27 Jul 2007
The laws of the marketplace can sometimes lead companies to model themselves on their competitors. Gary Colquhoun of SPIE Europe explains why adopting this way of working does their customers no favours.
Gary Colquhoun heads SPIE Europe's industry liaison efforts, engaging with key optics and photonics companies, individuals and industry organizations across Europe. From his vantage point, he has identified “copycat syndrome” as a growing problem.
What is copycat syndrome?
It's the process by which institutions, companies or product groups imitate and copy one another to increase their legitimacy. Officially known as mimetic isomorphism, people commonly explain it as “me-too syndrome”. Lots of start-ups do it, and for understandable reasons. Since companies seek growth via new products, they naturally look at what's already available on the market. “If it's good enough for somebody else then there is clearly a market for it” is a quick and easy justification to build something similar using existing products to define the baseline feature-set.
Copycat syndrome is becoming more widespread, especially in Europe, and not only between academic institutions or companies. Intermediaries, technology-transfer agencies and government institutions are all seeking to out-position each other using similar mechanisms or a similar offer. There's a lot of mimicry going on.
Why is copycat syndrome a problem?
It is difficult to win with a me-too product for two reasons. Firstly, differentiation is harder. Secondly, it doesn't focus on the customer. To think that innovation means “more of everything” is as much of a flaw as believing “more of the same” will maintain market share. If you have a lower manufacturing cost or better distribution channels, you might be the big winner. Anyone who has launched a product when several similar offerings already exist will tell you how difficult that is, especially if your goal is to go from fourth or fifth in the market to first or second, either in terms of market share or unit volume. Matching another product is not a sufficient reason for a buyer to select your offering, especially if your rivals have a head start. That's the problem of following competitors with a me-too copy – there is not enough value added.
What are the sort of companies that are falling into the me-too trap?
In most European countries the demographics of the photonics industry is of a small number of large companies, very few medium-sized enterprises, and a long tail of companies with fewer than 20 employees. It's those small-scale companies that are at the greatest risk of falling victim to me-too product development. Because of economies of scale, it is difficult for the smallest companies to offer a price advantage, better service capacity or breadth of offerings.
How do firms break out of the cycle?
The time to break out is when a company is going through a stage of organizational change or when you are at the early stage of product development. These are the times to step back from the competition, look closely at your target customers and the market that you intend to serve. You can then determine what they actually want and identify the capabilities and innovation required to meet those needs – which sounds obvious, of course. But it is risky to go your own way without being well informed.
To help organizations identify areas of innovation and opportunity, we strive to gather customers, innovators and technical solutions at all of our events. Nothing beats conversations with potential customers as a basis for product planning. Furthermore, one can see the current state of the art by searching the SPIE digital library. No-one should be driving into a new market without knowing who has already published in the field or whether they are potential customers of competitors.
How does copycat syndrome affect companies in the laser industry?
I see evidence of innovative laser companies now focusing on the applications that they can target specifically. Once they have identified an opportunity and then established their product in an application, it becomes very difficult for someone else to come along and copy them. Companies like Coherent and Toptica are doing that, starting to look carefully at how they can engineer their capabilities into specific markets in a robust way that gives them some protection in that chosen market. All of which means that smaller companies have a difficult balance to strike. But many small hi-tech companies are founded by entrepreneurs who believe very strongly in their own abilities and throw caution to the wind. They will always find new ways to break the mould. The trap is when they pursue a technology without adequately connecting with the needs of the market.
How are the regulatory authorities addressing copycat syndrome?
I don't think industry bodies or regulators recognize this syndrome as a problem for their industry. They have priorities that tend to involve the formation of new institutes or funding mechanisms. They tend not to consider the symptomatic problems that companies are actually exposed to. But people evaluating business plans should ask questions pertaining to competition, differentiation, evidence of need and plans to connect with the marketplace. Teaching business planning and encouraging innovation are more viable roles for institutions, rather than attempting to fix the problem after it's happened. We encourage industry groups and economic development organizations to work with SPIE Europe to facilitate education, information access and go-to-market activities.
• This article originally appeared in the July/August 2007 issue of Optics & Laser Europe magazine.Optics & Laser Europe magazine – subscribe here