Founded by in 2007 by three German brothers – Marc, Oliver and Alexander Samwer – their portfolio companies employ more than 30,000 people. Lead by Oliver (the middle brother), Rocket Internet is famous for its aggressive growth tactics, taking businesses from idea to billions of dollars in revenue in under three years. Because the Samwer brothers rarely give interviews, Rocket Internet has, for the most part, remained a mysterious figure in the business world.
The Hustle arranged an exclusive interview with one of their former employees, the ex-CEO of one of Rocket Internet’s most successfully cloned startups.
Alando, Rocket Internet’s eBay clone that sold was sold to eBay for $50 million after being in business for only 100 days. From day one, Ollie (Oliver, Rocket Internet’s CEO) knew he wanted to copy other companies. The Samwer brothers started CityDeals in 2010 and sold it to Groupon for $170 million just five months after starting the company. There are three levers we used to successfully clone a business and make it grow faster than the original: expand geography where the service or product is located, create a larger product offering, or lower the pricing to undercut the competitor. We’d say to ourselves, “We’re going to dominate this market then prove that we’re growing revenue 20% month over month.
After a few months we’d teach the local leaders to do the more technical stuff that Rocket’s Berlin headquarters were doing, like running Facebook and Google ads. Rocket Internet’s complicated company structure that shows its stake in dozens of companies.
Oliver Samwer, one of the three Samwer brothers who own the e-commerce building beast that is Rocket Internet isn’t interested in being part of a league of innovators. But the US is also the most saturated market for Internet business models and where Rocket copies most of its models from. Rocket takes proven models in different verticals, tests them, replicates them in different markets, drives the business growth aggressively and dominates everything — or tries to dominate everything. We are talking about businesses majorly in eCommerce, on-demand services and a few other verticals including logistics, classifieds, hotel booking, jobs listing and P2P lending.
According to this Bloomberg report, Rocket Internet has about 75 online startups and internet companies in 110 countries.
Because, (not my opinion), they are copycats, run an insensitive ship, and the method in their madness is itself, madness. Blitzkrieg; also called “lightning war” is a military tactic deployed by the Germans during WWII, designed to create disorganization among enemy forces. And what could be even more riling is that, Rocket’s goal for its companies is ultimately not profitability, but a buy out. The Samwers know this too and they agree that they may be the Tesla of startups; underappreciated geniuses.
Oliver Samwer said to Bloomberg in 2012: “I think the most admirable entrepreneurs are those with original ideas, ja?
In 2015, Rocket Internet suffered a nearly 200 million euro loss, which is the results of its start-ups' poor performances.
The goal is to turn three of Rocket Internet's companies into profitable businesses in 2017.

British supermarket chain Morrisons expanded its deal with Ocado Group, so that it can ramp up its online presence even more. Fashion label Hugo Boss decided to shut down another 20 stores worldwide after it had announced in March it would close 20 stores in China.
American online retailer Amazon presented its first cargo plane, the first of what should become a entire fleet. Online luxury retailer Yoox-Net-a-Porter managed a 16 % turnover increase in the first half of the year, while profit grew 15 % compared to last year. Part startup factory, part venture capital firm, the business strategy is to fund clones of Silicon Valley startups then grow them at lightning speed in European, South American, and Asian markets. This is due, in part, to their cutthroat hiring practices, a team of ex-bankers, and massive amounts of funding they pour into each venture.
But after seeing CityDeal’s incredible success, the Rocket Internet strategy was formalized. We knew about numbers and we were entrepreneurial but we didn’t know how to run a company.
Ollie would hold weekly group meetings on the phone where he’d ask all the CEOs to say their weekly numbers and growth. Most of the money went to hiring people and for Google and Facebook ads to quickly get customers. The only point of our companies was to make lots of revenue, raise lots of money, and sell it or go public. The leaders would sell them on the idea of how big the original company is and how a clone can be even bigger since we’d learn from their mistakes. They had this feeling like they have to make Germany great again, so they only care about building big companies.
The brothers founded Rocket Internet in 2007 to do two things; find proven internet business models and replicate them aggressively in pre-emerging markets. Although, Rocket currently operates in China via Wimdu (another airbnb spinoff) and Glossybox, the protectionist nature of the Chinese government make it difficult for a foreign company- especially a foreign internet company to thrive. In its lifetime, the company has been an investment company, a venture capital firm and an incubator, all at the same time. So many, I like to think, after getting their companies to break even, their next big problem will be naming all their new companies. Though the mothership is resident in Germany, they are in every continent asides North America.
Although, Rocket Internet is currently valued at EUR 8 billion,  its companies have not begun turning profits in the strictest sense of the word. Its investors are the brothers themselves through their investment firm, Global Founders Fund and Swiss investment firm, Kinnevik, United Internet, Philippine Long Distance Telephone Company, Len Blavatnik’s Access Industries and Holtzbrinck Ventures.
Right along their business description as the world’s largest internet startup incubator, is another description that basically says,  we are not innovators, we just build companies that other people have already built and drive their growth like crazed japanese warriors in a kamikaze drive. There are at least 15 companies including Groupon, Zappos and eBay that Rocket Internet has cloned in other markets. Should their properties in Nigeria for instance be appropriated and their companies regulated to death?

If there were no competitors, things would be very different now, but in our world, you have to reach a certain mass first, before you can stabilize costs", he said.
Some of its well-known businesses are HelloFresh, Lazada, Home24, while it is also partially responsible for Zalando's rise to fame. Once Rocket Internet dominates a market, they sell the startup to the company they cloned it from.
The first time was when they started an eBay clone and sold it back to eBay for ?35 million ($38,158,750 American dollars) within 100 days of launching the site.
He knew that type came from Goldman and other consultant firms, and that they had the pedigree that made it easier for him to raise money – every investor respected these employees because they had the same background. When Oliver found potential CEOs he’d bring them to Berlin and put them through a boot camp. Community- or technology-focused companies wouldn’t do because it takes too much time and customer trust to make a lot of money. If you didn’t hit your numbers or didn’t know your numbers he’d bash you so you were embarrassed. To sell them on the idea we’d tell them how much Amazon or Alibaba makes and how we’ll all get rich together.
They all have the same numerical skills (above average), and are always around 30-years-old or less.
Every two weeks, Rocket’s 300 CEOs around the globe would get this newsletter and we’d copy it.
Rocket listed 12 of its companies as proven winners in 2014, but these companies haven’t made any net profit. Their typical exit MO is to either flip a company outright or to take cash off the table by selling substantial shares in whatever venture, to institutional funds or companies.
Oliver Samwer admitted its start-ups failed to make a profit, despite huge investments from his company.
He’d find hungry people and be extremely hands-on, teaching them what worked and what didn’t. The Berlin headquarters helped us spend money on Facebook for the first month and set up the website. People from the office would also work in the warehouse if that meant getting products shipped faster. Some people call it a “clone factory” and the company constantly refers to itself as the “world’s largest technology incubator”. If Amazon slightly changed their cart image or moved it just two pixels to the left we’d know and copy it. He’d bash everyone in front of the rest of us and go country to country to publicly shame them.

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