Thoughts on startups by investors that
fund them & entrepreneurs that run them

Is a difficult platform to replicate?

The answer is noyes, and it’s irrelevant. 🙂

Back in the days of the dinosaurs, my first software company was in the wireless communications space (when that meant “pagers”, not “smartphones”), and our product let you type a message on your computer and send it to a pager, using a very simple protocol known as “TAP”. We were—by far—the market leader in the industry (providing the software for Motorola, Nextel, Apple, Sprint, etc.) despite having lots of competitors. When people would ask a similar question back then about the difficulty of software development, my usual response was “anyone can write a TAP program over a weekend that will work with 80% of the paging systems in the world…but getting it to work on the other 20% will take you a year.”

With that in mind…

No: It’s a similar situation in the entrepreneurial funding space. There are literally hundreds of platforms currently operating that connect investors and startups, and there have been at least a hundred others that have come and gone. Setting up a clean, effective web site that lists companies seeking funding and provides accounts for investors to interact with them is not rocket science. A quick look at the really nice sites developed in just a few months by companies like CircleUp, FundersClub, Bolstr, Seedrs, et al will show you that the base technical challenge of creating a marketplace/social network is not particularly difficult. Indeed, there are already several companies offering white-label solutions for crowdfunding portals that have done a really nice job of normalizing the functionality, and giving one the ability to field a new funding platform almost immediately (See: Are there any white label crowd funding platforms?)  Even a more extensive platform with a much richer feature set and social network integration, like Angel List or KickStarter, is doable in a reasonable time frame.

However, there is actually much more to Gust than is apparent on the surface, or even from the viewpoint of a current user (either entrepreneur or investor). As I’ve discussed elsewhere, Gust’s long-term goal is to serve as the infrastructure platform for the entire global, early stage finance industry. This is a completely insane and complex vision (but what the heck, we’re entrepreneurs!)  As such, it requires that from the outset the platform be cognizant of, and able to deal effectively with, a host of different entities, combinations of entities, relationships, combinations of relationships, languages, currencies, regulatory requirements and combinations thereof, and tons of other stuff. So therefore…

Yes: Replicating Gust would be non-trivial, even if we could do a brain dump of all the learnings that we have internalized about the industry and our users over the past eight years, including the lessons that we’ve taken away from each of our three previous re-writes of the entire platform. As such, creating a functional clone of Gust (including all the features under the hood, and ones that have not yet been released), using world-class engineers and state-of-the-art, 2012 project management in Ruby on Rails, would take roughly 20 person-years from soup to nuts (figure about 1/3 of that in product/UX/UI and 2/3 in actual coding.) I’m pretty comfortable with that estimate, because that’s what it is taking us for the fourth iteration of the platform, currently in development!  There’s a good reason that our peers in the US software industry this year named Gust the “Best Collaboration/Social Networking Solution” (beating out Google Apps for Business, Adobe Connect and, and why SWIFT, the worldwide consortium of the banking industry, last week voted Gust the “World’s Most Innovative Financial Technology Company“. Those types of accolades don’t come easily, and don’t go to simple-to-replicate solutions.

However, while 20 person-years is not-insignificant for a startup, it’s clearly just a few months of work for a major player in the space with a large coding team at its disposal (even taking into account the theory of The Mytical Man-Month.) So if LinkedIn or Google or some other behemoth wanted to clone us, I’m sure they could without a lot of difficulty. But that’s where it gets interesting, because whether or not you could replicate Gust’s platform…

It’s irrelevant: despite the award-winning platform and the technology under the hood, Gust’s primary advantage is NOT in our engineering, surprising though that may seem. Instead, it is our eight years of indefatigable relationship and customer building with large segments of the world’s early stage finance industry. As we end 2012, Gust is the official, exclusive platform of virtually every national federation of business angels in the world including the United States, Canada, Australia, New Zealand, Ireland, Scotland, France, Portugal, Spain, Russia, Belarus, Kazakhstan, India, even China, all in their native languages. Gust is used as the exclusive internal platform by 85% of the world’s organized angel investors, by over 1,000 venture capital funds and angel networks, 200 accelerators and business plan competitions, and a host of national and transnational organizations, from the StartupAmerica Partnership and the US State Department’s Global Entrepreneurship Program, to EBAN, the EU’s multi-national angel federation, and WBAA, the World Business Angel Association. This has resulted in a platform with over 150,000 companies actively using Gust for investor relations, over 40,000Accredited Investors using Gust to manage their deal flow and portfolios…and over a billion dollars of seed and early stage investments tracked through the platform since we started. And it is this network of participants and relationships (seeMetcalfe’s law) that would be difficult to replicate under any circumstances, and would be impossible to replicate under real-world circumstances, given Gust’s long-term contractual relationships.

*original post can be found on Quora @ *

Written by David S. Rose

user David S. Rose Founder and CEO,

David has been described as "the Father of Angel Investing in New York" by Crain's New York Business, & a "world conquering entrepreneur" by BusinessWeek. He is a serial entrepreneur & Inc 500 CEO who chairs New York Angels, one of the most active angel investment groups. David is also CEO of Gust.

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