The Imitator’s Dilemma: Top Five Ways to Make Money Out of Other Firms’ Innovations

Steve Jobs often says that Microsoft stole Windows from Apple. Well, Apple stole the mouse and window-based GUI from Palo Alto Research Center (PARC). And since Apple is not such a big innovator that it claims to be here’s a list of 10 ideas Apple stole from Microsoft.

This article is about cases where an imitator has done much better than the innovator. This phenomenon has happened quite often. Here is a list of top five ways to imitate and beat innovators:

1. Timing: most important factor that works in favor of the imitator. Yes, an innovation brought to market too soon can be bound to failure if the market is not ready to use it. Think of people who couldn’t work with Google Chrome because it didn’t work with Google Toolbar. Firms who have a better sense of timing can take advantage of their knowledge and bad timing from an innovator to introduce a stolen idea and make tons of money. The funniest thing is that most people won’t event notice the real innovator’s earlier introduction of the idea and think that the imitator is the innovator!
2. Partnership: This is Microsoft way of forcing its products into the market. It all started with shipping DOS in every IBM PC, and since the idea had so much success, it was used to push for Windows.
3. Price war: Copying an idea will require 75% of the same effort spent by the originator of the idea. So this leaves 25% of margin to fight a price war. Isn’t that great?
4. Reliability: this is the Japanese way of beating the American auto and electronics industry. If the imitator has an advantage in its manufacturing process or culture, then it can afford not to innovate but still be the leader in terms of market share, simply because it offers more reliable products.
5. Learn: being an imitator is a great opportunity for not making the same mistakes than innovators. The best example is when a feature or function is not very appreciated by users. The imitator can release a product that does not have those irritating features or simply does a task in a more efficient way.

Well, it seems that its better to be an imitator after all. If we take a look at Palo Alto Research Center, we’ll see that they have introduced some of the most important innovations of the last decades. The only thing is that they didn’t make a lot of money out of them…