Dear HN,
I'm CEO of a Germany-based eSports startup and we have a problem.
Today we were approached by a Chinese user of our website who told us that a China-based startup has launched a direct clone of our website aimed at the Chinese market.
Our website https://strivewire.com is a host of for-money eSports tournaments in the Hearthstone vertical, but we are working on expanding to other games as well.
The website in question is a very obvious clone of ours and has both .com and .cn domains: - www.haogegebisai.com - www.chosengamer.com
Basically they copied all the design and even our logo down to the actual URLs.
I've added their CEO on WeChat and inquired about this, and he said they are big fans of our startup. But he also mentioned that they already have investors. Their website launched two days ago and already has a bunch of activity.
We've talked about this internally and hope to be able to gain this startup as a Chinese subsidiary, but we are still unsure if this will actually work out.
From a legal standpoint we are very unsure how much you can actually do in such a case. Should we just wait it out? Our should we aim to litigate to put pressure on their investors? I have some experience in international litigation in cybercrime cases, but from a practical perspective it is very likely to bind a lot of resources and focus.
Another huge problem for us is that we are in talks with a very large Chinese IT company (triple-digit $Bn market cap), and if there is a clone growing in their backyard they might pass on us.
It'd be great if people with more experience in these things could give us some advice.
Thanks, Benjamin
TL;DR: Chinese startup is cloning our business, unsure what to do
If your goal is making money and/or securing a partnership you have to put yourself into a position of strength. The best way to do this is to launch an actual Chinese competitor yourself. This should cost no more than 10k USD per month assuming you can leverage your existing code, which makes it much cheaper than going the legal route. Feel free to contact me (contact info in profile) if you need help or introductions to people who can actually make this a reality for you in a week or two. I'm in Beijing and have done three startups in China and can put you in touch with people here who can actually help you.
A live product from you poses an existential threat to your competitors and keeps the big IT company from delaying in perpetuity (the typical modus operandi for big players here is to have middle management rush to agreement on the general principles of possible cooperation and then stalling and never doing anything more substantial -- the delay means they aren't sure if it is worth their while to clone you yet). But the threat of your getting actual traction matters because growth puts a deadline on your willingness to accept other people stalling, and your presence starts imposing actual costs on the startup. Those guys will need to change their branding at a minimum since they can't build an independent brand with you in the market, and once they know you will play hardball you will find them a lot more amenable to compromise if you want to go that route. With that said, if your market reception is good you may not even want to continue talking with them, since most Chinese startups are really inefficient and you can probably blow them out of the market anyway.