In my last post, I described why copying another business wasn’t going to be a quick path to success for my young client. This advice would be true no matter what business he chose to copy. But in his case, who he chose made this course of action even more treacherous.
First, let me describe the business a bit, but just a bit because I want to protect the identities of the innocent.
This business, let me call them The Group, sells a membership program that provides ongoing advice to help you be successful in Activity A.
They have two websites: one that gives away advice on how to be successful in Activity A, while inviting people to a free webinar to learn more. That free webinar then invites them to sign up for a free membership on their second website. The free membership converts to a paid membership after 30 days.
The price of the monthly membership is $197.
Their two websites generate different amounts of traffic and both rank really well. The site that gives away content… in other words, the marketing site…. ranks at 200,000 on Alexa. The other site — the paid site — ranks at 15,000 on Alexa. Those rankings are based on world-wide traffic, not just traffic in the US.
As a privately held company, I can’t know what their yearly income is.
But I can take an educated guess based on their traffic — but only because their paid members visit a different site than their “prospects”… if this were not true, I could not even guess how many of those prospects convert to paying clients. But with their setup, I don’t have to (thanks, guys).
Alexa doesn’t publish the chart they use to determine ranking, but I do know that it is an algorithmic scale. In other words, it takes much more traffic to go from 100,000 to 10,000 than it does to go from 1 million to 100,000. Based on my own traffic numbers and corresponding Alexa rank, I think I can make a wild guess at their traffic — 20,000 unique visitors a month. This is a wild guess and is likely low (I also know they had 10,000 people sign up the week they launched, so this number may, indeed, be wildly low, but will do just fine for our demonstration).
Now, let’s do some math.
Our guess at monthly traffic is 20,000, but let’s allow some of that traffic to be from free members and others who just happen to land on the site.
20,000 x 20% non-paying members = 16,000 paying members a month.
16,000 x $197 = $3,152,000 A MONTH in income.
Remember, this is a complete guess, but you can see that even if my number is over by a factor of 10, these guys have a shit ton of money.
So far, I haven’t described anything unusual (well, except the fact that they have their business spread over two websites… and are actually making money), but remember, this young man was told it was okay to copy up to 80% of another business. And he was… right down to the layout of the videos used to describe the membership program. That 20% that was unique? It was hidden inside his membership program.
If he had been successful in this course of action, he would have eventually come to the attention of this company. And when I first mentioned this to this young man, he said, “I have sought legal counsel to double check that what I am doing is completely legitimate and that I am in no way infringing upon their copyrights or that I am directly stealing their ideas.”
I was impressed that he had thought to consult a lawyer, however asking a lawyer first is no guarantee that you are protected.
Here are some points to keep in mind when you seek legal counsel:
1. Lawyers only answer the questions that you ask. Lawyers do not, in general, offer unsolicited advice, but only answer the questions you ask. Unless this young man actually showed the lawyer everything he was doing and gave him the company he was copying it from, the lawyer likely didn’t have enough information to make an informed decision.
2. Lawyers do not offer insurance protection. If the company in question eventually sues you for following the advice given by your lawyer, your lawyer will happily defend you (while making a handsome amount of money), but will not shield you from that lawsuit.
3. The lawyers for the other company are the ones who matter. The issue of copyright infringement is in the eye of the beholder and companies sue each other all the time for alleged copyright infringement (and most cases never get to court) Just last week, Microsoft dropped “Metro” from the name of Windows 8 in response to a cease and desist letter it received from a German retailer named Metro AG. The term “Metro” isn’t even that unique (in fact, here in Seattle, our transit system is called “Metro”) and the company who is complaining isn’t even in the same industry, yet Microsoft chose to not fight this fight.
This company that my young client was considering copying isn’t one to take lightly. They have resources — remember that $3 million a month income — that they could use to bury this young man in legal paperwork. They wouldn’t even need to have an actionable court case to push him out of business.
I was so dismayed at the advice this young man had been given. Not only should his coach know that the basic advice he is handing out isn’t going to make his clients successful, he should have seen what I did. The young man has been working with his coach for 3 months and has shared with him all of the steps that he has taken to this point. It only took me asking one question to see that he needed to change course to prevent disaster.
My advice to you is to be wary of people who give you advice without wanting to know more about you, your business, and the audience you serve. You can learn from others and incorporate their successful strategies into what you are doing, but you always need to meld these ideas into your business and make them your own.