Beware of Copycats in the Ranks
Diana Martin always got compliments on her choice of birthday and holiday gifts and she loved to shop. So when she started her own company, she founded a corporate gift service even though she had an established career in computer science. She has learned that it is easy for someone to duplicate her business and muscle in on her niche. Persevering, working harder and taking the high road are the ways to handle copycats, Martin says. She was interviewed by freelance writer Karen E. Klein.
I am a classic workaholic, so when I decided to start my own company, I kept working full time and built up my business at night and on the weekends. It was torture for a while, making sales calls on my lunch hour, filling up my tiny apartment with gifts and wrapping materials--to the point where I had to get rid of my bed and sleep on the floor!
I funded the company through the income I made at my computer job, so I never went into debt. But I sacrificed and put everything I had into my company. I went through that steep learning curve and came out on top. So it was really heartbreaking to have someone come along and pick off the cream and then walk away.
A copycat once took my company brochure, copied it and stuck their company name and logo on it. Copycats know your pricing, so they’ll undercut you. They will call your customers and promise to do the same thing you do--but better and cheaper.
Copycats tend to be people who have worked for you. Watch out when you have employees whose work suddenly becomes inconsistent and you notice they’re always taking time off, their sales get reduced, their accounts start complaining about lack of focus. The details they’re responsible for get dropped, and they become defensive. These are all warning signs. It may be some personal phase they’re going through, or you, as the employer, may be doing something wrong. But another possibility is that they’re planning to steal your ideas and take away your clients.
When this has happened to me, my clients called and told me someone approached them. My niche is very focused and we are unusual in our industry, so when someone tried to move in, it got back to me immediately.
The first thing I decided was that I would not share any dirty laundry with clients. I was tempted to bad-mouth my competitor, but I just thanked my clients for the information and told them I hoped they would stay with us and promised them our company would continue to exceed their expectations.
Next I talked to my suppliers, some of whom have worked with me for 10 years. No one wants to deal with dirt like this, and it’s not their problem. But I told them I’d appreciate it if they didn’t sell to this copycat and reassured them that we value them and would continue to work with them.
My advice is to be cautious about copycats and never ever underestimate the value of your idea. You may think, “This isn’t so great; no one will copy this,” but they will.
I learned the hard way that I should have had every employee sign a confidentiality-trade secret agreement. I had one but I didn’t bother having everyone sign it. Now no one works for me unless they’ve signed a legally binding agreement.
There’s a terrible feeling of violation when someone leaves and steals your ideas. I try to remember they can duplicate me for a few months, but that just means I have to keep my mouth shut, my head up and run like the devil into new directions where they can’t touch me. If they’re copying your idea, that means they don’t have ideas of their own and they lack creativity. Frankly, they’re not going to get very far, because they don’t have the vision to be a successful entrepreneur.
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If your business can provide a lesson to other entrepreneurs, contact Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016 or send e-mail to Kklein6349@aol.com. Include your name, address and telephone number.
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At a Glance
Company: Prezents Inc.
Owner: Diana Martin
Nature of business: Corporate gift service
Location: P.O. Box 8859, Newport Beach, CA 92658
Founded: 1988
Employees: 10
Annual revenue: $1.5 million
