Hey, happy Monday!
Get over it: if they are not working with you, they are working with one of your competitors. Who? People: your next customers.
The market only exists when people decide to move their money from a solution that does not satisfy them to one that promises to be more effective, faster, cheaper.
If I invited you to dinner, we would agree to choose a restaurant (I look forward to being able to return to do so with serenity) at the intersection of our tastes, and, among the various options available, we would eventually pay the bill at only one of those proposed. By the time we decided, all the restaurants were competing with each other. It works like this.
If restaurant owners learned about the list of options we evaluated they certainly would not phone their colleague who won our dinner to congratulate and exchange recipes. They would do everything not to cross paths while, much more importantly, they would have to do everything not to happen again on the same list of other people with similar tastes to ours (this is Strategy).
What could make that restaurant the only place on the list for two like us?
Of course, the restaurant metaphor is deliberately exaggerated, but I assure you that it happens all the time. It happens, for example, that if you lose a competition (and I have lost a lot of them) the first thing you want to know is the names of the other participants to put them on the “competitors to avoid” list.
Today I have to admit that this does not happen to me anymore for two reasons: 1) I no longer participate in competitions because I think it is disadvantageous especially for clients to order medicine before diagnosis and 2) I have changed my approach and one of the reasons I decided to create STRTGY is to allow those who thought it would be useful, to do the same.
Are we competitors, do we collaborate?
There is a phenomenon that has caught my attention lately. It is not new but I have seen it occurring more and more frequently: it is called Co-opetition.
In Italian it would sound like Co-opetition, as an antithesis to Competition, which literally means to collaborating with competitors to win both. Does this sound like nonsense? It isn’t.
Adam Brandenburger, who first codified this particular strategic behavior in a book called precisely Co-Opetition, explains that
the simplest reason why two competitors can cooperate is to save costs and unnecessary effort.
When does Co-opetition make sense?
I have identified 3 ideal cases, among many possible ones, that are extremely interesting and practical.
➀ When the resources to make an impact on changing habits on your non-consumers would be too high. (Goals: Market penetration, Market Development, Product Development, Diversification)
This strategy is widely used in IT where it is useful to cooperate and integrate one’s products with those of competitors to access their respective customer bases.
Facilitating Co-opetition, should also be the case, in my humble opinion, for trade or producer associations, which should offer joint planning to stimulate demand for their members’ products. In some cases they do this even though trade fairs are a somewhat too basic example of Co-opetition, in fact perhaps exactly the opposite.
Think about how your money is being used for membership in ConfQualcosa and Consortium of XYZ. 🙈🙊🙉
Who can you ally with to reach non-customers with the goal of getting them to change their buying behavior?
➁ When in order to remain number two you have to cooperate with number one.
It is the story of Samsung being Apple’s first supplier for the OLED screens used in the iPhone X. If it had failed to strike a supply deal Apple would have asked LG, which today supplies the screens of the Google Pixel, or BOE (which I did not know), which today supplies Huawei, thus risking losing a substantial share of its revenue.
What is the number one competitor that you can sell your products/services to in order to help them maintain the lead and prevent someone else from doing so?
➂ When you want to focus and grow.
If you have decided to reduce and simplify your offerings to become the benchmark in a particular field but feel like you are leaving money on the table from projects that are no longer “core” and that you know full well would distract you.
It is important to create virtuous relationships with competitors to control the “value chain” that the customer goes through.
In this scenario all three of you win: you, your competitor, the people.
Coopetition allows all competitors to join forces with one mission: to make customers happy, because if they don’t, someone else will.
It is not a Zero Sum game, unless you designed it that way.
Many entrepreneurs and leaders think that business is a zero-sum game, that is, when someone wins everyone else loses and the needle in the system never moves.
In some cases there are activities designed to be in Zero Sum, such as the number of Notaries and Pharmacies in the area or the licenses of Taxis and Gondolas…
But I think if you read this newsletter, the probability that you fall into one of these categories is really low….
Instead, it is more likely that if you suffer from this bias, it is because you also think that your offering, compared to that of your competitor, is not any better, in fact it is undifferentiated.
You are communicating to everyone that your business is a me too o Me better. It is designed without any differentiation or with the sole value proposition of being subjectively better than others.
This is why competition is a design error.
There are teams from companies like PIXII, I told you about them in this note, who use (really) the Blue Ocean Strategy Framework to create a product that is incomparable with its category. Me only.
Or there are teams working to create business Me+You. And this is where the game gets interesting, because by using the JTBD, which is neither a workshop nor an exercise as I unfortunately still read around, but a way of reading reality, they are able to map the real purchase motivations by building a model of the customer’s evolution very accurately and to correctly represent the competition which, mind you, may not come directly from the industry itself.
Yes I know, it may sound complicated, but it is not. In Design STRTGY for Business Innovation Program we dedicate 2 full sessions to JTBD to deal practically, and mathematically, with this powerful framework. It is the most challenging module, but according to the voice of those who participated, the one with the greatest impact in their business.
👋🏻
Good work!
Make yourself heard.
-Antonio
