Rocket Internet can fairly be described as the European tech scene’s pantomime villain. The Samwer Brothers’ incubator-slash-accelerator has a wide variety of companies in its stable, and few are what you might call “original”.
You know Zappos? Zalando is Rocket’s quite-similar offering. Groupon? CityDeal. Airbnb? Wimdu. Pinterest? Pinspire. Fab? Bamarang. DropGifts is the latest – check it out; it may remind you of Wrapp. The list goes on.
In an entertaining rant earlier this month, Jason Calacanis derided the Samwers as “copycat thieves” (one of the milder phrases he used).
Note the enthusiasm in that video of the crowd applauding Calacanis – those are some of the Berlin startups who aren’t Rocket companies. They don’t like Rocket. Is it indignation or jealousy? Perhaps a smattering of both.
That’s because Rocket Internet’s business model often works extremely well.
Dominik Richter, the CEO of Rocket’s latest baby, HelloFresh, tells a now-familiar tale of the Samwer’s extraordinary execution capabilities.
“We started at the end of last year, and we’re now active in seven German cities and five countries – the UK, France, the Netherlands and Australia,” Richter told GigaOM. HelloFresh’s “kickoff meeting” was in mid-November. It took just 40 days for the service to go live and begin expanding.
The company’s business is in selling subscription packs of fresh produce, along with the recipes needed to cook them. The “sort of inspiration”, Richter said warily, was a Scandinavian service. He didn’t name it, but we’re talking about Sweden’s Middagsfrid, which funnily enough now has an official German spin-off called KommtEssen.
“It’s something that has been very successful in Scandinavia but not really elsewhere,” Richter explained. “I say ‘inspiration’ because we do some things differently – we adapted it from the beginning to local markets. The vision is you have a global e-commerce player for perishable goods. Right now, it’s for us to figure out what other markets to go to and maybe increase the product variety.”
Richter is quite a different proposition from your typical hipsterish, arty Berlin tech startup CEO. He’s a businessman, not an overt idealist, a product of the London School of Economics and Goldman Sachs. His stewardship of HelloFresh was the result of talks with Rocket “about different spaces, different projects.”
“For me personally, I’m definitely committed to HelloFresh and want to grow it into a big global e-commerce company,” he said. “Rocket has the most impact in the first months of a company. In the beginning, in my case, all the IT came from Rocket. It has local expertise in different markets. We’re trying to build up our own setup over time and not draw on too many resources, but emancipate ourselves.”
“Emancipation” isn’t such a strange way of putting it, if you consider the management style demonstrated in Ollie Samwer’s now-notorious Blitzkrieg email, in which he told his staff he will only back their plans if they are “signed with blood”.
But far be it from Richter, or any of the other Rocket staff present during the interview, to show anything other than respect for the firm.
“It’s the world’s most successful incubator with a proven track record,” Richter said. “Every model it’s pursued in the past years has turned out to be a huge success, and they give you the chance to build out a hugely successful company yourself. The risk profile is quite good when you jump into bed with Rocket.”
So what about that copying thing? That’s just the failure on the part of the idea’s originators to execute quickly enough for this digital age, he says.
“The world has become so well connected and globalized that you don’t have lead times of a couple of years to realize business opportunities,” he said. “The end consumer demands the same product and same services in all markets, and where there’s a need there’s a business opportunity.”
Does Rocket ever do original ideas? Here Mariko Schmitz, who’s heading up communications for DropGifts, chipped in.
“It’s hard to define that,” she said. “Of course [DropGifts has] been inspired [by Sweden's Wrapp], but there’s a big movement on the internet about social gifting and companies linking into Facebook.”
“In my opinion, the real work begins when you’ve launched a concept and you follow it up, and you build something on top,” Richter added.
The distaste for Rocket that many in the Berlin tech scene show is often tempered with a grudging respect for the outfit, and it’s not hard to see why.
When you ask Richter about HelloFresh’s medium- and long-term plans, he boasts that the medium term, for a Rocket company, is four to six weeks. The long term is three months. All the ill will in the world won’t slow down an operation ploughing ahead at that kind of speed.