Do Clones Innovate?

I've debated often over the last year the merits of copying others vs. what one might consider original innovation. Could probably spend many more posts on this, but here's a start.

I've had a chance to work in a Samwer brothers (aka Rocket Internet) business in the past, and they are pretty much the quintessential cloners/copycats. Their model is to find successful US Internet co's, then copy the model in Germany (originally), Europe (later), and around the world (now). They've successfully created and sold clones of ebay, Zynga, and Groupon, among others (the 10% stake in Groupon they received effectively making them billionaires). Currently, they're copying many of the hottest models and implementing  them all over the world, including Birchbox, AirBnb, Zappos/Amazon, Fab and Pinterest in regions ranging from Germany to as far as Brazil, HK and Indonesia.

Having met Oliver Samwer a few times (and heard him on conference calls many times), I'll admit that I do think he's extremely, extremely intelligent, and one of the most energetic people I've met, albeit almost comical in his overuse of military language and expletives. Their businesses are, in my eyes, 0% technical innovation. On the other hand, I think they do have some operational innovation in various ways. In each of their businesses, they are able to crank out technical copies of the original business, while looking for ways to build out the operations, sales, marketing and distribution side of the specific businesses in as fast and aggressive a manner as possible. Additionally, I think they have innovated operationally by a model where they take ambitious 24-28 year old ex-McKinsey, Goldman, and MBA-types, pay them very well, promise them tons of responsibility, but give them very little equity and micromanage them constantly, while asking for fast execution as opposed to intelligent thinking or strategy.

Despite the innovations, however, I still simply don't think it's a good model, and would not feel comfortable working for them again. It's one thing to take inspiration from one business and try to improve upon it, which probably most entrepreneurs do, and another to have an explicit goal of copying businesses, down to layout and design. While there's likely nothing illegal about it for many Internet businesses in terms of IP law, particularly when you're talking about copying outside the US, from an ethical perspective I think it's at least questionable.

Oliver pitching at HBS

On the other hand, one could argue, how much does any company really innovate? Wasn't Facebook just copying other social networks? Isn't Google just another search company? Outside of the Internet realm, Walmart first became successful because Sam Walmart ran around to competitors' stores copying the best ideas he saw at each.

For some reason, in my mind I have more of an issue when people copy across geographies (say Chinese clones of US sites, or Rocket Internet clones), but less of an issue when it's across verticals (say all the sites these days that are AirBnb of X ie eventup, RideJoy etc, or Birchbox of X ie KiwiCrate, Trunk Club etc). People just take a great idea, then apply it to an area where it has not yet been implemented (geographically or vertically). Are these two really all that different?