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Samwer Brothers' Cloning Rocket Goes to Warp Speed

Germany's Rocket Internet is notorious for cloning hot American tech companies before they get a chance to expand overseas. The incubator, run by the Samwer brothers, has wound the model so tight that it just took a business idea from inception to a 15-person company with a product on the market in eight weeks.

The startup is called SpaceWays, and it's launching today in London. The service provides physical storage space for a monthly fee of 6 pounds ($10) with a tech-friendly spin. Customers get a heavy-duty box to store their personal belongings in, and can use their smartphones to schedule pickups with just a few taps.

The idea sounds a lot like MakeSpace, a New York startup founded in September that has raised more than $10 million from venture capitalists. The company is growing revenue from thousands of customers by at least 10 percent a week, Sam Rosen, MakeSpace's founder and chief executive officer, said in an interview. MakeSpace charges $25 a month for access to four bins that can each store as much as 100 pounds, and categorizes your stuff so you can quickly see what's in storage and order specific items to be returned. Customers often store sports equipment, winter clothing, oversize luggage, strollers and mementos, Rosen said.

"In the suburbs, you've got a backyard shed or a garage," he said. "In the city, you don't have that."

Rob Rebholz, who helped start SpaceWays within the Samwers' incubator, acknowledges that MakeSpace was "certainly" an inspiration. Even the fee structure is similar. MakeSpace charges a flat rate for additional bins, $29 for each delivery and mandates a three-month minimum to start. SpaceWays also charges for more boxes, 19 pounds ($33) for delivery and requires a three-month contract.

"There are a bunch of companies right now doing this stuff, so I would say it's — I’m not sure it’s the right word, but — more of a movement," said Rebholz, a U.K. transplant from Munich. "This is not just a business model for London. It’s a very global opportunity."

I wrote in Bloomberg Businessweek recently about changes afoot at Rocket Internet. As the company gears up for a planned initial public offering this year, it's been globalizing its successful model of copying U.S. e-commerce companies by adapting them for emerging markets. Meanwhile, the Samwers have matured their European cloning operation by going after more complex Silicon Valley businesses, such as Square and Stripe.

Physical storage and delivery is not like translating Groupon to German with local deals. SpaceWays had to lease storage space near tony London, find professional drivers and build the technical infrastructure to tie it all together. The founders — MBAs with consulting backgrounds, in standard Rocket fashion — have leaned heavily on the Samwers for help and office space. The startup is adding two to three staffers per week, Rebholz said.

"If an e-commerce order gets lost, you just send it again," he said. "We can’t run the risk of ever losing anything."

MakeSpace's CEO often describes his company as a Dropbox for physical stuff. It's an apt analogy because Dropbox is getting squeezed from all angles by Google, Apple and Microsoft as they drive the prices of file storage down. MakeSpace has to worry about — in addition to SpaceWays — a startup called CityStash, which is doing something similar in San Francisco. Rosen said MakeSpace gets stronger as it adds more customers because the cost per box goes down as it fills its warehouses. He said he's only focused on the U.S. for now.

Matt Mazzeo, the managing director at Lowercase Capital who led the venture firm's investment in MakeSpace, said the startup's brand will help it squash copycats. "There are a few competitors out there who are trying to mimic the approach," he said in an interview.

Speed is on Rocket Internet's side. The eight-week sprint that led to the debut of SpaceWays today is the fastest a Rocket-incubated company has ever gone from idea to launch, Rebholz said.

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