On June 4, 2010, Matt Desch, CEO of satellite communications company Iridium, sat in his McLean, Va., office staring into a computer screen at a live video feed of a 368-ton rocket idling on a launch pad in Cape Canaveral, Fla. The telecom veteran had staked Iridium’s future on a $3 billion plan to bring the company’s aging constellation of satellites into the 21st century. A key part of that plan was getting 72 next-generation satellites into orbit, and it was this rocket, now preparing for its maiden flight, that would eventually carry Iridium’s precious cargo into space.

In selecting a company to launch his satellites, Desch hadn’t opted for a tried-and-true aerospace player like Arianespace or International Launch Services. Instead, he had decided to go with the upstart Space Exploration Technologies, better known as SpaceX. Why? SpaceX had offered to launch the six-dozen satellites for half what the established players were charging, saving Iridium half-a-billion dollars.

Matt Desch

But the decision carried a huge amount of risk. While SpaceX’s entrepreneur-founder Elon Musk was already well known for his ambitious goal of privatizing space travel, his company at the time had had more failures than successes. Its previous-model rocket, the Falcon 1,misfired on each of its first three launches: the first caught fire, the engine on the second died, and on its third launch, the rocket’s two stages collided. Those failures sent the company teetering toward toward death, saved only by the Falcon 1′s fourth, successful, launch.

Now, Desch and Iridium were about to see whether SpaceX’s newest rocket, the Falcon 9, was more reliable than its predecessor — and the months leading up to June 4 hadn’t been very reassuring. The rocket was supposed to have embarked on its first flight in November of the previous year, but that launch had been postponed 10 separate times.

The rocket had finally reached the pad, but as Desch watched from his office, there had already been one false start, the launch aborted due to an errant sensor reading. If SpaceX couldn’t light the fuse by 3 PM, the mission would have to be rescheduled once again.

Another string of failures could endanger Iridium’s exacting launch schedule, or worse, send SpaceX spiraling into bankruptcy and Iridium scrambling to find another launch provider. The biggest concern, though, was the reaction of Iridiums’s bankers. Desch had negotiated a $492 millon contract with SpaceX — the largest commercial launch contract in history – but because of SpaceX’s track record, the consortium of European banks underwriting the whole project wanted to see a successful launch of the Falcon 9 before they put pen to paper.

As Desch put it: “Bankers don’t like to see explosions.”

Fifteen minutes before the launch window closed, the Falcon 9′s first-stage engines ignited and the rocket lifted off. Six minutes later it achieved its target altitude and placed a dummy capsule in orbit 155 miles above the Earth. The normally stoic Desch let out a cheer of elation. Outside his office his employees celebrated — high fives all around.

A week later, Desch was in Paris hamming it up with the bankers, and true to their word, the financiers signed off on the contract. When Musk attended Iridium’s investor conference in New Orleans later that year he was treated like a superhero — it was like “having Tony Stark, a real-life Iron Man” in the room, Desch said.

Elon Musk

The following is the never-before-told story of how Iridium placed a huge bet on SpaceX that wound up paying off. In a series of interviews, Desch shared with GigaOM the details about how a satellite communications company struggling with its future found common cause with a scrappy startup that wanted to broaden the frontiers of space exploration.

Iridium didn’t need SpaceX to survive, but by placing its faith its Elon Musk’s company it found a way to overhaul one of the largest satellite constellations in the heavens on a shoestring budget — and trade up its old voice-centric business model for one focused on data. In exchange, SpaceX got the major contract it needed to firmly establish itself as a powerhouse in commercial space flight.

A mobile network hurtling through space at 17,000 mph

Iridium was born out of the satellite communications boom of the late 1990s, riding a wave of speculation that satellite players like itself, Globalstar and Orbcomm could build a truly global mobile network for the monied classes. Backed heavily by Motorola, it activated its constellation in November 1999 and began selling its first bulky satellite phones around the world. Nine months later it filed for bankruptcy,

At that point it was clear that satellite telephony wasn’t going to even compete with cellular, much less replace it. There was a good chance that Iridium’s $5 billion to $6 billion network would have been decommissioned entirely, letting the satellites fall out of orbit and burn up in the Earth’s atmosphere, creating one of the most spectacular pyrotechnics display the world has every seen. But at the last minute, a consortium of investors bought Iridium’s extraterrestrial assets for pennies on the dollar and restarted satellite phone service in 2001 with much more modest ambitions.

Iridium isn’t your typical satellite communications company. It’s not tossing a few satellites into orbit that are hovering at fixed points above specific continents. Instead, it operates a constellation of 66 birds that cover the entirety of the Earth’s surface from pole to pole. Each satellite travels at an orbital velocity of 17,000 mph on dispersed planes that intersect on the Earth’s axis, meaning no matter where you’re standing – or floating — on the surface of the earth, you’re in view of multiple Iridium satellites.

That kind of network may not be useful to your typical consumer or business user, but it’s extremely attractive to a certain set of professionals – military, international contractors, merchant marines, field scientists and surveyors – that travel to the far corners of the globe.

When Desch took over as CEO in 2006, Iridium had cemented a close relationship with the U.S. Department of Defense, and was expanding into the private sector. He took the company public, made it a profitable venture, and expanded the company’s portfolio to include data and machine-to-machine services communications (for companies or organizations that want to keep track of their assets even when they are in the middle of the ocean or in the remotest jungle). Desch has doubled Iridium’s subscribers to 576,000 in six years, according to the company’s last earnings report.

Iridium has some big accounts like FedEx and UPS but many of its customers are smaller outfits. Iridium satellites track dog sleds as they race across Alaska in the Iditarod, and they provide crucial communications for the relief workers of the International Federation of the Red Cross and Red Crescent Societies in war-torn and diaster-stricken regions of the world.

Desch said Iridium no longer has any interest in challenging the mobile carrier powers or moving beyond basic voice and data connectivity. “I hate to use the term dumb pipe,” he said. “It has such negative connotations. But I have no problem with the term because no one can supply the kind of dumb pipe we can.”

A fascination with anything that flies 

Desch started his career at Bell Labs 30 years ago, and since then he’s made the rounds through the telecom industry. He was president of the now defunct Nortel Networks’ wireless division, where he oversaw the construction of some of the  world’s biggest 2G networks. In 2002, he was tapped to become CEO of Telcordia, the former research arm of the regional Bell phone companies. He sits on President Obama’s National Security Telecommunications Advisory Committee and has either chaired or sat on the boards of pretty much every U.S. telecom industry trade and standards organization.

An Iridium Flare over upstate New York

Desch grew up during the Apollo Moon flights, and has always been fascinated by anything that flies. Though he’s never left the troposphere, he pilots his single-engine Cessna T210 several times a month. When discussing Iridium, Desch never fails to mention that the satellite constellation has become an object of obsession among star gazers. All of Iridium’s satellites have flat, door-sized, highly-reflective antennas. When those antennas catch the sun’s rays just right they produce a “flare” 3o times brighter than Venus in the night sky.

When Desch accepted his new role at Iridium, he was almost immediately handed a huge task: to replace Iridium’s aging constellation with a new generations of satellites. It’s current network is already well past its anticipated operational lifespan of seven to 10 years, and several satellites have already malfunctioned or have tumbled back into the atmosphere. Iridium 33 was decommissioned in a more dramatic fashion in 2009 when it collided over Siberia with a defunct Russian communications satellite at 22,000 mph.

Iridium replaced those defunct or lost satellites with in-orbit spares, and Desch said that the company could keep the current fleet going until 2017 when it hopes to complete its replacement. But there is definitely a sense of urgency. Iridium may be able to squeeze some more operational life out of its satellites, but it doesn’t change the fact they’re already obsolete.

In the last 10 years, mobile communications has shifted its focus from voice to mobile broadband. Satellite broadband technology has made huge leaps. ViaSat in October put into orbit a satellite with a total network capacity of 140 Gbps, allowing it to offer speeds up to 12 Mbps to customers on the ground. Iridium’s closest competitor Globalstar, which runs a constellation of 40 satellites, is already one-third of the way through its next-generation satellite deployment. Globalstar’s orbiters only support speeds of 256 kbps, but even those sub-broadband connections put Iridium at a significant disadvantage.

Iridium’s network can only support a 10 kbps earth-to-orbit connection, which is pretty much the speed of a 1990 dial-up modem. That might be fine for downloading email without attachments from an ocean-bound oil tanker or sending out the GPS coordinates of a polar expedition. But in an age of multi-megabit connections to smartphones, those speeds just don’t cut it.

Desch’s big bet

Between 2015 and 2017, Iridium plans to replace every single one of its 66 current satellites with new Thales Alenia-built orbiters, and also throw up six spares. Called Iridium Next, the constellation will boast device connection of speeds of well over 1 Mbps to mobile devices and 8 Mbps to dish antennas, and will significantly boost the capacity of the overall satellite grid. When the constellation is complete, Desch said, Iridium will be the only communications company in the world that can deliver a megabit or more of a bandwidth to any point on the globe.

To get such a huge payload into low-Earth orbit, Desch didn’t just need a launch provider to supply multiple rockets, he needed one that could reliably send those rockets into space every few months starting in 2015. Once Iridium puts its first batch of satellites into orbit, the others need to go up in rapid succession.

Iridium’s satellites aren’t just bouncing signals back down to the Earth’s surface. They’re inter-networked. They’re passing calls among one another in a cosmic game of hot potato until one of those satellites flies over one of four ground stations where it finally connects the call to the terrestrial network.

Having a 1 Mbps connection to a new satellite does little good if the satellite completing the chain can only support dial-up speeds. So Iridium Next won’t be open for business until the full complement of 66 new satellites is in orbit.

Finally, Iridium had to buy those launches on the cheap, according to mobile satellite services analyst Tim Farrar. The original Iridium constellation in 1999 was a multi-billion-dollar debacle. So Iridium is determined to get its next-generation network up on a $3 billion budget, Farrar said.

“Iridium really had to go with SpaceX, because more established players have found their launch services in heavy demand in recent years and so have been raising prices,” Farrar said.

For $492 million, SpaceX would deliver eight launches, while any other rocket supplier would have charged $1 billion for the same services, Desch said. But Iridium also hedged its bets. It contracted with ISC Kosmotras – a launch consortium between Russia, the Ukraine and Kazakhstan — to serve as a second launch provider and as a backup in case SpaceX is delayed.

Still, it wasn’t an easy decision, Desch said. Iridium first started negotiating with SpaceX in 2006, when its rockets started falling out of the sky. It wouldn’t matter how much of a deal SpaceX cut if it couldn’t deliver a reliable launch vehicle or ceased operations.

“Our view was always that SpaceX was going to be successful,” Desch said. “What we weren’t sure about was when they would be successful.” Iridium had some leeway since its first launch wasn’t scheduled until 2015, but it couldn’t push its launch date out much further. At that point Iridium’s old orbiters would be 15 years old, long past their original expiration dates. It needed to get the new birds up but before the old ones start failing en masse.

Iridium is by no means Space X’s most important customer — that would be NASA. Nor is Iridium SpaceX’s first commercial satellite customer. But the size and scope of the Iridium deal were key to establishing the fledgling aerospace company as a heavyweight in the commercial launch industry, said SpaceX President Gwynne Shotwell, who led negotiations with the satellite operator.

Gwynne Shotwell

“We definitely knew the significance of that deal,” Shotwell said. “It was the largest commercial launch contract at the time. No one else has ordered six or seven launches. … It’s helped us out in every deal we’ve gotten since.”

Houston, do we have a problem?

Earlier this month, Iridium revealed in its second-quarter earnings call that it was canceling its first Falcon 9 launch, and had decided to go with backup ICS Kosmotras for its first flight. Desch said there were no problems or delays; rather Iridium was just minimizing costs. By packing 10, rather than nine, satellites onto each SpaceX rocket, Iridium says it can reduce the number of launches from eight to seven, saving an estimated $15 million. But Desch added that Iridium also wanted to buy SpaceX more time.

“It’s a smarter strategy for in-orbit testing and provides us some additional cost savings,” Desch said. “It also gives SpaceX a little more time to get through the two dozen or so launches that are on their manifest before Iridium Next.”

Ironically, the greatest risk to Iridium now isn’t the possibility of SpaceX’s failure, but the possibility that SpaceX becomes too successful, according to satellite communications analyst Farrar.

“Their risk has always been that SpaceX gets a lot of money from NASA and so will likely put them first,” Farrar said. “That’s also the exciting, novel stuff like manned spaceflight, so people naturally gravitate towards it. Launching commercial satellites is a less exciting business requiring a lot of repetitive, careful engineering.”

Dragon Spacecraft

SpaceX has been on quite the roll lately. It hasn’t suffered a single failure in its three Falcon 9 launches, the last of which delivered the company’s Dragon spacecraft to the International Space Station on a resupply mission. Earlier this month, SpaceX won the ultimate prize: a $440 million contract from NASA to design a manned spacecraft to shuttle its now-grounded astronauts into orbit.

When asked if SpaceX’s recent success jeopardized Iridium’s tight launch schedule, Desch laughed. He admitted that he freaks out a little when Musk goes off on one of his soliloquies about exploring other planets or talks up new rockets like SpaceX’s Falcon Heavy designed to propel astronauts on their extraplanetary adventures. Desch just needs to get to low-Earth orbit, not Mars.

But Desch said Iridium has SpaceX’s full attention. Iridium Next is still SpaceX’s single largest commercial contract — it’s not going to get pushed to the wayside no matter how many sexier missions the company lands. Desch has been working with Musk and Shotwell for nearly six years, sticking with the company through its lowest points. He believes that SpaceX will remember its early friends. As he told analysts at Iridium’s earning call: “We knew them when they weren’t quite as cool.”

Iridium flare photo courtesy of Flickr user Gadget_Guru

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The site is one of those flash-sale shopping clubs that were rare a year ago, but took off after Fab.com pivoted midway through 2011. Concentrating on the ‘home and living’ segment, Westwing was only founded in August last year, but it already boasts three million members in more than a dozen countries (including several where it trades as Dalani).

Sales have increased tenfold in the last five months, the company claims. That’s an impressive performance, and it’s now got some serious validation: with $32m of funding already in the bank, Westwing has announced that it’s picked up a further $50m, with existing investors such as Rocket, Access Industries, Holtzbrinck Ventures and Investment AB Kinnevik being joined by round-leader Summit Partners.

Summit knows this segment well, having been an investor in Vente Privée, the French company that kicked off the whole flash-sale shopping club thing before anyone else realized it was a good idea.

And with this extra cash, Westwing looks set to do what Rocket firms do best — expand like crazy.

“We are dedicated to building one of the largest e-commerce retailers in the emerging home décor and furnishing market on an international scale,” Westwing CEO Stefan Smalla said. “With this new capital, we will accelerate our rapid growth, scale operations in each of our countries.”

As we’ve pointed out before, the genius of Rocket’s approach is in creating an international distribution network that can support any number of new e-commerce models that are plonked on top of it — so now that Rocket is up and running in Brazil, for example, it can roll out new ideas in that country very quickly.

But making those new models attractive and ‘sticky’ is another matter. Zappos clones like Zalando are relatively easy to make work, being more about margins and distribution than anything else, but flash-sale outfits like Westwing need to have a certain class and character that makes them stand out.

Which is no doubt why Smalla noted that Westwing would “benefit from [Summit's] substantial experience” – a prime example, if ever there was one, of investors bringing a lot more than money to the table.

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Wrapp, which now pitches itself as “the world’s first and leading social gifting service”, had already reacted to the attack of the clone by promising to speed up its own expansion — after all, what Rocket lacks in originality it makes up for in execution. Wrapp opened up in the UK last month, and on Monday it will set up shop in Germany.

The Wrapp-DropGifts battle is now starting to resemble a high-speed (for the e-commerce world) game of Risk. Wrapp only launched in Sweden last November, and in the intervening months it claims to have had 150,000 users sending more than a million gift vouchers to their Facebook friends, using the iPhone and Android Wrapp apps, in that country alone.

Since DropGifts appeared in late February, Wrapp has opened in Norway, Finland, the UK and now Germany, and is still aiming to move into the USA, China, Japan and Brazil as well as Austria, Switzerland, Italy, France, Belgium, the Netherlands, Luxembourg and Eastern Europe.

It would do well to move fast. DropGifts has already opened shop in Italy, the UK, Germany, Belgium, the Netherlands, Japan, France and Brazil, and is soon to arrive in India, South Africa and who knows where else.

And DropGifts has also just received a chunk of investment from eVenture Capital Partners and New Enterprise Associates (NEA), Deutsche Startups reported on Sunday.

Of course, the battle is not just about who can open in the most places most quickly — although that’s a pretty big deal. Wrapp’s major selling point, it says, is that unlike Rocket it doesn’t operate a bunch of e-commerce businesses itself, so it makes for a more trustworthy partner for the brands whose vouchers it’s selling.

Rocket’s game is quantity first, quality later. Over time, we’ll get to see who wins on quality. But right now, it looks like it’s all about who can spread faster.

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That’s significant, since Airbnb is on a tear of its own. It’s pushing hard off the back of a monster $112m round of investment, and It’s just acquired British travel site Crashpadder as part of a plan to expand further into the European market ahead of the London Olympics.

The two seem destined for a headlong crash into each other, but Bleckwenn is quick to suggest that the market is big enough to support them both.

“I think there will be a couple of really big companies, and then a number of smaller ones too,” he says. “To me, the reality is that we’re both taking business away from the hotel industry.”

On the surface at least, the rangy German — a serial entrepreneur with a handful of previous web businesses behind him — is targeting the big hotel chains, with the hospitality industry heading towards half a trillion dollars. They are concerned about Wimdu and others, he says, because peer-to-peer accommodation not only cuts hotels out of the loop but it also offers people something that they can’t: the chance to feel like a local.

Another reason to focus on growth rather than competition, he suggests, is that while Wimdu thinks it is going mainstream, it’s still some distance away from being a household name yet.

“The fact is that if you ask people on the street what is Airbnb or what is Wimdu, most of them won’t know,” he admits.

Still, the company feels like it’s turned a corner. Since the start of the year things have cranked up, with visits growing dramatically and revenues now in “seven figures”.

So what accounts for the massive surge in growth over the past few months? It’s not really seasonal — unlike more traditional travel businesses — because the average Wimdu user largely books weekend city breaks at short notice rather than long-term holidays. Instead, he suggests, it’s largely down to smart marketing, he says: nothing revolutionary, but well-focused and well-funded.

Funding, of course, is not something Bleckwenn has to worry much about. The company raised a bumper $90 million last summer from Swedish investment Kinnevik and incubator Rocket Internet — the infamous German clone factory, which we have covered in plenty of detail here in the past. That money is what has helped Wimdu get the wheels spinning so fast, so soon, but it also comes with serious strings attached (Rocket companies are notorious for giving founders only a limited amount of equity, and pushing workers very, very hard.)

These days, says Bleckwenn, Rocket has less input in the way the company is run. They’re starting to develop their own identity, separate from the mothership, and exploring what they can do outside of the day-to-day business of getting up and running.

“They [Rocket] are really focused on short-term; getting the company started, building fast, executing quickly,” he says. “They have a lot of expertise in marketing and sales that has been useful. But bow we’re successful they do not get involved very much, and we are able to think more long-term and build our own company culture which is very different from Rocket’s.”

Still, he thinks the fact that Rocket focuses on building companies in Europe gives Wimdu other advantages, not just aggressive DNA and a different market to target from its American cousins. At the very least, the company has a deeper understanding of what it takes to launch in new countries, since the European market is so complex.

It’s an approach that has helped Wimdu spread into more than 100 countries, and led it to enter the Chinese market in a slightly different way, through a spin-off business called Airizu. This is something that European businesses should be using to their advantage more, he suggests.

“It’s not just about translating your website,” he says, shaking his head. “For example, when we looked at launching in Switzerland, there people there were immediately asking about insurance coverage. That’s something that Americans don’t tend to ask. You have to treat different countries, different cultures, in different ways.”

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But is it now time to retire the idea that they just won’t talk?

Two major pieces in the last few days suggest that the three brothers — Marc, Oliver and Alexander — have decided to go on something of a press offensive.

First came Bloomberg Businessweek‘s “How Three Germans Are Cloning The Web”, a piece that hangs itself on the recent copycatting of Fab.com to give an overview of the Samwer’s main company-building vehicle, Rocket Internet. In it, Oliver Samwer goes on the record through a mixture of email and interview.

“There are pioneering entrepreneurs and execution entrepreneurs, and maybe we belong more to the execution entrepreneurs,” says Oliver, who speaks at a rapid clip, frequently punctuating thoughts with a rhetorical “ja?”

“I think the most admirable entrepreneurs are those with original ideas, ja? It’s a unique gift that you either have or you don’t. Just as we might have a very good gift of execution, others have a unique gift for the purest form of innovation.”

Meanwhile, a piece in the new edition of Wired UK, called Inside The Clone Factory, treads similar ground with a little more flourish. Written by Reuters journalist Matt Cowan, it’s obviously been several months in the making (it opens with an interview in Munich last September) and also tries to get to the bottom of what keeps them going.

“If I was motivated by money alone, I would have stopped a long time ago,” he [Oliver] insists. Rather, he suggests that what galvanises them is winning: “To prove over and over again that we’re the best,” he explains.

Both stories are good reads that give some insight into the brothers and into Rocket, and more or less go over the same ideas.

Both stories get to visit the offices of Rocket and discuss the company’s position in the fast-growing Berlin startup scene. And, ultimately, both stories manage to get the brothers (actually, mainly Oliver) to go on the record, even if it’s largely to share the same anecdotes or make the same points.

How much they add to your understanding of the Samwer brothers probably depends on how closely you follow Rocket’s movements.

The meta question is not about what these articles themselves say, or even what the Samwers say about themselves. It’s why they are appearing now. What do they hope to get from these interviews? Is it understanding? Legitimacy? Better press in general?

Whatever the case, the trio are obviously taking on a slightly new approach — and this feels like a watershed of sorts. After all, even though they really end up saying very little, well… at least they’re talking.

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While their tactics win them few friends — even Russian superinvestor Yuri Milner apparently turned down the chance to join their latest fund over concerns about their approach — there is at least an obvious method on display. So far, the Samwers have targeted established, well-funded, American services who have yet to gain much of a footprint in Europe.

But today a report about their latest venture seems to show that they’re changing tactics.

According to Berlin blog Silicon Allee, Rocket is gearing up to launch “Dropgifts”, a rival to the gift-giving service Wrapp:

Rocket Internet’s next clone startup will be called Dropgifts and will be modeled on the Wrapp gift-giving service, Silicon Allee understands. Two Facebook pages have already been set up for the new service fromRocket, the Samwer brothers’ investment vehicle, a hint that it will launch sooner rather than later.

[…]

The site also includes three bullet points: “Surprise your friends with free gift cards”, “Choose from a variety of awesome brands” and “Sign up and start Dropping free gifts today”. The “awesome brands” include some names from Rocket’s very own stable, such as Zalando and Wimdu.

Wrapp essentially allows people to send gift cards to their friends on social networks — sometimes paying from their own pocket, sometimes passing on offers from retailers and other businesses. Groups can also use Wrapp to club together and send joint presents.

While it’s not entirely clear what Dropgifts will look like — the sites are currently password protected, and the Facebook pages were taken down over the weekend — the report appears to be accurate. Indeed, when it does launch, the service seems to plan on going big: a search of domain records appears to show that individuals linked to Rocket have lined up Dropgifts sites in countries across Europe, from the U.K. in the West to Russia in the East, and from Finland in the North to Italy in the South.

The difference between Dropgifts and the other Samwer clones is that unlike previous targets, Wrapp is not an established, well-funded, American service: it’s a young startup that only launched in Sweden at the end of last year. As it says on its website:

Wrapp is based in cold and dark, but sometimes warm and bright Stockholm, Sweden. We also have an office in sunny California’s Silicon Valley. Currently we only partner with retailers in Sweden, but other countries will be added very, very soon!

True, Wrapp isn’t necessarily an entirely run-of-the-mill startup. It has a great founding team, including serial entrepreneur Hjalmar Winbladh, the former CEO of Sendit and Rebtel, and Andreas Ehn, the former CTO of Spotify. It closed $10.5 million in funding at the turn of the year, from well-regarded investors including Reid Hoffman of Greylock and Skype founder Niklas Zennstrom through his company Atomico. And it’s ambitious, with plans to launch in America and the U.K. this year.

But unlike most of the businesses that Rocket clones, Wrapp is barely out of the starting gates.

I spoke to Wrapp’s Winbladh today, and he told me that he was “surprised” by the rumors.

“At this point we don’t have much information about them — so it’s premature for us to say anything,” he said. “But it’s surprising that they would clone something as young as Wrapp.”

Wrapp already has sales people working in Germany and the U.K., both markets that Rocket appears to have lined up for Dropgifts, he said — and added that he believed the company was well prepared for a battle on German territory.

“I’m used to competitive situations, and there are lots of things with this product that make it hard to copy,” he said. “And because of the situation with clones in Germany, companies like Wrapp have to launch with strategies in place for the German market.”

So have the Samwer brothers crossed the line this time?

I’ve written recently that cloning and copying is a fact of life for most significant businesses, and heard from experts who say that it practice happens more often than we would like to admit, often in our own backyards. But while they argue that the best way of fighting that sort of copying is to go international earlier and execute better, what do you do if you are the underdog? Where do you draw the line?

Compared to the Samwers, who are currently pitching investors for a $1 billion growth fund to pump up their businesses, Wrapp is very small fry indeed. Rocket isn’t just hoping to build a copy of an existing major site and exploit a geographical market it has yet to enter, as it has done in the past with eBay and Groupon: it’s looking to elbow its way past that competitor before it even gets going.

Under the antitrust laws of many countries, using market dominance in one area to force out competitors in another is considered anti-competitive practice. By this token, the Samwers — who control one of Europe’s strongest Internet companies and have a massive war chest — are starting to tread a fine line.

Rocket did not respond to a request for comment. I suspect its employees may simply scoff and suggest that Wrapp for not growing fast enough, the question is how far and how fast can a very young startup be expected to expand.

“Of course I’m paranoid about it — I am an entrepreneur, which means I am paranoid about everything,” said Winbladh. “I won’t say I am not concerned, but they will actually help me to execute even better because it will help me galvanize the team.”

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The latest business in their sights appears to be New York flash sales site Fab.com, which specializes in daily discounted sales of design products. Tuesday, Fab CEO Jason Goldberg was alerted to a Rocket site called Bamarang.co.uk, which appears to be copying Fab wholesale.

Here are screenshots of Fab (on the left) and Bamarang (on the right).

There’s a small irony in that the victim is a copy of sorts itself; Fab started out as a social network for the gay community, but pivoted last year to become what is effectively a niche version of Groupon.

But it’s not just the business model and idea of Fab that Bamarang is copying: it’s the entire design, look and feel.

In fact, the similarities irked Goldberg so much that he called the site a “complete rip-off” and went on the offensive in blog form:

Let me put bamarang [sic] and the other copycats on notice. Ripping someone off is not going to work in this space. Knock-offs are just bad design. Users will see right through it. Such tactics may work in some industries, but not in design.

You can understand his frustration. However, if he thinks that the Samwer brothers’ tactics will fail, he may be underestimating what’s actually happening here.

True, Bamarang.co.uk appears to be a relatively small operation at the moment. It was incorporated in Britain’s second city, Birmingham, is hiring staff based in London, and has directors including Arnt Jeschke and Christian Cornelius-Weis, who have both held senior roles at Rocket alongside the Samwers (although according to TechCrunch Europe, Cornelius-Weis quit Rocket shortly before Christmas.)

But Bamarang isn’t just a single clone site for a single local market that borrows heavily from Fab’s design: it’s a whole network.

Looking around, it’s obvious Rocket plans to go seriously big with Bamarang. It’s already running the service in Germany and France, and individuals with links to Rocket appear to have registered the name in countries including Italy and Poland too. Also troubling: it has also registered Bamarang.com — although there’s nothing there so far.

If that isn’t enough to get Fab worried, here’s another reason.

Bamarang UK’s domain name was registered through another Rocket subsidiary, the interiors sale site Westwing. Essentially, it’s a very similar operation to Fab but slightly less focused on the same high design credentials. This connection could be an important sign of things to come, because Westwing is a great example of the Samwers’ copy-and-expand strategy in action: It launched just a few months ago and is already in an estimated 20 European countries, including Britain (under the brand name Dalani) and the increasingly hot Turkish market.

In the past, the Samwers were content to stay in Germany, but they are now taking a bigger, broader — and altogether meaner — approach. It’s something Oliver Samwer referred to in an email as a “blitzkrieg.”

Fab may not be facing a small challenge here: It may be facing a knock-off prepared to go much bigger and much faster than it’s willing to.

I contacted both Rocket and Westwing to inquire about their plans for Bamarang, but they did not respond.

In the meantime, while Bamarang’s visual identity and business model may be near-identical copies of Fab, I’m not sure a small protest from Goldberg and an appeal to the design community is going to be enough to stop Bamarang from growing like a weed.

After all, claims of copying didn’t stop the Samwers when they copied eBay to build Alando (a clone they later sold to eBay), or StudiVZ (a Facebook clone), or Citydeal (a Groupon clone, later sold to Groupon), or Zalando (Zappos clone) or Wimdu (Airbnb clone) — or any of the other companies they’ve built.

Clones are a depressing reality all around the world. But Fab may soon learn that you can’t simply rely on ethics to help you overcome them. Faced with a clone, you have to execute better, maintain your vision and — crucially — be prepared to compete globally.

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