, and it's not.

Even a year ago, the most powerful startups in the Valley rushed to get international, lest the Samwers clone them and steal international market share. They were seen as shameless extortionists with clones that stole the exact look and feel of Western companies, ripped of the names frequently ("Pinspire") and frequently ripped off the very code of those original sites.

Have they made money with this? Yes. But mostly because companies like Groupon were growing at breakneck speed by whatever means necessary and bought them out, putting them in charge of their international operations.

A year later, and they are still seen as shameless. But they no longer strike fear in entrepreneurs' hearts. Today, many entrepreneurs simply see this shameless approach for what it is: Recent clone attempts like ripoffs of Fab and Airbnb have floundered, and Groupon's international division -- architected and run by the Samwers -- turned out to be one of the very worst run parts of the business, an albatross weighing the company down even more than the slowing core business.

Because the Samwers have swashbuckled their way into South East Asia with cash to spend, I have friends from emerging markets who like to make a lot of excuses for them. We've seen something similar with Facebook "co-founder" Eduardo Saverin, who is also trying to buy entrepreneurial respect in Southeast Asia.

Could these places use some angel money? Sure. But the real benefit of angel money isn't cash. It's mentorship and credibility -- neither of which the Samwers can offer. It doesn't matter how well the IPO does or how much more cash it has. Real entrepreneurs will never respect the Samwer Brothers.

All weekend I was trying to come up with an articulation of why the Valley is so different -- why the Samwers' approach is considered so, well, unseemly here. I guess it boils down to pride. Even many of the apps and social sites that people bitch about not being significant enough are at least new sites that were created by someone. They may not always be a new idea -- after all Google wasn't the first to do search, nor was Facebook the first to create a social network. But those entrepreneurs made the ideas their own.

There's a blending of art and science that's at the heart of most waves of Silicon Valley -- even dating back to the far more technical days of Fairchild Semiconductor. Back then, there were local versions of the Samwers -- people who actually walked out with Fairchild's trade secrets and set up competing companies. Sometimes they lost lawsuits; sometimes they just failed because the semiconductor industry required constant innovation, and thieves can't innovate.

There's a certain degree of social pressure here to at least build your own company. Maybe it's silly. Maybe it's insignificant. Maybe it'll fail. But stealing color palates, names, and code -- well, there's just not any room for that. I'm sure people try it. But they'll likely leave, because no one will fund them or work for them. There are too many people trying to create -- even people who aren't very good at it will crowd out the ones who just want to make a quick buck relatively efficiently.

Earlier tonight an unlikely source provided a good articulation for the type of creative spirit that has driven Silicon Valley for the last 50 years. Oddly enough, that source was "60 Minutes" -- not exactly a bastion of tech reporting.

In this week's show, Charlie Rose has a great segment about the life and accomplishments of David Kelley, founder of Ideo and at Stanford, the Hasso Plattner Institute of Design. While most people watching the show will no doubt obsess about Kelley's powerful remembrances of Steve Jobs, what has driven him since his youth as a creator was more impactful to me.

Kelley grew up as a tinkerer, or as we call it today, a hacker. Just like Robert Noyce, Steve Jobs, and so many others who left their indelible marks on the Valley. He designs out of "an empathy for the user" -- putting that value above all others. And more to the point, he and his firm Ideo have designed everything from the airplane bathroom vacancy signs to features on the TiVo remote control to the first Apple mouse. And yet, it's never rung the opening bell at the Nasdaq. People there design and create for the love of it. People like Kelley may not be the household name that Mark Zuckeberg is, but they're a core part of the fabric of this ecosystem.

While all of Silicon Valley may not be that pure in intention, that creative spirit is almost always somewhere in there, guiding most great companies we cover. Even the ones that don't particularly sound like great ideas or solutions to a real problem.

That's something the Samwer brothers -- or those short-term in focus enough to worship them simply because they're rich -- will never understand. They can fail or they can luck into some money somewhere. But in the grand scheme of entrepreneurship, they'll be insignificant. You simply can't get something truly great and lasting out of nothing.

There are so many reasons I tell municipal governments their wide-eyed plans to "build the next Silicon Valley" are naive. Most of these have to do with an overly short term plan, scant resources, or an overly meddling role of the government. But far worse is anchoring a region's startup culture on worshipping soulless rip-off artists with nothing more to offer than cash.

I've been lucky enough to interview Kelley -- and others at Ideo -- a few times over my 15 years as a reporter. He's the very articulation of the creative spirit that drives this place -- that has little to do with cash or shortcuts and out survives the mercenaries every time. As Silicon Valley becomes inherently more creative, design focused, and inter-disciplinary, he could be seen as a modern Fred Terman, teaching Stanford's best and brightest how to collaborate and create.

Go here for the full video of Charlie Rose's interview with David Kelley. Highly, highly recommended.