The New Copycats: How Facebook Squashes Competition From Startups

Tech startups live by the rule that speed is paramount. Houseparty, creator of a hot video app, has an extra reason for urgency. Facebook, a dominant force in Silicon Valley, is stalking the company, part of the social network’s aggressive mimicking of smaller rivals.

Facebook is being aided by an internal “early bird” warning system that identifies potential threats, apparently. This fall, Facebook plans to launch an app similar to Houseparty, internally called Bonfire, say people familiar with the project. Both apps let groups of people hang out over live video on a smartphone. “They see we’re having traction,” says Sima Sistani, co-founder of Houseparty, which is based in San Francisco. “That’s why we’re pushing so hard.” Silicon Valley is dominated by a few titans, a development that’s fundamentally altering the nature of America’s startup culture. While it’s as easy as ever to start a company, it is getting harder to grow fast enough and big enough to avoid getting either acquired or squashed by one of the behemoths.