You may have noticed the trend: a tech venture whose success is not even foolproof in the original country (and generally that country will be the US) is copied verbatim by another country (and generally these countries will be developing countries). Are these ‘entrepreneurs’ residing in the developing country more skilled at assessing risks than are their counterparts in the original country. This is very hardly the case. Actually, that is why they still continue to copy business models that have been already doomed to fail in the original country. I will provide some of relevant examples from Turkey, a market I closely watch (in addition to the US market, which I watch more closely than any other).
Granted, different markets will have different dynamics. Consumers living in a developed country may have a higher purchasing power that would help the very difficult business of e-commerce sustain a little longer. Even though aging demographics is phenomenon almost everywhere, the percentage of people within an aging demographics may be still high in absolute terms. State-level regulations including taxes, technology infrastructure, and a sound and technology-driven financial infrastructure will also affect the future of any venture, not only that of tech ventures. Openness to innovation, not only at the state level but also at the citizen level and capital accumulated supporting the venture in its early years (or sometimes perennially until it records appreciably positive cash flows) are other crucial factors. And in many instances, satisfying one of these factors will not suffice; rather, almost all of them should be met and satisfied at a reasonable level.
Nonetheless, I need to restate my position again as it is the most important aspect of all: check whether the business was/has been financially viable in the original country and if it is so, check why and check whether the country you plan to launch has the same qualities as those satisfied by the originally successful country. In many examples these founders are just copying models that are not even proven to be financially viable in the original country, i.e. no prospect of positive earnings and cash flows despite the growth. Actually, positive accounting earnings are way less important than positive operating and free cash flows but venture capital circles and Wall Street also like positive earnings even as cash flows are negative (because of obvious reasons: accounting earnings can be inflated and manipulated very easily but operating and free cash flows generally do not lie).
A money losing venture that grows in revenues for some time may eventually become a worse money losing venture. Copying entrepreneurs should have the ability to check this first. Only a handful of perennial money losers, typical example being Amazon, evolved and beat the odds.
So, as I promised in the first paragraph, let us look at some copycats from Turkey:
Getir.com, copying Doordash, wound down all its global operations after its failure to compete in big markets in the West. It says it will focus on Turkish market, which I think will further shrink. Doordash had some early troubles but currently does better. It still records negative EBITs and operating cash flows, despite positive, seem suspicious.
Or, Hepsiburada, quoted on NASDAQ, used its quote as a success story for the gullible Turkish citizens. It is an e-commerce business similar to Amazon. However, its scale and technological capabilities are dwarfed by those of Amazon. Its stock price tanked by 78% since its IPO in July 2021. The company sells only in Turkey so its revenues are not diversified. Also, they do not have any other tangential business such as AWS; their revenues are highly cyclical and given the current cost of living crisis and inflationary pressures, they will continue to face headwinds. Their financial statements look positive but suspicious.
Another one is Marti Technologies copying scooter sharing companies like Lime and Bird. You can look into the details but let me share the performance of the stocks of Bird and Marti below (Lime is private):
Marti has negative book value and has been recording negative operating cash flows and net income for many years. So, this positive stock price may not last long.