Competing with Allies

An odd thing happened to me last week.  I do not consider my company to have any serious local competition, but there is one recent start-up that does tangentially inhabit my market segment.  I have not reached out formally to this individual about her company, in part because I do not believe she has a viable model worth emulating.   

A friend had recommended that I at least meet and become friends with this person, a suggestion I was unsure about.  What if her intentions are to borrow ideas from my business and apply it to her pre-existing company’s model?  It would not be too much of a stretch to accomplish that, and her company’s struggles might make such a change palatable.

 Before I had come up with a definitive ruling on whether to make friends or not, this competitor wrote to me via email.  The message was a kind one, asking explicitly if I would be interested in meeting up and sharing notes on how our companies could work together.

 Immediately, I began to strategize what an appropriate response should be.  Obviously, this individual shares an interest in the same sector, and to some degree similar services.  So in that sense, I felt nervous.  On the other hand, she has established contacts in this area, and it is possible that the offer to collaborate is genuine.  Given that both organizations have a social dimension, maybe my worries might be misguided.

After reading the Harvard piece on competitor analysis, I had a better framework to think about how I should approach this scenario.  I asked myself if I believed that her company aims to satisfy the same customer needs, and I believe the answer to be no.  While the end goal of reducing student debt is consistent with both organizations, the structure of the competitor’s company and its customer acquisition strategy is so different from mine that I do not believe my strategy can be easily borrowed.

There is a good lesson here about collaborating with competitors.  While it is easy to cast similar organizations away as threats to your business, it is likely that for structural reasons a competitor may be more of an ally than anything else. 

Are their competitors in your market that could be an ally after all?

Source: Competitor Analysis: Understand Your Opponents (Marketer’s Toolkit: The

10 Strategies You Need to Succeed (Harvard Business School Press), 2006)