# A non-zero probability of copycats

By [Brandon Donnelly](https://brandondonnelly.com) · 2019-12-21

fedex, fred-wilson, hard-assets, microsoft, real-estate, scott-galloway, slack, software, software-companies, startup-tech, tech

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Software businesses are generally high margin businesses. But along with this feature comes some risks. Here's an excerpt from [a recent post by Scott Galloway](https://www.profgalloway.com/fckdex) (which is actually about FedEx):

> _With any software start-up, there is a non-zero probability that you wake up the next day and find that a better-resourced firm (Microsoft, Oracle, Salesforce, Adobe) has deployed 200 engineers to copy your product, bundle it with their stack for free, or near free, and … welcome to zero. I believe this is happening to Slack, but more slowly than Netscape, as Microsoft’s General Counsel has likely coached Satya to charge a nominal fee for Teams and let Slack bleed out, instead of putting a bullet in its head and stirring the DOJ from a 3-Ambien slumber._

Real estate, by comparison, doesn't get disrupted in quite the same way. A location/city can lose its economic purpose ([Great Grimsby](https://brandondonnelly.com/2019/11/22/the-worlds-biggest-fishing-port/) is just one example), but as long as there are growth tailwinds the real estate should do well.

Venture capitalist [Fred Wilson](https://twitter.com/fredwilson) has on many occasions written about how he (and his firm) made a fortune in the dot-com era, only to lose it all and have to remake it again over the subsequent decades.

One the lessons learned from that experience (according to [his blog](https://avc.com/)), was to take some of that second tech fortune and invest it into hard assets -- namely real estate. That feels right to me.

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*Originally published on [Brandon Donnelly](https://brandondonnelly.com/a-non-zero-probability-of-copycats)*