I have developed a website. If I go to meet an angel investor, he may ask, "Do you think your website is innovative?" I can answer "Yes." Then he may ask,"Suppose your website is innovative, what if a big company copies your idea and develops the same website as yours after your website goes public?" How can I answer this question?
No, the question is: What are you going to to when a big company copies it.
No, the question is: What are you going to do when also another scrappy startup does it, and gets on TechCrunch?
No, the question is: What are you going to do when there's a genuinely good open-source alternative?
The answer to "How do I answer this question" is: All software companies are in this position. All of them. The failures and the successes.
So just try to make the best thing possible. Work on what you can control.
If a big company does a similar website, and you are not big enough to defend yourself, then you will lose. It's evolution - survival of the fittest.
You need to make sure that you have some advantage that cannot be easily copied. In some markets, that could be patents. Practicably speaking, this is true almost only for medical and chemical patents (since they cannot be made in a "similar but not identical" way without loosing their attributes). In other fields, you need a different advantage.
For websites, the advantage usually comes from a phenomena known as "network effect", in which the value of the network grows exponentially when the network grows in members. Take twitter for example, it is a very simple website, that can easily be copies, but the new website will be worthless unless it has the same number of members. This is where Facebook's value comes from, and even why the internet and telephone network is worth so much (having a cellphone before there was a network was worthless...). Even this website is better then the alternatives because it has more active users then the other competitors.
If you can build your website up to critical mass before the competition outgrows you, you have a chance.
What does your website do? I ask in order to give more relevant advice...
I definitely agree with Jason.
Websites are a not tangible and can easily be copied. All matters is what your Idea is and what are you trying to capitalize on. I could think of following points which a startup should concentrate on
1) If your site Depends on Traffic --Well there are many more categories of startups in internet domain and all have same success mantra be it a big or small company.
RULE is "Be the First one to do that"
2) If you are a SaaS -- RULE is "Be
the best in what you offer"
3) If you are a service enabler --
RULE is "Go as niche as possible, target your customer"
First, there's a difference between "copies your idea and develops the same website" which involves automatic copyright issues, and "copies your idea and develops a similar website" which is the more likely of the two scenarios.
Second, you should assume that someone, whether a large company or another small business, will copy your idea within days (and possibly faster) of your website going live, if the competition doesn't already exist. So the question really boils down to what makes your business competitive, how your site will grow and remain competitive over time. You may want to read one or more of the articles below.
It's not "if" but "when". It's inevitable. If what you are doing is good, a large competitor will come at you with more resources. Plan for this. You can do things like focus in on a very narrow niche market. Or make sure you have the right team and smart money in place. Get early momentum. Have some luck and laser focus. Have some value add or differentiator in your business.
It's also true that large companies are slow. I would worry about the competitor that creates an "open" system that is free that disrupts your model.
Example: First we had the Kindle, then the Nook, now the Blio. Watch that one. Kindle (closed system). Nook (closed system). Blio (open system works on anything).
I'm not paid to market the ones above, just using them as an example of how you should think around the edges of your business.
But just to be clear,...you will have solid competitors coming after you (probably already do and just not aware of each other) and so just plan accordingly.
While it is true that larger companies often "gobble up" smaller competition, unsavvy companies will not be able to get your idea to the place that you already have it, and large companies have to move through their beuracratic machine.