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Summary:

In the age of IP concerns, is copying really that bad? Jack Jia of Baynote looks back through history, showing that humans’ ability to copy others has helped enable many of the innovations of ancient history, as well as the tech world today.

Roman legion soldiers

Roman legion soldiersI recently spoke at a CEO summit with a group of IT executives from Silicon Valley and China. Naturally many were concerned about the slowdown of Silicon Valley innovation as well as the copycatting and IP protection issues in China. I challenged the group to think about innovation in the bigger context of human civilization. Is tech innovation really slowing down, and is copying really that bad?

Innovation is 99 percent imitation with 1 percent differentiation

Humans won the battle of the species race. But why? Is it because we use tools, communicate with language or have a bigger brain? Scientists have recently discovered through advanced DNA mapping that we humans are humble enough to be willing to copy and build off each other’s knowledge. It was our ability to acquire collective intelligence that separated us from the rest of the hominids pack approximately 40,000 years ago.

Humans are the only species with a neocortex, the outer and most advanced layer of the brain. The neocortex is really a learning machine –- we observe cause-effect patterns in life, store them in the brain and predict the effect when the same cause appears again. Humans institutionalize this process in our first 12 to 16 years of our life –- we go to school and learn these patterns experienced by our ancestors.

Innovation comes from solving the new challenges we face and combining it with our knowledge of existing state-of-art technologies and paradigms. “Standing on the shoulders of giants” is the only motto for successful innovation, but too many entrepreneurs make the common mistake of inventing in a vacuum.

Our economy has always been global

Human civilization is a “learning” history across time and geographic regions. But if we had only lived in the Roman Empire in 50 B.C., we’d have thought Romans had invented everything. Halfway around the world, the Chinese of the Han Dynasty had the same thought. But the reality is that these distinct civilizations were never developed independently. From Egypt to Euphrates to Greeks to Romans, village after village and generation after generation, people migrated, copied and propagated their skills, knowledge and culture. If you have been to the 5000-year old archaeological site Sanxingdui in central China, you would think that you were visiting ancient Egypt or Greece.

The world economy was actually global even back then; it just wasn’t obvious to the people who lived at the time, because they were limited by their own human life span.

If Marco Polo could have traveled at light speed

What does this mean to modern humans? The Internet has changed the scale of distance and time. Where it took Marco Polo 30 years to propagate the know-how of making noodles, it now takes a web whiz kid only three weeks to get a similar idea around the world twice.

Just look at the example of Groupon, which broke the code of viral growth to promote local services, using stay-at-home moms as the social nucleus while combining the power of Internet and telesales. In two years, Groupon is at a $2.2 billion revenue runway and turned down $6 billion from Google and other high-profile offers.

The story doesn’t stop there. The rest of the world is copying the formula of this modern “spaghetti” and has started to make their versions of Groupon: European entrepreneurs have formed dozens of successful group buying sites. In China, there are over 1,000 clones — the no. 1 player being Lashou.com, which is breaking out in China, mirroring Groupon’s success in the US.

If you look closer at these local clones, their actual execution is quite different, much like spaghetti is not Chinese noodles. For example, Groupon credits its success to having a centralized call center for accessing small business owners in the top 100 US cities. But Bo Wu, the founder of Lashou.com, discovered that China is not “one country” after all. There are many regional dialects preventing Groupon-like telesales to work. There were also significant cultural differences that he needed to consider. For instance, while lamb chops are a best-selling food in Beijing, the Shanghainese view it as “barbarian” food. So Bo’s solution has been to deploy 100 local sales teams in the country’s top cities instead of a call center.

Action-driven collective intelligence

In the business world today, we still rely on collective intelligence to innovate albeit in more technology advanced ways — whether it be talking with an overseas partner on Skype or email, or learning what our customers are saying on Twitter. While you and I obviously can’t communicate directly to everyone on the web this way, what we can do is learn from their infinite collective implicit actions and experiences. The entire universe of humans makes billions — if not trillions — of silent “votes” each day as they navigate the web, but a very small percentage of these people are actually publishing their ideas. There’s a tremendous amount we can learn from their silent actions – not what they say on Twitter, but what they do when they see something they like. For example, if a GPS tracked device showed a restaurant was full, you wouldn’t need a Yelp review to guess the restaurant quality.

Another key difference of today’s web from ancient civilization is that we can connect contextually without being personal friends. If I am shopping for a 3-D LED TV, there are many people around the world who can help me on that decision.

This concept has huge implications for innovation. Imagine a world when these “contextual friends” start to invent things together!

Smart “copying” has been the core to the success of human civilization, and I predict that web-based collective intelligence will fuel the next frontier of innovation. By building on the successes of other entrepreneurs along with the implicit wisdom of all web users innovation is poised to reach new heights in the next decade.

Jack Jia is a founder and Chairman of Baynote, a leading software developer for recommendation engine. He is also a partner of GSR Ventures, a top China-focused technology VC. He is an angel investor, a board advisor for Santa Clara University, and the president of HYSTA, an organization that promotes entrepreneurship.

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Image courtesy of Flickr user Neil and Kathy Carey

  1. Interesting perspective. It’s always a good way to approach business if you use historical examples as often times there are a lot of parallels. community.blogupdates.net

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  2. Good thought, “innovation is 99 percent imitation with 1 percent differentiation” so, time goes by there will be a drastic change everything changes little by little.

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  3. I wonder how this author feels about plagiarism? It’s an intellectual exercise for him when a Chinese company copies an American firm, sure, but what about journalist copying each others articles – verbatim.

    I am sure that the author would have a problem then. Why? It’s all an idea; it’s all just progress right? I have a feeling that once you have some skin in the game, you begin to care – just like the author would care if journalists around the world copied and printed this piece without credit or consequence.

    In that context I find this article unenlightened.

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  4. “Humans are the only species with a neocortex . . .” Actually mammals in general have a neocortex–it’s just that the human neocortex is proportionately particularly large.

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  5. Human civilization is a “learning” history across time and geographic regions. But if we had only lived in the Roman Empire in 50 B.C., we’d have thought Romans had invented everything. Halfway around the world, the Chinese of the Han Dynasty had the same thought. Both of them wrong It is Indians who invented everything – go check Wikipedia Jack.

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    1. “Whatever” – you are exactly right, Indians would have thought that they invented everything much like what you are suggesting – so would the Persians, Egyptians and thousands of other major/minor/lost cultures. With the narrow views of our lifespan and cultural bias, we all thought we invented everything – BUT WE DIDN’T. The WORLD WAS FLAT the moment human race walked out of Africa. We learned and adapted from each other socially and biologically from day one in the form of cultural migration, education, physical traits and mental intelligence… Thanks to Internet, this age old learning process is now visible to all of us in real-time.

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  6. Throughout history when a road is built between regions we usually see economic and cultural growth. The Internet is connecting every last human with this last leg of the new roads. Get ready for billions of innovators.

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  7. “Innovation is 99 percent imitation with 1 percent differentiation”

    Yes, that is right. Everything new is just something forgotten. I think there is nothing bad in copying, other people’s thoughts are never redundant. =)

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  8. The Romans just showed you can be successful by just copying others’ ideas (and I guess that’s what you’re really saying). Success doesn’t mean innovation. Good ideas usually travel fast and far, but someone has to come up with an idea and that’s the most difficult part. as for copycats, call it “learning from others”, “perfecting an idea”, “adapting it to the masses” or whatever, just don’t call it innovation.

    The Roman empire began in 27 BC. It was a Republic before that. And no, people living in the near east in 50 BC didn’t think the Romans invented everything.

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    1. Kirsty, good catch – entrepreneurs are known for missing the details:) The Republic sounds a lot better. Thanks.

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  9. So the author is basically saying it is okay for chinese to steal ideas & technology from developed nations. The chinese are the most prolific stealers in the world. They steal everything from safety pin designs to fighter jets

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    1. Sanjay,

      Thank you for saying the unsaid. Stealing is a complete different human activity than copying. If the safety pin design is on the market without a patent protection – it is a fair game for anyone to copy. It would be a fool not to copy it if the pin is a great one… On the other end, we all know the meaning of stealing and it is not tolerated in any culture in any time in the human history! Period!!!

      In fact,copying was so universal that it was the West that invented “patents” and “copyrights” to reduce copying and encourage inventions. China’s famed illegal software copying has seriously impacted its software industry formation. The less promising news is that the current age old patent system is not really protecting the software and internet inventions. Anyone who has worked as a technology executive in the Silicon Valley would know that the patent portfolio is really a defensive strategy, meaning to sue back if you are sued. The only offensive strategy for a tech company is to innovate NON-STOP. It is about focusing on your R&D resource on that 1% differentiation day in and day out!

      BTW, it is very common for a developing country to copy a developed region – water will flow downwards as the old saying goes. China has clearly copied many things from the West in the last 20 years. But the reverse trend is starting in the area of manufacturing, semiconductor fabs, wireless, green tech, etc. where China starts to lead or have more critical needs.

      The bottom line is that world is flat and two ways. We need to think and act like global citizens.

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  10. Very good article.

    Many commentors here have equated copying and adopting to plagiarism. I believe that is a very narrow view of things. One example is architecture wtihin India. First the one kingdom had one type of architecture and when they conquered other kingdoms and got their architects, the temples started getting being influenced by not just one but two styles. When the Mughals from middle-east invaded India, some Hindu temples adopted the dome structures similar to mosques, while some mosques adopted temple-like structures. Nobody lost anything particularly copying certain styles. Well, some architects might have sure become jobless when some other architects could design buildings like them, but it happens in all industries.

    For example, seeing that weekly magazines are a money spinner might have prompted publishing houses to copy the model from another company may be a century ago. Similarly seeing what app works on the iphone and building a similar service for the android or what works on Mac could have a similar service on a Windows PC. However IP is a difficult topic and so cannot be generalized. If somebody were to release an ‘Angry birds’ on Android with similar look and feel on Android while an app with the same name was already running on iPhone, could be contentious.

    If the Groupon clone in China had called itself ‘Groupon China’, then it is clearly violating our sense of right or wrong. However, in the age of paid email, Hotmail email for free.Was it wrong for Yahoo, AOL or Gmail to copy them and give away free email?

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  11. Innovation is key to development. If innovation stops, stagnation starts.People may imitate innovations, but that is still another step in innovation process. But smart copying is not everyone’s cup of tea. Man is monkey. And this characteristics has made him different.

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  12. ** For example, if a GPS tracked device showed a restaurant was full, you wouldn’t need a Yelp review to guess the restaurant quality. **

    Actually, competitors would abuse the technology to always flag the place as full even when empty, in order to kill the business.

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  13. What Silicon Valley Geeks Can Learn From Roman Legionnaires | http://t.co/KbIr8XOW

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