{"id":3910,"date":"2015-12-08T21:40:49","date_gmt":"2015-12-09T02:40:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/rocket-internet-starting-businesses-in-the-fast-lane\/"},"modified":"2015-12-08T21:40:49","modified_gmt":"2015-12-09T02:40:49","slug":"rocket-internet-starting-businesses-in-the-fast-lane","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/rocket-internet-starting-businesses-in-the-fast-lane\/","title":{"rendered":"Rocket Internet: Starting Businesses in the Fast Lane"},"content":{"rendered":"

\"download\"<\/a><\/p>\n

Business Model: Founded in 2007, Rocket Internet\u2019s goal is to become the number one Internet platform outside of the US and China.\u00a0 Rocket Internet ignores the world\u2019s two biggest markets because their business model is to taken proven ideas from those two markets, such as Uber in the US and start well, funded businesses in other markets, like Easy Taxi in Indonesia.\u00a0 In those markets they aim for number one market share positions and because of the support their companies receive often achieve this postion.\u00a0 As Group Managing Director, Alexander Kudlich says, \u201cwe don\u2019t build companies in a garage, they build them in a factory\u201d.[1]<\/a><\/p>\n

Operating Model<\/p>\n

To facilitate mass creation of business, Rocket internet has created a recipe and platform on which to build a business.\u00a0 This platform consists of four pillars: Infrastructure, Process, Technology, and a Network of Companies.[2]\"download<\/a><\/p>\n

Infrastructure \u2013 operating effectively as a large venture capital firm, businesses Rocket starts are extremely well funded.\u00a0 This allows them to own all of their own infrastructure, allowing for enhanced flexibility and higher margins. For example, Lamoda, a Russian fashion site, owned its entire distribution network.\u00a0 This allowed them to deliver a higher quality of service and led to more frequent repeat purchases from customers[3]<\/a>.\u00a0 For any other startup bootstrapping their way by this would have been impossible but because Lamoda was backed by Rocket it set them ahead.<\/p>\n

Process \u2013 many start-ups struggle to clearly define their business model, they grapple with limited resources, and the uncertainty of expansion.\u00a0 Averaging 10 new companies\/year, Rocket perfected the process for starting a company.\u00a0 They have functional experts who can help with any area of business from SEO to financial planning and can help define important KPIs to measure progress in those areas.\u00a0 This consistency and experience allows them to start a businesses in under 100 days.\u00a0 This means they could identify a promising model in the US and quickly start the same business before the US firm can expand or before a local competitor can gain traction.\u00a0 For example Groupon was started in late 2008 and just over a year later Rocket Internet started CityDeal which quickly became the number one deals site in Europe and was eventually sold to Groupon[4]<\/a>.<\/p>\n

\"Capture\"<\/p>\n

Technology – another competitive advantage for Rocket Internet companies is their ability to leverage existing server infrastructure and app templates.\u00a0 In the consumer online space, a first mover advantage is key to gaining market share.\u00a0 By have pre-existing tools that new companies just need to make small contextual changes to, these new companies save time and that translates to speed of launch and market share.<\/p>\n

Network of Companies \u2013 the final key to the Rocket Internet Model is the large network its companies are a part of.\u00a0 When expanding to a new country, firms can rely on the experience and insight of another company in the portfolio that is already in that country.\u00a0 This saves them the growing pains that would typically come from such an expansion.\u00a0 Firms also pool together to create a larger entity when negotiating purchasing agreements and partnerships.<\/p>\n

Rocket Internet\u2019s tight alignment between their operating model and business model gives them a tremendous competitive advantage.\u00a0 Furthermore, the model feeds upon itself and becomes more sustainable as the firm grows.\u00a0 Each time Rocket Internet launches a new business, they get better economies of scale, increase their network of experts, and get better utilization out of share fixed assets.\u00a0 It will be exciting to see their expansion and further success in the years to come.<\/p>\n

 <\/p>\n

[1]<\/a> https:\/\/www.rocket-internet.com\/about<\/a><\/p>\n

[2]<\/a> https:\/\/www.rocket-internet.com\/about<\/a><\/p>\n

[3]<\/a> http:\/\/blogs.wsj.com\/tech-europe\/2013\/06\/10\/russias-lamoda-lands-130-million-funding-round\/<\/a><\/p>\n

[4]<\/a> http:\/\/www.businessweek.com\/printer\/articles\/10778-how-three-germans-are-cloning-the-web<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Rocket Internet takes proven business models and launches them in new markets with a proven process for success<\/p>\n","protected":false},"author":1076,"featured_media":3911,"comment_status":"open","ping_status":"closed","template":"","categories":[111,705,707,578,706,7],"class_list":["post-3910","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-internet","category-rocket","category-rocket-internet","category-tom-winner","category-venture-capital","category-winner"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nRocket Internet: Starting Businesses in the Fast Lane - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/rocket-internet-starting-businesses-in-the-fast-lane\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rocket Internet: Starting Businesses in the Fast Lane - 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