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Summary:

Russian social network VKontakte has built a billion dollar business by cloning almost every aspect of Facebook for the local market. It seems a little rich, then, that founder Pavel Durov says his long-term ambition is to prove that Russian products can be global leaders.

vkontakte screengrab

Pavel Durov is often referred to as the Mark Zuckerberg of Russia — and for good reason. At just 26 years old, he’s young and ambitious but generally likes to avoid the gaze of the media. Like Zuckerberg, social networking has made him rich — with analysts suggesting that his business, Vkontakte, could be worth in excess of a billion dollars.

But most obviously is the fact that Durov seems to draw his inspiration directly from Palo Alto: Vkontakte is one of a legion of Facebook clones that have made a pretty pile from stepping in to foreign markets before the American company. And this isn’t just a loose, “inspired by”, situation — you only have to glance at VK to see that Durov and his team have copied their service almost wholesale.

This success has irked Zuckerberg, who believes that he has to succeed in Russia if the company is ever going to crack tougher, more complex markets such as China. Of course, it’s a little ironic given given the constant controversies about Facebook’s origins, but you can see where he’s coming from: VK has swollen to 135 million accounts in a country where Facebook itself has lagged — it’s way down the local list of top social networks and actually lost around 100,000 users in Russia recently, according to Inside Facebook.

Despite this success, Durov’s latest mission still seems rather odd: to talk to the press about his desire to prove that Russian products are superior to their foreign counterparts. In a rare interview with Forbes.ru, Durov said his ambition was to turn around the international perception of his country’s output.

“My dream is to turn around our national inferiority complex, proving that the products of Russia may be massively in demand around the world,” he told Forbes.

He admitted that to get there, his site may need to evolve. But yet there’s no mention of whether that will take it further than Facebook or not.

“It could be that, in order to achieve our goals, Vkontakte will need to change beyond recognition — or our team will need to create a new product,” he said. “But sooner or later it will be done.”

Is this going a little far? The conflict between Durov’s public statements and his business operation seems obvious to me, but it’s hard to encapsulate what element of it really jars the most.

Clones certainly don’t do much good for Europe’s reputation. And, their continued success only goes to underline the fact that there’s easy money to be made copying somebody else’s work (Vkontakte is considering whether to launch on the stock market — perhaps in New York). And then there’s the fact that, on a business level, there’s a conflict of interest between the people backing the two businesses: VK’s big investor, Yuri Milner, is the same man who has put around $350 million into Facebook. Clone-makers are looked down on by the rest of the industry, until the money starts flowing.

So is it time to agree, once and for all, that while clones might be big business, that doesn’t mean they are good business?

  1. Cool and hilarious article. Much can be learned from it.

    1. Imitation and cloning can work — just like it does in nature.

    2. When imitation and cloning is looked down upon, it become extremely dangerous of the leader (in this case Facebook) looks down upon the cloner. Last time I checked, Facebook was an improvement on Friendster and MySpace. I guess MySpace could claim they were cloned.

    3. Sun Tzu said about war. “never underestimate the enemy.” It applies to business. In this case, the best example is the auto industry. Japan, and especially Toyota, used to be considered a clone by the Big Three in Detroit. And I am sure it was irritating to see Toyota enter the U.S. market as a low cost alternative — initially. If you study the history of the auto industry and Toyota, you see a natural progression of the auto industry:

    cloner –> competitor -> innovator -> leader
    (Corolla) (Camry) (Lexus) (Multiple Brands)

    This is what has happened to Toyota. They became a leader, got greedy and blew it with their quality issues.

    The same thing could play out in the social media space. You never know. The cloner could become big quickly. From what I’m seeing, Facebook is going to face major challenges in the next few years. Google+ is not going away and regional competitors like vkontkte are going to eat away the share.

    The problem with Russia (I’m Serbian and so I do understand their culture + can read some of Russian) is that they don’t have enough entrepreneur education when you compare them to Silicon Valley.

    So, they have to imitate for a while. But I wouldn’t count them out just like the Big Three had done with Japanese auto manufacturers. Russians are highly technical folks. I’ve known a few.

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  2. well..Imitation or not, the guy has done some real stuff, made some nice money, and a good rep for his company..this is called using incredibly simple application of brains

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  3. I hate VKontakte! 1) block and delete pages by administrators without any explanation 2) can not delete page 3) VKontakte change the rules at their discretion 4) bribery administrators 5) a lot of porn 6) breaking the page …. ! ! Facebook is much better! I VKontakte user … and I know better! postkriptum – sorry for my bad English!

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