Rocket, taking entrepeneurship to new hights

Lately, I’ve heard lots of people talking about Rocket. I dare say most were not thrilled by what they are doing. Yet, this does not mean that there is nothing to learn/profit from them.

For those of you that don’t know Rocket, this is my understanding: Rocket is a company founded in Germany that has specialized in copycatting successful business models.

They build very capable teams on the ground, in several countries, waiting for the Go Ahead on a business model.  Once a model is identified, it is implemented in several countries at an amazing speed in order to be sold to the incumbent.

They’ve done it with Groupon and are doing with Zappos, Air B’n’B and others.

Yet, lately, they decided to enter the US with their AirB’n’B copy (Windu), effectively changing their strategy of developing international operations and rather becoming a competitor. This sparked a slew of complaints in the valley and elsewhere.

Despite of all the controversy regarding the copycatting, there are a two interesting things to learn from them: 1 – Recruiting is Key ; 2 – speed of roll out.

1-   Rocket spares no effort in recruiting top people. They even do so by tapping into unusual pools of talents for start-ups such as McKinsey and BCG.  As they are focusing on the management and roll out rather than the innovations, these guys are great picks.

They take the approach of getting the best people on the team, regardless of the cost. In doing so, they are paying very high salaries for start-ups in order to have the needed talent available but they are also drawing a very qualified crowd, which would otherwise lead a corporate life, into the startup scene.

After these people have they tried a startup, it is hard for them to go back to the corporate life. They will most likely join a venture where they can get more of the equity.

In a country with few qualified entrepreneurs, as Brazil, people with McKinsey/BCG experience as well as a few years in a very aggressive startup environment as Rocket, makes for very good founders.

I thank Rocket for enriching the community.

2-   Quick is not enough! – That is a super learning from rocket. No company will have the time to dominate the local market and then move globally.  Once your model is proven, you have to go global immediately or risks having a copycat take all your international markets.

This effectively means that companies will become bigger and more complex at much faster rates than seen before. They will also demand more funding early on their expansion process.

Moreover, a different type of skill set will be needed to scale these companies up at this speed.  This time the industry can copycat Rocket and learn with their experience.

What makes this an interesting topic is that the start-ups themselves will not have the time to learn this from Rocket and iterate. This will have to be brought in by someone who has done the scale up multiple times: the VCs.  How VCs will do it… to be seen… but the task, no doubt, will be left to them.


Author: Rodrigo

A VC trying to help build up the industry Principal @ Redpoint eventures doing Seed and Series A investments in Brazil

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