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Be a Copycat. Not An Innovator.

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The Dhandho Investor


 I really like this book.  It provides technical analysis of how to value a company.  The framework this book provide a simple but powerful true about life in general.  You hear so many industry thought leaders and companies talked about Innovation.  Do you ever feel like we are talking about innovation for the sake of innovation?  I do.  It refreshing to hear someone stay the opposite.  It's refreshing when you read the idea and it makes sense.  This my friend is what the Dhandho Investor is filled with.  Today will we focus on the copycat.

A must read book. Click to get more information.

About The Author Monish


 Monish Pabrai is a self proclaimed Warren Buffet cloner.  Monish and Warren are great at calculating the intrinsic value of a business.  They figure out the right time to buy a business when the business is under valued.  How do they do this?  I will not tell you this in the article, but I high encourage you read the book.  I even tell you the specific chapter to read to eliminate you having to find it.  I will share the location in the book to read in a few paragraphs.

Innovation Is Hard


Yes it's hard, but don't be fooled. You can innovate but that doesn't necessarily mean success for you.  We all have smartphones.  Chances are that you are reading the article on a smart phone.  That's just the world we live in.  I would also guess you have a iPhone or an Android device.  Let me ask you this, who created the smartphone?  It was called Simon and created by IBM in 1992.  Yes, the smart phone was innovative, but IBM doesn't dominate this market today.  Instead IBM is a cloner.  The have innovated in the past, but the core business is not innovation.

Look At Success And Duplicate That

Apple, IBM, and Microsoft does it and you should too.  You can look at IBM's Watson project.  It was amazing.  Watson beat the best Jeopardy champions.  Winning at Jeopardy is no small feat, but to best the champions of the game, that's truly amazing.  At the core of the Watson project was artificial intelligence and natural language processing (aka speech recognization).  Some people will say IBM innovated.  Let me ask you this.  What did IBM really do to innovate with Watson?  They didn't create artificial intelligence or natural language processing, but they did put these pieces together to create something new.  Watson posses the ability to beat humans at Jeopardy consistently.


Image via Authenticmedicine


To some this is amazing, but how does a machine that wins at Jeopardy benefit IBM's customers and the world.  It really doesn't.  However, the level of intelligence created in the Watson project can be leveraged to solve problems in other spaces by cloning.  After Watson as a brand receive notoriety, Watson start to move into other areas.  One example is, "IBM has bought up medical image databases and is using deep learning to try to help doctors spot diseases more rapidly."  The MIT technology review did a great article that's talks a little more about Watson titled IBM’s Watson Is Everywhere—But What Is it? IBM started cloning their innovation in existing markets.  IBM does this.  Apple and Microsoft have great examples as well.  We will have to discuss these in another article.

Read Chapter Five


 There you go.  As promised earlier I disclosed the chapter to read.  I encourage you to read the whole book.  If you're pressed for time, I would suggest chapter five.  Towards the end of this chapter are two crucial pieces of knowledge: the Dhandho Framework and Copycat advice.  We talked about the act of being a copycat already.  Here's a few parts of the framework that really resonated with me.
  • Invest in existing businesses
  • Invest in simple businesses
  • Invest in businesses with durable moats


 If you want to know the others six points in the framework, you have to read the book.  Thanks for reading this piece.  If you would like more information on being a copycat or other topics in the book, please add a request in the comment section below.
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