Why you should huddle up with your competitor

If  you can't beat 'em, join them in the market as Coopetitors. 

Back in 2001, I read a great book on the subject called Coopetition by Adam Brandenburger and Barry Nalebuff.  They demonstrated the benefits of collaborating with your competitors, sharing case studies of airlines locked arm-in-arm facing Boeing (their #1 supplier of equipment) as a unified force. They also suggested that there's potential knowledge sharing that could take place, improving customer value and keeping the industry relevant.  It's all based on Game Theory. 

In my experience, they are right.  When Yahoo worked side by side with MSN and Double Click on creating an ad center (think self-service model), we were making progress on behalf of digital advertising.  When, later, everyone went their separate ways, we left a hole that Google could drive a truck through.  When we partnered to negotiate with ad agencies on limited inventory, our gross margins were much higher. 

As an author or speaker, I've carried this spirit forward.  Sure, I compete with them for speaking gigs, but that's no reason to isolate myself from them.  When a dominant player enters, like Marcus Buckingham, you show respect and say good things about him in the market.  When an up-and-comer enters, you show him/her the ropes, knowing they'll likely take a few gigs away from you over time.  When you lose a gig to somebody, you spend time understanding what-they-did-right instead of fuming that you lost the sale.  Over time, you build up an eco-system of relationships and a stronger brand in the  market. 

In today's economic environment, I'm not seeing this much, though.  Because of the downturn, there's a perception that 'we are fighting over crumbs' - the scarcity mentality.  We develop negative emotions about competitors, relying on media or customer heresay to keep up with them.   When we read/hear success stories about them, we naysay or player hate.  But wait, four years ago, you were acting like buddies at the industry trade association conference! 

1 - Identify competitors that are performing at a high level.  Reach out to them to meet, so as to discuss ways to increase the size of the industry.  Be authentic in conveying your admiration for their innovations, and play big-dog (where you aren't trying to impress them).  

2 - Seek out competitors at trade shows or public places.  Compare notes on market activities and trends.  Be supportive on a personal level, after all, you are in the same business!  If two quarterbacks from opposing teams can become off-season friends (which happens all the time), you can do this too. 

3 - Take on up-and-comers to show them the ropes, especially as it relates to customer-service in your business.  No one wins when a low-performing group enters a market and fails to deliver customer value. 

4 - Create an industry focused event, where all or most of your key competitors attend.  Create an alliance, if possible, that either leverages a common supplier or partner or builds a common resource that provides efficiency or convenience for your customer(s). 

Coopetition is a function of the abundance mentality, practiced by champions and detested by the also-rans.  It's really your choice whether you huddle with or posture against your competitors.  I believe that success is not exclusive, it is highly contagious.  When the players in a market grows, the entire market grows. 

Sure, you can be stupid and give away intellectual property or proprietary knowledge that gives your competitor a leg up.  But you should also know the difference between comparing notes on market trends (like an association does) and giving away the recipe for frying chicken.  Also, if you just hold on to the 'info-held-is-power-withheld' then you'll surely fad away.  We live in a world where there are no sustainable secrets!

One of my first bosses in life told me that good intel is either in the media, your customer or your competitors.  To have the knowledge-edge, you have to monitor and engage with all three.  Are you?

 

 

Comments

[Gabriele Maidecchi]

I share your same view. I think competitors can be a valuable asset, especially in a line of business like mine where services provided by different, partnering companies can contribute in satisfying a client's requirements, with benefit for both of them.