Ideas and Validation January 26, 2021

Does it make sense to build a copycat competitor?


I am thinking about to copy exactly the same product of a +$50M invested 4 years old company (received $40M investment during covid).

Their pricing is $9 per user/per month. I have been making investigation for a long time. I can offer the same features for $1.99 and still make profit.

I can build their product from scratch in 3 months. I am an experienced software engineer.

My concerns:

  1. Would the customers really choose my product just because it is 4x cheaper. They already have millions of users but the market is growing super fast since more people are working remotely.
  2. Thinking about the network effect, it may be very hard to convince new users that my product is as good as theirs.

Any thoughts or previous experiences of building copycats?

  1. 9

    Talking about copying someone else but scared to share the name? 🤔

    "Their pricing is $9 per user/per month. I have been making investigation for a long time. I can offer the same features for $1.99 and still make profit."

    Price point is not always the reason before our choice, if you make it that cheaper I'd have second thoughts about your service. What I'd do if I were you, don't exactly copy what they do, find their weak spot provide a better solution and charge fairly. It should take less time, let trouble, you don't need to feel like a copycat, if it fails you'll lose less time.

    Don't take my word on it, some popular guy wrote a book or article around the topic about underdoing.

    1. 1

      Hey! Thanks for the response.

      You are right. Price is not the only decision criteria while purchasing a product.

      I agree that I need to find it’s weak spots but can’t see any at the moment. Maybe it is because I haven’t really thought about the product’s weak spots. Will definitely think more about it.

      1. 4

        Use g2 trustpilot read the reviews and see what they lacks. When I’m checking sendoso reviews I get idea that their dashboard ux is not good everyone is telling that they get problems while clicking, choosing something so just analysed what they doing bad and also see what they are doing great and just implement it.

        1. 2

          It makes a lot sense. Thanks

          1. 1

            Nice to see it provide value for you.. You can bookmark my website which helps founder by providing startup tactics and tips to grow startup.

            1. 1

              I think you go for it but just don't think about building find audience which already interested for paying your product make a wishlist page and go in the market where customers are hanging and build a email list.

  2. 3

    I'm all in for building a copycat. If not more, it saves you a ton of time figuring out the right market & product features. But be smart about it. I think you are focusing only on one parameter (pricing axis) & in reality you can tweak & play around with a lots of other major things like ,

    1. Market segment tweaking
    • Look at all your competitors' market segments & pick a segment which you feel is underserved
    • May be this sub segment needs a more custom solution, may be their processes are slightly different, may be they need someone who can help them implement things properly. Understand what it is & add those minor additional features & package it as "xxx for segment"
    • Think of all sorts of CRMs that exist today. A health care focussed CRM is a good example.
    1. Customer size tweaking ( smb vs mid market vs enterprise)
    • Take the competitor product & start selling it to lower end of market, by getting away with unnecessary bloated features & may be decreasing price slightly
    • You can go upwards as well, based on scenario
    1. Product solution tweaking
    • One more common approach is to simply start selling to same market segments & sizes as you competitors, by claiming that you've got a better product ( a bunch of killer features / superior tech / superior UX etc.)
    • Mostly this works if you're early enough in the market & TAM is high enough for everyone to capture. It's very hard to penetrate into a crowded market with this approach.
    1. Pricing tweaks
    2. Adding a services layer along with your product

    Also remember, while copying it's very important to understand what the key features ( 80% value) are, to serve a customer in this market. Only copy these. Then start adding your magic touch to the product, by building the features that you feel are needed based on your understanding. So, most likely within a couple years, you will be much more than a simple copy cat.

    1. 3

      Great answer.

      All the people here recommend the same thing. Implement the 80% core features + 20% weak spots of the competitors. I think this is a great advice and I will be doing it more.

      As you mentioned, you will not be 100% copycat when you do that.


  3. 3

    We built our product simply based on the fact that the market leader was too expensive for us to use. Now, I probably wouldn't copy everything. Copying everything an established business has done and simply offering at a lower cost is really tough to do – they've had years to get ahead.

    Instead look find out where a significant % of their users get 95% of their value. Take that part of the product and tackle that market. In every industry there's so many features and bloat that the majority of people just don't need. Look at low-cost airlines who have done done it by getting rid of food/alcohol/hold-baggage.

    So remove that bloat, justify your lower prices in doing so and sweep up the users who are looking for a more affordable solution.

    ^All that said though. $2 a month soon becomes $1.70 a month in your pocket after CC fees. And take into account for many people $9 a month is not prohibitive. Not knowing the specifics, I'd probably look to do this with a higher cost product.

  4. 3

    Let's accept the fact. You are not going to replicate a $50m size company.

    Product? Tech? Maybe.

    But you will never reach the same team culture, marketing and all the content they've created online.

    People pick a product not only because of the price, but also their service, service level, customer relation, scalability etc.

  5. 2

    You may understand what their product does, but do you understand the pain points of their customers that this product addresses? If you do, you can build a competitor, but focus on a pain (or deliver a gain) that the original product does not. If you don't understand the customer, you're riding on their coattails without really knowing the "why".

    You have little to gain by investing all that time and effort to reproduce something that exists for a quarter of the price. Also consider how they market their product for you to have heard of them. Are you going to market as hard?

    Is your sole proposition going to be "Like [x], only cheaper"?

    Without original direction and thought in your product, you're always going to be playing catchup to whatever this product does next.

    What if the original product decides to reduce their price - where does that leave your offering, without brand recognition and now no distinctive features?

    There's a difference between building an +1 product and a copycat product. However, you're likely to be better off finding a niche you can exploit and, in the words of Peter Thiel, going from 0 to 1, than 1 to 2.

  6. 2

    It depends on what you consider copycat. There are so many Trello alternatives, or now days Airtable alternatives that are doing fine.

    I even wrote here about having some extremely simple product such as spreadsheet api and still being able to find customers.

    Try not to be the exact copycat. Find most used features of the product and try to make one or many of them better in some way. That way you don't even have to be cheaper to get someone to pay.

  7. 2

    If they are charging $9/per user/per month, I don't think anyone would consider a product for $1.99/per user/per month (in most cases). If you can afford one, you can afford the other.

    1. 1

      I think you are right. Let’s say you are an enterprise with 400 employees and wanna purchase the base plan. $800 vs $3600. I guess paying $2800 more month($33k annually) is something an enterprise can afford.

      But there are also regular customers. $9 vs $2 could be a significant difference for them.

      1. 1

        My point is that if you can't afford $9 a month for one seat, you probably aren't willing to spend any fee. Either you are using a free tool or you are just making do with whatever else (e.g. instead of paying for Intercom/Helpscout, you just get support emails, instead of paying for you use Trello...).

        I'm sure there are way smarter ways of expressing this then I am, but don't think that undercutting on price will bring sales. Have you got anyone at all that you know will buy your product (not just someone who has said they will... but someone who you've spoken to with say the Mom test in mind?).

        I'm not trying to be harsh, I'm just saying... there's about 90% of us on here that have fallen into the trap you might be falling into.

        1. 1

          What if I initially offer it for free to market it?

          I would burn some money but get feedback and improve the product.

          So now it is

          Free vs $9 per user/month

  8. 2

    as a saas owner is have an issue with sub 10 usd / month pricing, in general , at that pricepoint , if you need to offer any support you will be losing money.
    so you can compete on price but your overall monthly price should be ideal in the 20 usd range minimum to cover support , invoicing , payment fees etc

    1. 1

      This is the base plan for the regular users. I will also offer an enterprise plan to businesses. It will probably cost that much.

  9. 1

    It may actually make more sense to price that at $49/user/month and reach out to companies via cold emails or cold calls. I saw a video on youtube by TK kader and he raised prices from $9 to $120/month for the same product!

  10. 1

    My 2¢ (tl;dr below):

    I wouldn't copy someone just because they're successful – that's one of many reasons. The product I'm building has competitors, and I'm building it because those competitors didn't offer what I needed so at the time I had to pay a professional man hours to produce what I needed.

    The coolest thing about competitors is that they save you from having to validate your idea; it's already valid. Now try out your competitor's demos, use the application, and if it suits your needs, I'd move on and try out something different.

    That said, if you see pain points in their application and or notice their users/customers are desiring something their platform doesn't offer, I'd target those points, and fill that empty spot the competitor isn't filling, that will reduce the scope of your product to something you can build and iterate on quickly while you flesh out the rest of the platform to match feature parity with the competitor.

    Another technique is to find and reach out directly to those consumers that are needing something out of the competitor and ask them how you could fulfill their needs. You could even get a contract signed before you even build your product, loads of people sell before a product is finished.

    Pinpoint things your competitor doesn't offer or do well, and target that. Also reach out to consumers in the space and sell them off of a prototype to get funding earlier.

    EDIT: grammar

    1. 2

      Okay but what if I focus on the things competitors don't offer and they start offering it after I complete the product? You started focusing their weaknesses but they fixed it and now you are still a copycat.

      1. 2

        In that case, which is not uncommon, you're in an arms race with your competitor and with innovative planning you can stay ahead by continuing to communicate with your customers and offering superior service to them. It's a risk and you'll have to evaluate whether or not that scenario is something you can handle or want to do. Not a bad thing at all.

        Certainly better imho than making some amazing, innovative thing that no one has ever seen and then out of nowhere getting out-competed by a copycat you didn't anticipate; with the above scenario, you are ready for the competition and you have a plan to move forward.

        It's not a bad thing, think Google Drive's products vs the Microsoft Office 365 suite. They do the same thing essentially, but there's room in the market for both of them and they are constantly driving innovation by competing with each other.

        1. 2

          I'd like to add that by focusing on a smaller-scoped niche of features, you can manage the product yourself or with a few hands on deck while producing a great quality product and service, whereas the $50mm+ company is so large potentially that they'll trip over their own internal processes to match what your product offers at a much slower pace than you can, unless they are a highly optimized company.

          Startups are always more agile than bigger companies, the more scope you take on the slower you are to get value out to customers because you have so much ground to cover (of course this is heavily debated but that's the way I've seen it happen).

  11. 1

    I bet you can't offer the same features for $1.99 while also replicating the sales and marketing infrastructure, the reliability, the level of support, etc.

    If you think you can, you could always position your product as an alternative for emerging markets where the other product is comparatively too expensive.

    This is a common strategy that many successful businesses have used.

    1. 1

      Their enterprise plan costs around $15 user/month.

      No much support included in the base plan.

      You are right, targeting the emerging markets may be a good strategy.

  12. 1

    It would make sense if you are going to stick with it for years to come. I think making the product whether 3 months or 6, would be half the battle. Marketing it each and every day for the next few years to get new signups / traffic, while burning up your savings at least in the start, and outdoing them on marketing would be the bigger deciding factor of your success in the long run imo.

  13. 1

    Yes and no...

    For example, Portabella is Trello/Asana/Jira but in the niche for privacy conscious teams/individuals.

    Block Hooks is just Infura but for the Celo ecosystem.

    Maybe share the name of this project you're looking to copy?

  14. 1

    I don't thinking copying the exact same with do much. You need to innovate some functionality at the very least.

    For instance- I built a free to use productivity tool called Brutask recently.

    Although Asana is highly popular in this space and its paid as compared to my free tool, it would have made no sense to simply replicate their product. That's why I went completely minimalistic and niched down in to To-Do list category only. In this way, not only am I targeting a certain category of users but also innovating the idea simultaneously.

    Furthermore, I think it also depends on your product and the industry you are aiming. The details you have provided are pretty less to pass on any judgement for that matter.

  15. 1

    Though price is an important factor, another route you can go is serving a very specific type of user. The $50M company is probably targeting a broad audience, you can go after a subset of their broad audience, making you the go-to tool for that segment. So not only you become the specialist for the segment, your price is also more affordable.

  16. 0

    You haven't told us much about the business, so I'm assuming you're right that:

    1.) a lower price is enough to lure their customers to change providers
    2.) you are able to offer the same service for low enough cost to incentivize customers to switch.

    Even if both of those are true, what is stopping someone else (maybe the original company) from lowering their costs to match or beat yours? Maybe their costs are already that low, and they're just enjoying a lot of margin right now.

    If you don't have an unfair advantage on costs, then neither of you have a defensible business. You'll both just keep lowering prices until there's no margin left and someone has to give up, which doesn't sound very fun to me.

  17. 1

    This comment was deleted a month ago.

    1. 1

      Nope, it isn’t same.

      You wouldn’t use Twitter replica because nobody is there(network effect)

      This is a service, not a social network.

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